Stable supply and demand, MDI and titanium dioxide running at high level

Industry View

Aggregated MDI: Domestic aggregated MDI increased slightly this week. This week, Wanhua Aggregate MDI offers around RMB 17,800-18,000/ton, and offers from Covestro and BASF around RMB 17,400-17,600/ton. On the supply side, the second phase of Wanhua Ningbo's installations are undergoing overhaul, and BASF has announced an increase in the price of MDI, and the annual task of Kumho in South Korea has been completed. Imports have no impact on the domestic market for the time being. The supplier is actively supporting the market and the market offers Push up slightly. On the demand side, outdoor construction in the north is gradually suspended, and overall demand is limited. Pure MDI: Pure MDI declined weakly this week. This week’s East China pure MDI market spot offer refers to RMB 22,500-23,000/ton. From the supply side, Wanhua Ningbo's Phase II installation has been overhauled, and the overall supply has been reduced. From the demand side, some downstream customers are not operating at a high rate. Weak support, we expect the pure MDI market to remain weak and volatile next week.

View of the titanium dioxide industry: The demand is stable, and the price of titanium dioxide is expected to continue to run at a high level. This week, the price of titanium dioxide was stable. At present, the mainstream price of sulfuric acid rutile titanium dioxide market is 1,6000-17,000 CNY/ton, the mainstream price of anatase titanium dioxide market is 13,500-14500 CNY/ton, and the mainstream price of chloride titanium dioxide market. It is 18000-19800 CNY/ton. On the demand side, rutile titanium dioxide relies on foreign trade export orders to maintain a short-term stable pattern, while anatase titanium dioxide mainly relies on domestic demand. It is currently in the low season of domestic titanium dioxide consumption, and enterprises moderately control the operating rate; raw material side, sulfuric acid anatase Type titanium dioxide companies are mainly facing cost pressures. Even if they choose other channels to obtain raw materials without climbing, the prices of other mines are also rising. In order to reduce costs, companies have to relax the index requirements for raw materials, making production more difficult.

At present, the domestic market of titanium dioxide is stable, and overseas demand is stable. It is expected that the price of titanium dioxide will continue to run at a high level.

PA66: The short-term price of PA66 is expected to be stable. This week, Shenma Industrial Co., Ltd. saw 190,000 tons of PA66 slices, and the device was in normal production. The EPR27 price was sent at 29,700 CNY/ton, and the FYR27 price was 31,000 CNY/ton. In terms of price, it was stable from last week; on the raw material side, adipic acid fell slightly from the high level; on the demand side, the downstream market demand was limited and overall weak, and the terminal automobile industry rebounded slightly. At present, the supply of adiponitrile continues to be tight, and the downstream will follow up on demand. It is expected that the PA66 market will be consolidated within a narrow range next week.

Views of the glyphosate industry: multiple factors promote the upward fluctuation of glyphosate prices. This week, the 95% raw powder supplier of glyphosate offered 2.8-28,500 CNY/ton, and the actual transaction was referenced to 26,5-2.7 million CNY/ton. From the perspective of the market cycle, the price of glyphosate began to drop in the second half of 2018. After the market inventory was digested in 2019, after the low level consolidation in the first half of 2020, it will enter the next round of upward adjustment channels; from the feedback from manufacturers, Manufacturers have little sales pressure; from the perspective of the competing product market, the price of glufosinate remains high and consolidates. For the domestic market, the increase in the cost performance of glyphosate stimulates sales in the domestic market. We expect glyphosate prices to continue to fluctuate upward.

Investment Advice

The current market style is shifting to cycles, and the price increase of some varieties may exceed expectations. It is recommended to focus on three main lines. First, it is recommended to continue to pay attention to the leading white horses, especially those with marginal changes in the near future. It is recommended to focus on Hualu Hengsheng and Yangnong Chemical; second, the high-growth targets with reasonable valuations, it is recommended to focus on Longpan Technology and Xinyaqiang; Third, it is recommended to pay attention to the Shenma shares that are subject to price increases.

risk warning

The epidemic has affected the decline in domestic and foreign demand, crude oil prices have fluctuated sharply, and changes in trade policies have affected the industrial layout.