Phosphorus Industry Chain Leads to Epichlorohydrin Breaking through Records

The latest boom index - 17.05, last week's boom index 7.39. Chemical prosperity index turned negative in off-season. On Tuesday, the basic chemical index of the secondary market (CITIC) fell 0.58% and the Shanghai Stock Exchange fell 0.22%.

Oil prices fell sharply this week, closing price of oil distribution on Thursday was $61.79 per barrel, rising by $4.79 per barrel, the number of oil rigs in the week of July 12 in the United States dropped by 5, the previous value by 4, I EA's fall in crude oil demand in 2019 triggered a sharp drop in oil prices, and we maintain the price hub of 2019 in the range of $60-70 per ton.

Continue to recommend phosphorus chemical and tyre plates this week: due to focus interviews, about half of yellow phosphorus production capacity has been shut down, and we expect to last for at least one month with a price shock. It rose 73 percent, mainly in Yuntu Holdings and Xingfa Group. The exquisite tires and racing wheel tires in tires generally benefited from exchange earnings, tax rebates and good overseas sales, which led to performance exceeding expectations.

In terms of prosperity, vitamins (recent Basf shutdown continued to delay), fluorite (continued tight supply due to southern rainstorm), epichlorohydrin (Haili shutdown) were all in place. In the upstream stage, Xincheng, Zhejiang Medicine, Jinshi Resources and Binhua Shares are recommended. 

In terms of blue chips, the price and price difference of the main products of Wanhua Chemistry, Hualuhengsheng Chemicals and Luxi Chemicals are at a historically low level, with low downward elasticity and low valuation. Private refineries are at the peak of production, and the new generation of equipment is superior to the previous generation in both process and cost control. It has a strong cost advantage. Hengli, Tongkun, Rongsheng, Hengyi and Dongfang Shenghong are recommended as the leading companies. The pesticide sector tends to increase its concentration and focus on recommending superior products for a long time. Quality leader: Yangnong Chemical, Lier Chemical, Limin Stock and Zhongqi Stock (Jiangsu environmental impact is only temporary, expected to resume in the third quarter).
Many high-quality sub-new and growth stocks have even erased their annual growth, and the timing of allocation is once again: Wanrun stock, Puyang Huicheng growth, especially, is the best allocation. At present, Real Madrid Science and Technology, which is the leader of special surfactant, Wind Power Composite Material and National Ceramic Material which is the standard of the whole ceramic industry chain, are concerned about Watt Gas and Andiji Technology.

Liquid chlorine: the price of liquid chlorine this week is 775 CNY/ton, with a weekly increase of 47.62%. This week's rise in liquid chlorine is mainly due to the maintenance of chlor-alkali enterprises, a significant reduction in downstream demand has not substantially increased. Next week, there will be no overhaul of chlor-alkali enterprises in southern China.

Hydrochloric Acid: the price of hydrochloric acid this week is 200 CNY/ton, with a weekly increase of 33.33%. At present, there are significant regional differences in hydrochloric acid market. The delivery of hydrochloric acid in Anhui, Zhejiang and other places has improved under the support of high liquid chlorine prices.

Phosphoric Acid: the price of phosphoric acid this week is 5250 CNY/ton, with a weekly increase of 17.98%. Influenced by the sudden tightening of raw material yellow phosphorus supply this week, most domestic thermal phosphoric acid enterprises stopped quoting. Some enterprises even chose to shut down for maintenance because of lack of raw material stock. According to Zhuochuang statistics, the domestic start-up rate of thermal phosphoric acid this week was 27.58%, down 1.16 percentage points from last week.