Turning Point of Supply and Demand in Oil Chemical Industry

Southwest Securities believes that the price of palm oil has rebounded sharply and the bottom inflection point is now. According to data from the Indonesian Palm Oil Association (GAPKI), Indonesia exported 2.17 million tons of palm oil and palm kernels oil in June 2019, a decrease of 5.2% compared with the same period last year. Its export volume will decrease by 8% throughout the year, and the growth rate of global palm oil supply will slow down to 2.5 million tons. In the short run, China's palm oil depends entirely on imports, and Typhoon Lichma affects palm oil imports, and the short-term price is expected to continue to rise. In the long run, this year is the global palm oil depot cycle. With the release of soybean oil substitution effect and the rapid growth of biodiesel demand, it is expected that palm oil will be supplied next year. Given the gap, the price inflection point of palm oil is now. It is suggested that Zanyu Science and Technology (002637) should be paid more attention. The company is the leading company in oil chemical industry and anionic surfactant industry. It has a capacity of 550,000 tons/year for oil chemical industry and 700,000 tons/year for surfactant industry. It is expected to benefit fully from the rising price of products.