1, the Russian potash giant exit BPC, potash prices face downside risks
July 31 Russian potash giant Uralkali company announced its withdrawal from the Global Alliance, one of two major export BPC, thus triggering including Potash Potash, including the company's share price fell sharply. From a global perspective, potash is overcapacity situation, but due to industry capacity mainly in Canada, Russia and other enterprises in the hands of a few, is a typical oligopolistic industry, leading enterprises through two BPC and Canpotex Potash control of the international trade union potash prices, resulting in overcapacity backdrop gained excess returns. BPC monopoly of more than 30% of global potash market, and the company Uralkali potash production accounted for about 20% of the world, is the world's second-largest potash producer. We believe that Uralkali's withdrawal may cause outlook BPC potash prices, because Uralkali's potash lower cost, after he quit BPC will be independent for export, while China's potash fertilizer import dependency is still high, the international potash prices will inevitably fall impact on the domestic market, so we think the market outlook domestic potash prices will likely fall down QSLI (000792) rating to "underweight", no longer concerned about the short term.
2, glyphosate resume rising, the risk is increasing
Biweekly period of five products price gainers were hydrochloric acid, methanol, aniline, glyphosate and methyl ethyl ketone; biweekly price decline in the top five products are chlorine, NYMEX natural gas, sulfur, urea and nitric acid. After a period of high consolidation after glyphosate prices continue to rise, mainly due to the market for environmental verification may lead to reduced production capacity is expected to persist, another reason is intentional production house started by lowering the operating rate way to maintain market high prices, we believe that glyphosate itself threshold is not high, if the high profitability has always existed, it is bound to attract new entrants, we believe that the current industry has a certain degree of risk, the relevant company's share price also rose a larger remind investors of risk . Current MEK prices began to rise, we believe that in the context of high oil prices, the cost of supporting MEK has a better future for alternative solvents triphenyl advantage will continue to appear, it is recommended to continue to focus Qi Xiang Tenda (002,408).
Losers, the urea, polymeric MDI products such as a certain degree of decline, is currently in the off-season demand for agricultural products, urea lack of good upward momentum, so the product prices are market expected; polymeric MDI, the Early discontinuation of Shanghai Lianheng device starts recovery started, although the load is not high, but in the current situation downstream demand is still on the market of a certain impact, we expect the outlook MDI prices will be dominated by consolidation.
3, the increased focus on spandex market, but the company temporarily attractive valuations
July 30 spandex industry conference held in Shaoxing, the Conference decided in view of the current inventory reflected inside tight, some of the specifications of the situation even more tense, and combined with the downstream textile industry due to end demand constrained by the off-season, is currently running low, etc. factors into account, on the 30D, 40D spandex specification selling prices 1000-2000 yuan / ton. We track the current price Huafeng Spandex 40D No change is expected in the industry after the meeting, the price will rise, or around 4%. We believe that the logic of spandex prices mainly from two aspects, one experienced a few years after the downturn in recent years, little spandex production capacity expansion, while the recent upturn in downstream demand, the product gradually converted to a seller's market, prices have rose; Second Raw materials PTMEG capacity put too fast, resulting in product prices, lower production costs spandex. We think spandex business cycle will continue, but we note that the current valuation of the company is higher, so it has certain risks, may be appropriate to seize trading opportunities.
4, investment advice
Russian potash giant exit BPC, potash giant monopoly or will be affected, the outlook is expected international potash prices will fall, thereby affecting the domestic potash prices, down QSLI (000792) rating to "underweight" in the short term no longer concerned; Spandex prices continued to rise, trading opportunities can grasp, such as Huafeng Spandex (002,064), Taihe new material (002,254), Xinxiang Chemical Fiber (000,949), UHL (000,584), etc., but the higher valuation, should pay attention to risk; Daily News another disclosure, the proposed companies continue to focus on investment opportunities than-expected results.
5 Risk Warning
Policy risks; crude oil price fluctuations; safety risks.