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Strategy of basic chemical industry in 2019: continue to pay attention to 6 stocks in the prosperity of the industry

Zhangjiagang Sansu Machine Co.,Ltd | Updated: Dec 12, 2018

Industry prosperity continued

Reform of 2016-2017 on the supply side, under the influence of the chemical industry decline in growth of investment in fixed assets, the decrease in the number of enterprises, the production capacity to contract, superposition of environmental factors at the same time, the chemical industry ushered in a period of high cycle, under the influence of supply and demand, product prices, corporate performance significantly increased, in 2018, lasted for 2016 years since the business cycle, but there are new change, performance in a fixed asset investment growth, falling demand, the demand side is not optimistic, the change of supply and demand, also make some chemical products price highs, make enterprise has a certain fluctuation.

Cycle strategy: select the sub-industry that the boom continues to rise

There are many sub-industries of basic chemical industry. We have sorted out the operating conditions of the industry in the first three quarters of 2018 from four dimensions and six indicators. We suggest paying attention to the four sub-industries of pesticide, fertilizer, refrigerant and titanium dioxide.Pesticide industry: is already the world's most important domestic pesticide technical production base, supply plays an important role in the whole world, in the reform of the supply side and the role of environmental factors, such as, pesticide production capacity to contract, the downstream demand is stable, pesticide industry will continue to maintain a high sentiment, advice to focus on glyphosate ammonium phosphine, dicamba, grass, the glyphosate production capacity to contract, glycine upstream raw materials prices remain high, glyphosate prices rise;The main reason for the increase in the demand was that the extension of the gm crops was higher than expected.Glyphosate is also benefiting mainly from the rapid growth in its demand.Fertilizer industry: we focus on phosphate fertilizer, mainly because of its upstream phosphate mining resources are strictly limited, capacity reduction, downstream demand is rigid, strongly supporting the price of phosphate fertilizer.Refrigerant and titanium dioxide industry demand side is basically stable, supply side capacity reduction, industry supply and demand pattern improvement, prosperity is expected to improve.