Reproduction of product prices tide chemical company seized profit

The price increase is an eternal hot spot in the chemical sector hype. The price of cotton soared to cotton substitutes for polyester and viscose, which provided sufficient room for price increases. In the fourth quarter, with the advent of traditional peak season and concerns about market supply, market participants raised BDO, MDI and spandex. Price expectations are growing stronger.

Butterfly Effect on Cotton Price The price of cotton has soared this year. On September 27, the price of domestic cotton prices hit another record high. Among them, the Zheng 1105 cotton contract once exceeded 22,000 yuan/ton, which was the highest since the listing of the contract in June 2004. In the spot market, cotton prices have also hit new highs. As of October 14, China's cotton price index has risen to 23,923 yuan / ton, creating the highest record since the release of cotton prices in 1999. The rise in cotton prices also boosted the prices of two chemical products, polyester and viscose staple fiber.

Polyester: In the consumption structure of China's textile fibers, cotton, viscose staple fiber, and polyester staple fiber occupy the dominant position. After the cotton spinning enterprise spins it into cotton yarn and blended yarn, the yarn and viscose filament are then used by the weaving enterprise. Weave cotton and blended fabrics with polyester filaments. At this stage, the cotton price is at a historically high level. The downstream weaving companies are facing higher cost pressures and have to look for alternatives with relatively low prices. As a result, polyester demand surges and prices continue to be positive.

Since August 2010, polyester staple fiber has followed the trend of cotton prices, and there has been a sharp increase in prices, from 9600 yuan/ton to 13,000 yuan/ton, an increase of up to 35%. The price of polyester filaments also showed a significant upward trend. Dongwu Securities analyst Huang Haifang expects that the supply and demand gap for cotton will remain in the future and cotton prices will continue to fluctuate. The "substitution effect" of polyester will continue to be realized, and polyester is expected to enter the "super boom cycle." In addition, the stabilization of the price of polyester raw materials also contributed to a steady increase in the price of polyester.

According to industry insiders, the spread between polyester staple fiber and cotton is generally between 3,000 and 4,000 yuan/ton, and the spread is now over 10,000 yuan/ton, which is bound to increase the price of polyester staple fiber. At present, there are Huaxi Village, S Yiyi, and Jiangnan High Fibre in the listed companies that produce polyester staple fibers. Xinmin Technology is a manufacturer of polyester filaments. Among them, Yan Xiaofeng, an analyst at China Merchants Securities, believes that Huaxi Village is the company with the greatest elasticity in the price rise of A-shares. For every RMB 1000/ton rise in the product, the company's performance will increase by RMB 0.15/share.

Viscose staple fiber: Similar to polyester, as a substitute for cotton, the price of viscose staple fiber has also risen rapidly in the near future. Listed companies that produce viscose staple fibers include Shandong Hailong, Aoyang Science and Technology, Jilin Chemical Fiber, and Nanjing Chemical Fiber. However, due to the fact that the main raw material of viscose is cotton linters, its price rise will not lose cotton, so the current spread is limited. A staff member of Shandong Hailong told Red Week that the increase in cotton price is not much of a benefit for the company. Although the ex-factory price of viscose staple fiber has indeed increased in the recent period, raw materials for cotton linters Prices have also risen quickly. "At present, the company's profitability is better than the middle of this year, but it's not much better."

BDO, MDI, Spandex outlook may be optimistic Everbright securities analyst Cheng Lei believes that the strength of the fourth quarter of commodities has a great role in the domestic chemical industry out of the upward cycle. The prices of chemical products such as BDO, MDI, and spandex have also come out of a strong trend.

BDO: The overall price of BDO has recently risen significantly. The upward adjustment of manufacturers' quotas has aggravated market price expectations. In September, the overall domestic BDO market trended sharply higher, with shortage of on-site supplies and better downstream demand. With tight supply, manufacturers in Jiangsu and Shandong provinces generally started to operate at a low level. The majority of output products were provided to the old contract customers in the previous period, and basically no stock for new customers. The recent tight supply of goods in East China, the domestic bulk import and export quotation from the beginning of September 18000 ~ 18500 yuan / ton, rose to 20,000 to 20,500 yuan / ton, an increase of up to 2,000 yuan / ton. With the upward movement of BDO price centers and the driving of equipment overhaul, brokerage firms generally expressed their optimism for Shanxi's three-dimensional advantage in raw materials.

MDI: In terms of demand, October is a peak demand season for MDI downstream end markets such as construction industry and spandex industry. With the continued implementation of the policy of home appliances going to the countryside and automobile to the countryside, refrigerators in home appliances and car seat cushions and other industries are The demand for aggregated MDI will grow. With the economic recovery in Europe and the United States, domestic exports began to recover, especially the smooth export of textiles and footwear will help the recovery of pure MDI demand. On the supply side, there are many installations in foreign countries that have maintenance plans in the past one or two months. Some foreign installations have not been opened since the second quarter of last year. Market participants believe that in the short term domestic polymerization of MDI market will still be tight supply, with the development of downstream demand, cargo tight situation will further intensify, in October the domestic MDI market will continue to rise steadily and steadily higher as the main line. As the only company that produces MDI in the A-share market, Yantai Wanhua's MDI listing price stayed at 17,000 yuan/ton in October. Taking into account the cost support, it is expected that there will be almost no room to go down; the pure MDI bottled listing price will be 19,200 yuan. 18,800 yuan, up 600 yuan/ton from September. Cheng Lei said that with Yantai Wanhua’s acquisition of MDI and TDI assets in Europe, the pattern of oligopolistic pricing in the MDI industry has become more apparent, and the company’s position in it has been increasing.

Spandex: The rise in raw materials, the arrival of the season and the gradual relaxation of power restrictions in Zhejiang, the spandex industry has gradually entered the period of volume and price rise. On September 16th, spandex manufacturers reached an agreement to raise their selling price through the industry coordination meeting. On September 20, the price of 40D and other specifications was uniformly raised by 3,000 yuan/ton, and the adjusted minimum price of 40D was 54,000 yuan/ton; and in October, On the 1st of the same day, the price of each specification was increased by 2,000 yuan/ton. All market players are optimistic about the market and look forward to the arrival of a new round of price increases. According to industry analysts, the average gross profit margin of the spandex industry before the price increase was 22% to 25%. Due to the balance of supply and demand in the upstream of the spandex industry, the production cost of spandex manufacturers did not change much. After raising the price by 2,000 yuan, the companies The gross profit margin will increase by about 3 percentage points to 28%. The profitability of Huafeng Spandex, Yantai Spandex, and Woori Holdings will certainly increase.