International oil prices rise again and adipic acid prices continue to fall

International oil prices climbed once again, reaching a high of nearly nine months. Last week, the market expects that Greece will increase its chances of winning the second round of gambling. The optimism about the European debt crisis will be resolved. In terms of spot, Iran has announced that it has stopped supplying crude oil to six European countries. The market expects this move to push Higher crude oil prices in Europe and the United States, more crude oil will flow to the Asian market. Affected by this, international oil prices continued to rise last week, reaching a new high since May 2011. WTI and Brent International crude oil prices rose 4.63% and 1.94%, respectively, to 103.24 US dollars / barrel and 119.58 US dollars / barrel. The situation in the Middle East has continued to be tense recently, and the cold wave in Europe has further increased the demand for crude oil. It is expected that the short-term international oil price will continue to oscillate upwards.

Acrylonitrile continued its upward trend and pushed the market price of acrylic fibers upward. The overall operating rate of acrylonitrile in China is low, and the inventory of manufacturers is not high. The overall supply of the market is tight, and the supply of imported goods is also relatively limited, leading to a continuous rise in the price of acrylonitrile; the rising cost has also driven up the price of acrylic fibers. Last week, the price of acrylic staple fiber in East China increased by 4.48% to 21,000 yuan/ton, and that of domestic acrylonitrile rose by 4.49% to 16,300 yuan/ton. At present, the downstream of acrylic fiber is still in the post-holiday recovery period. After the cost rises continuously, the purchasing enthusiasm of the terminal is limited. It is expected that the short-term domestic acrylic fiber product price will be dominated by consolidation, and the trend will gradually stabilize.

The overall refrigerant market is stable and it is expected that the downstream demand will improve. Recently, the domestic refrigerant market has been operating stably. The mainstream products R22 and R134a are in good hands and the prices are firm. However, due to the influence of byproducts, the operating rate of manufacturers is difficult to increase further. Last week, Zhejiang Juhua R22 and R134a prices temporarily stabilized at 14,000 yuan / ton and 43,000 yuan / ton. In respect of upstream raw materials, anhydrous hydrofluoric acid recovered rapidly after the holiday and the product was slightly slow-moving. Prices in eastern China fell by 8.24% last week to 8,350 yuan/ton; the demand for dichloromethane downstream product R32 was temporarily stable in East China. The price bottomed out last week and rebounded by 5.26% to RMB 4,000/t. The market outlook for the domestic refrigerant market will also depend on the downstream market demand as well as the improvement of the overall economic environment. It is expected that short-term prices will also be dominated by consolidation.

Discontinued companies resumed work to ease supply, and adipic acid prices continued to fall. The 140,000 tons of adipic acid production plant that Shandong Hongye had previously stopped and overhauled has recently resumed production, which has eased the tight supply situation in the market. Market prices continued to decline last week after falling after the previous week, and they continued to decline last week. The price fell 10.45 percent to 12,000 yuan/ton. The main application of adipic acid is the polyurethane industry, which accounts for more than 60% of total consumption. Polyurethanes can be used as insulation materials in the construction industry. However, as real estate control policies gradually become effective, their overall demand for polyurethane products is affected. In addition, according to statistics, this year's domestic adipic acid production capacity will increase by 980,000 tons to 1.76 million tons. Such a large-scale production will result in an oversupply of adipic acid in China. We believe that the market outlook for adipic acid will not be optimistic. Short-term domestic Adipic acid prices may continue to decline.

Demand is weak and the market is running low. The domestic ** market is currently in the low season of traditional demand, and the overall operating rate of downstream aniline and other products is relatively low. Last week, the price of Anhui Jinrong ** (98%) fell by 6.94% to RMB 1,675/t. The price of intensive prices hovered near the cost line, and there is limited room for further downward adjustment. The demand in the downstream market has recovered recently and it is expected that the short-term domestic price will be slightly raised.

As the upstream costs closely related to crude oil such as ethylene and butadiene rose and the willingness of traders to stock up, chemical prices generally rose after the Spring Festival. We believe that this round of price increase is mainly driven by cost. After the Lantern Festival, most of the chemical downstream industries will start one after another. Whether or not the price of chemicals can be maintained is closely related to the downstream operating rate. As domestic demand gradually recovers, but foreign demand remains weak, we maintain a neutral rating in the chemical industry. However, considering that some product prices have already come out of the bottom, the sub-sectors with a certain monopoly of the supply side can selectively invest, such as the MDI industry and the butadiene industry. For individual stocks, we recommend stocks with growth and valuation advantages, such as Xingfa Group, Jiulian Development, Shanghai Jahwa, Jiangnan High Fibre, Yantai Wanhua and others.