1. Glyphosate: Environmental protection incidents in Hebei, Shandong and other places have affected the normal production of glycine, the raw material of glyphosate (the glycine route accounts for 70% of the overall glyphosate production capacity, and the incident-related areas account for 70% of the total glycine production capacity). In the past month, The prices of glycine and glyphosate increased by more than 20% and 10% respectively; subsequent environmental protection inspection teams stationed in Sichuan and Hu
Northern and other places are expected to welcome glyphosate to environmental regulations. The continued fermentation of environmental incidents will double suppress the supply of glycine and glyphosate, and leading companies with environmental regulations are expected to benefit. Environmental incidents, combined with the peak demand season for glyphosate that started in the fourth quarter, as well as low inventory, cost boosting and other factors, the short-term price increase of glyphosate is expected to continue. The current price of glyphosate technical material is 23,000-24,000 yuan/ton.
2. Organic silicon: This year, the price of organic silicon dropped from 16,600 yuan/ton at the beginning of the year to 14,100 yuan/ton in September, and then rebounded to the current 17,000 yuan/ton. The increase in the prices of the main raw materials silicon metal and methanol is the reason for the price recovery. An important driving force is that Dongyue, Sanyou and other major factories are currently taking turns to suspend production for maintenance, and industry inventories are low. Orders from organic silicon companies are generally scheduled until the end of December, and current prices are not enough to support the resumption of production of small production capacities that have been suspended. Organic silicon prices Continued bullish outlook.
(Jiangxi New Materials Co., Ltd.)
3. Key recommended targets:
Xingfa Group: The leader in glyphosate, with an equity production capacity of 97,500 tons. The raw material glycine is all self-sufficient and has surplus for sale. It has obvious cost advantages over other first-tier manufacturers; the silicone production capacity is 180,000 tons, and the current net profit per ton should be 500 yuan. Above; every 1,000 yuan increase in the prices of glyphosate and silicone corresponds to an increase in EPS of 0.16 yuan and 0.11 yuan respectively.
Xin’an Shares: Glyphosate has a production capacity of 80,000 tons. Although the raw material glycine is all outsourced, the price difference between glyphosate and glycine has also expanded significantly recently; the leading organic silicon company has a production capacity of 280,000 tons and half of the raw material metal silicon is outsourced, which will benefit from the raw materials. The increase in the price of silicone metal has driven up the price of organic silicon. The current net profit per ton is nearly 2,000 yuan; every 1,000 yuan increase in the prices of glyphosate and organic silicon corresponds to an increase in EPS of 0.10 yuan and 0.13 yuan respectively.
Other recommendations: Yangnong Chemical, Jiangshan Co., Ltd., Hebang Co., Ltd., etc. (Huachuang Securities)
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