Burst! A document in Yunnan is spreading all over the Internet, but the overnight market of goods has collapsed. What happened? How long will the strong cycle last if the production of the two industries is reduced by 90%?
Another wonderful day of the cycle!
On Monday, the market differentiation was serious, but the profit making effect was not bad. Individual stocks were still rising more than falling less, and the cyclical sector was ushering in a big market. Among them, chemical stocks are too fierce, with 30 shares in the whole plate rising or exceeding 10%. Steel, nonferrous metals and other sectors also performed very well. In comparison, the growth enterprise market and the science and technology innovation board, which have strong growth stock attributes, are much dimmer.
So what happened? Analysts believe that there are two main reasons: first, the overnight peripheral cyclical commodities rose dramatically last Friday, driving market sentiment to a certain extent; Second, a notice entitled "Notice of Yunnan Energy Conservation Leading Group Office on Firmly Doing a Good Job in Dual Control of Energy Consumption" was circulated on the whole network. From the content of the document, it involved production restrictions in many industries, among which the production capacity of yellow phosphorus and industrial silicon was cut by 90%.
The problem now is that the real demand of the market is not particularly sufficient, but the prices of commodities are rising. The main reasons behind this are, first, liquidity, and second, production reduction due to carbon peaking and carbon neutralization. This problem is not insurmountable, but it requires trade-offs.
Yunnan documents are spreading all over the Internet
Recently, the Office of the Leading Group for Energy Conservation in Yunnan Province issued the Notice on Resolutely Doing a Good Job in Dual Control of Energy Consumption, which was widely circulated on the Internet. According to the widely circulated Notice, it is required to strengthen the control of key industries. These industries include steel, cement, aluminum, etc.
From the content of the document, both yellow phosphorus and industrial silicon industries were cut by 90%. In addition, in four industries including fertilizer manufacturing, basic chemical raw material manufacturing, coal processing, and ferroalloy smelting, enterprises whose energy consumption per 10000 yuan of added value is more than twice the industry average are also required to limit production by 90%.
How big will the impact be?
The simple logic is that the probable rate of production restriction will cause the price of relevant spot products to rise, and further lead to the sharp rise of futures products and relevant stocks.
According to the information provided by the WeChat official account "Photovoltaic Information", the raw materials for polysilicon production are trichlorosilane and hydrogen, which are included in the reduction furnace in a certain proportion for thermal decomposition and reduction reaction to produce polysilicon rods. Among them, trichlorosilane is produced by reaction of hydrogen chloride and industrial silicon powder in the synthesis furnace. Industrial silicon powder is produced by reduction reaction of quartz ore and carbon under the condition of electricity, and then crushed into industrial silicon powder.
According to the regional distribution of China's industrial silicon output in the first three quarters of 2020, Yunnan's industrial silicon output accounts for 21% of the total output, second only to Xinjiang, and plays an important role in industrial silicon production. The sharp reduction of industrial silicon production may affect the price adjustment of polysilicon. Since August, the price of silicon material has risen for five consecutive years. At present, the price range of domestic single crystal compound feeding is 206-217 yuan/kg, and the average transaction price is 212.3 yuan/kg; The price range of single crystal dense material is 204-215 yuan/kg, and the average transaction price is 210.2 yuan/kg; The price range of single crystal cauliflower is 202-212 yuan/kg, and the average transaction price is 207.9 yuan/kg.
In terms of yellow phosphorus, China's yellow phosphorus production capacity is mainly distributed in provinces with relatively concentrated hydropower resources and phosphate rock resources, namely Yunnan, Guizhou, Hubei, Sichuan, and Yunnan, where the production capacity accounts for 46% of the total yellow phosphorus production capacity. Yellow phosphorus is used in industry to prepare high-purity phosphoric acid from white phosphorus. Since this year, the main reason for the price rise of yellow phosphorus is the expanding demand for lithium iron phosphate.
It may be due to the rumor of limited production in Yunnan that the whole chemical industry sector crazily welcomed the rising limit tide on Monday, with the rising limit or rising from more than 10% to 30 stocks (except new stocks).
How long can a strong cycle last?
Non ferrous metals, iron and steel, coal and chemical industry dance together. Behind this is the power of liquidity, as well as the power of carbon neutrality and carbon limit. In fact, from the perspective of demand, except for new energy, it may not be as strong as expected. Moreover, with the rise of the price of these resources, the development speed of new energy (including photovoltaic and new energy vehicles) will also be affected. So, how long can a strong cycle last?
Shengang Securities believes that under the impact of the third round of the epidemic, the vulnerability of the global supply chain has been completely exposed, and the further repair of the supply chain depends on the disappearance of the epidemic in major countries in the global industry chain. At present, the United States and Southeast Asia, as the countries and regions with the most serious epidemic in this round, are still experiencing a surge in the number of newly diagnosed people, This round of supply chain shortage will last for at least one quarter, and the market dominated by cyclical stocks is expected to continue to rise in Q4 2021.
However, in terms of consensus expectations of Wanda, although the 2021 annual cycle and growth are expected to perform well with high profit growth, the 2022 annual cycle will see the largest month on month decline in growth, and the growth rate will return to normal. At the same time, the small and medium-sized stocks dominated by CSI 500 and CSI 2000 will also face a sharp decline in the growth rate in 2022, which makes the financial consumption and market value market expected to return in 2022.
Galaxy Securities said that the steel industry was affected by the regulation of domestic crude steel, and the industry production restriction directly enhanced the upstream profitability and increased the industrial concentration. The supply side of the coal industry has been tightened by the impact of "carbon neutrality" and policy supervision, and it is difficult to change the pattern of domestic coal supply exceeding demand in the short term; From the perspective of demand, the domestic economic recovery has driven the growth of social electricity consumption, while the domestic energy structure will remain dominated by thermal power in the short term. The demand for coal is strong but the supply is tight, and the coal price remains high. Aluminium: In terms of supply, the national policy of "dual control of energy consumption" superimposed on the dual carbon target has restricted the output of the high-energy consumption industry represented by electrolytic aluminium. At the same time, domestic bauxite imports are highly dependent, and the Guinea coup has led to a greater risk of cost for the aluminum industry; In terms of demand, the extensive use of aluminum by new energy vehicles in recent years has greatly boosted the downstream demand for aluminum. Shortage of supply will be the medium and long-term trend of the industry, and the fundamentals support the medium and long-term rise of aluminum prices. With the arrival of winter, the contradiction between supply and demand is expected to lead to the simultaneous increase of quantity and price in related industries, and the rise of price center in cyclical industries is an inevitable trend.
It is worth noting that most domestic overnight commodity futures fell, as did foreign non-ferrous metals. Some sources pointed out that the regulation of rising commodity prices may come soon. This may be the beginning of the recent turmoil in strong stocks.
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