Chemical industry: Boom bottomed out and industry concentration continued to increase

The profitability of the industry has bottomed out, and the share of leading companies is expected to continue to increase

The profitability of the chemical industry has bottomed out.

Leading enterprises, which in turn drives the industry toward integration and concentration.

2020Q1-3: Profits of most sub-sectors decline, and profits of epidemic-related products increase sharply

2020Q1-3 major sub-industries change trends include: 1) Due to the continued decline in oil prices, the upstream industry has large inventory impairment losses, and the performance of the first three quarters has fallen sharply; 2) fluorine chemical, silicone, polyurethane, nylon, pesticide, fertilizer, The profit of dyestuffs and other sub-sectors dropped significantly year-on-year; 3) With the gradual launch of new PX and PTA production capacity and poor foreign trade demand for textiles and apparel, the price of the polyester industry chain dropped significantly, but the refining and chemical projects of leading listed companies contributed to the increase in profit; 4) Plastics Products, rubber products, automotive/construction/daily chemicals, adhesives, coatings and other downstream sub-sectors whose early profits were squeezed.

2020Q3: The prosperity of most sub-sectors rebounds

Changes in the main sub-sectors in 2020Q3 include: 1) Chlor-alkali, nitrogen fertilizer, carbon black, organic silicon, polyurethane and other sub-sectors, with the recovery of downstream demand and product prices, the industry’s profit in a single quarter resumed growth year-on-year; 2) The overall demand for terminal textiles and clothing is sluggish , The price of dyestuffs fell from a high level; but the leading listed companies in the polyester industry benefited from the good profitability of refining and chemical projects, and their net profit increased significantly year-on-year; 3) Plastic products, rubber products, automotive chemicals, adhesives and other downstream sub-sectors, Q3 due to oil prices It is still at a relatively low absolute level, and some epidemic-related products are still in a high boom, and profits continue to grow.

Industry Outlook: The demand for chemical products is expected to bottom out and the supply side will be concentrated and integrated.

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