2017 is a supply-side reform year. Almost all midstream industrial products are welcoming price increases. However, as of Q1 2018, most industrial products prices have reached a high point, and a small number have even fallen.


However, according to a survey of many brokerages such as Guojin, Guohai, and New Era, the supply and demand relationship of the silicone industry is still tense, and product prices are still in the upward channel. Silicone leading Xinan shares (sh600596) continue to benefit.


Core logic


1 The price of silicone products continued to rise, and the average price of each product rose by 48%. After the technical transformation of Xin'an shares (sh600596), the production started smoothly, the output of organic silicon was stable at 340,000 tons, and the volume of operating data increased. 2 Xin'an shares (sh600596) After the new capacity of Jiahe Silicon Industry (sh603260) was put into production, there was no new capacity in the country as of 2019. With the outdated production capacity clearing, the industry concentration increased rapidly; 3 the supply and demand of silicones is tight, and the global demand is 6% per year. Growth, after the leading silicone companies increased the operating rate from 75% to 95%, they still could not meet the downstream demand. It is estimated that the global gap will be 300,000 tons in 2018 (supply 4.835 million tons, demand 5.1 million tons); 4 May Environmental protection inspectors and Shandong Shanghe Summit will further reduce production capacity in the short term, and the price of silicone products will continue to rise in the short term; 52017 global sales of glyphosate will be 5.7 billion US dollars, up 15.27%, exiting in paraquat, foreign giants Under the continuous promotion of restocking and genetically modified (glyphosate-tolerant pesticides) crops, the demand side of glyphosate grew steadily; the supply side was in environmental pressure and supply side reform requirements. Next, low-end production capacity continues to be shut down. It is expected that the price of glyphosate will remain stable in 2018.


Xinan shares (sh600596) is different from other silicone companies because it is also the leader in the silicone and glyphosate industries: its organic silicon production capacity is 340,000 tons, accounting for 12% of the country; glyphosate production capacity is 80,000 tons, accounting for 11.4% of the country. %. At the same time, it combines the production of silicone and glyphosate. Hydrochloric acid by-product hydrochloric acid is used to prepare glyphosate, and glyphosate by-product methyl chloride is used for silicone preparation.


From the perspective of the silicone industry chain, Xinan shares (sh600596) also occupy the industrial cost advantage, and its layout from silicon mine to terminal products.




The DMC of one of the silicone products only rose five times in 2018, and the price per ton rose by 2,500 yuan. According to the calculation of New Era Securities, if the DMC increases the price by 1,000 yuan per ton, the company's profit will increase by 100 million yuan. Currently DMC The price remained at a high of 30,000 yuan / ton.




Caibei Finance APP concluded after summarizing the data of many brokerages. The agency expects Xinan shares (sh600596) to have net profit of 1.18 billion yuan and 1.342 billion yuan respectively in 2018-2019, with an annual compound growth rate of 185%.