Chemicals: The macro-level weakened in the fourth quarter
In the first three quarters, the domestic macro economy as a whole performed well, not only achieved the goal of economic soft landing, but also continued to maintain a stable monetary policy and structural adjustment policies, the GDP growth rate has rebounded slightly. The data shows that in August 2017, the added value of industrial enterprises above designated size increased by 6.0% year-on-year. From January to August, the added value of industrial enterprises above designated size increased by 6.7%. On the whole, the growth rate of production in high-energy-consuming manufacturing industries has continued to decline, but high-tech industries and equipment manufacturing industries have maintained rapid growth, and related investments have accelerated to emerging industries. The growth rate of Shuangchuang Investment continued to increase. With the industrial transformation and upgrading, the Chinese economy accelerated the conversion of old and new kinetic energy.
In the chemical industry, the specific measures taken by the environmental supervision policy have been fully implemented, and the outdated production capacity has been fully cleared. The prosperity of some industries has rebounded, and the demand in the emerging fields has increased significantly. In particular, the coal and steel industries have started to work due to industry capacity in the first half of the year. The rate and value of the focus have been continuously revised, and the profitability of the company has been continuously improved. The bull market created by the black products in the first half of the year has caused a collective turnaround in the industry to win a good situation, coupled with the support of the inventory cycle, the company’s operating conditions have been able to Comprehensive improvement.
However, entering the traditional demand season of the gold, nine silver and ten chemical industries, the market trend was not satisfactory. As the domestic demand growth showed no obvious highlights, the environmental protection policy storm was flat, and the operating rate of some industries gradually recovered or even reached a high level over the years, but the actual consumption did not appear sharply. There are signs of growth, so black products are the first to experience a sharp dip, but the industry operating rate is still high, and it is likely to enter the destocking cycle again. Therefore, in the first half of the year, some industries will be further adjusted after the fourth quarter, and it is not conducive to the outdated production capacity, and it is likely that the results of the supply-side structural adjustment will fall short. Therefore, in the second half of the year, the chemical industry as a whole is in the “cooling down” stage, and the virtual high bubbles generated by various “conceptualized” speculations will be digested by the market itself.
From the perspective of the external environment, the US contraction is expected to continue to increase, but the actual economic recovery momentum is still weak, and the risk of shock to emerging economies still exists. Other major foreign trade regions such as Europe are facing the exit of the monetary easing cycle, plus trade protectionist barriers. Spread across the globe will continue to put pressure on domestic exports, and the expected growth rate will continue to decline in the fourth quarter.
It can be seen that in the second half of the year, the domestic macroeconomic growth rate will continue to operate at the bottom of the L-type, while the emerging areas are still insufficient to support the effective demand, which can occupy a major proportion. The structural imbalance in the traditional field is difficult to be effectively reversed in the short term. The specific industry as a whole will be in a cooling cycle, and the data that will affect the industrial added value will likely be weak. In the absence of new kinetic energy and consumption growth highlights, the chemical industry investment growth rate will continue to decline and is likely to continue negative growth. In the fourth quarter, the chemical product market is expected to focus on the bottom support, and it is likely that the black line will still be the leader. It is expected that the overall destocking cycle will be relatively long, and the industry's profit expectations in the industry will periodically decline. The price bubbles and virtual high profit margins of some industries will return to rationality and be effectively compressed.