Price hike wave strikes! Chemicals, coal, energy - multiple stocks hit daily limits!

Today’s morning session, A-shares experienced slight fluctuations, with the Shanghai Composite Index switching between red and green multiple times. The Shenzhen Component Index, ChiNext Index, STAR Market Composite, and CSI 50 all declined modestly. Over 4,200 stocks fell, while trading volume remained stable.

In the market, energy concepts, chemicals, agriculture, forestry, animal husbandry, fishery, and high-dividend sectors were relatively active, while engineering machinery, rare metals, aerospace equipment, and cultivated diamonds led the declines.

Chemical Products Spark Price Hike Wave

Chemical stocks continued their strong momentum from yesterday afternoon, with raw material sectors leading the gains. The sector index opened high and rose further, with intraday volume surging over 4%, reaching a four-and-a-half-year high. Baichuan Co., Ltd. hit the daily limit-up at open for the second consecutive day; Luxin Technology opened high and immediately hit the limit; Jinneng Technology and Jinye Technology also surged to the limit.

Glyphosate, petrochemicals, chemical fibers, and agricultural chemicals sectors all rose against the trend. Zhongfu Shenyan opened 20% up and hit the limit; Jilin Chemical Fiber, Taihe New Materials, and Jiangnan High Fiber also reached the limit.

Due to the Middle East tensions, international crude oil prices briefly broke the $100 per barrel mark, directly increasing costs for basic chemicals like phenol and acetone. According to GF Securities, among 336 chemical products tracked in the first week of March, 195 saw price increases, accounting for 58%.

This morning, the main futures contracts for para-xylene and PTA both hit the daily limit-up; futures for PVC, polypropylene, ethylene, and pure benzene also surged to the limit.

Additionally, listed chemical companies have recently issued price increase notices. Jianbang Co. stated that recent sharp rises in upstream raw material prices and tight supply have significantly increased production costs. After careful consideration, the company will adjust product prices from March 10: for functional additive series products, the price of “Sike (2-hydroxyethyl) isocyanuric acid” will increase by 1,500–2,500 yuan/ton; for PVC heat stabilizers, the prices of dibenzoylmethane (DBM)/stearoylbenzoyl methane (SBM) will rise by 2,500–3,500 yuan/ton, and acetylacetone salts by 1,000 yuan/ton.

Chemical companies such as Jinghe Integration, Runtu Co., Satellite Chemical, Red Wall Co., and Huafeng Superfiber have also announced or planned price hikes.

Huafu Securities believes that by 2026, the chemical industry may not only see opportunities in certain sub-sectors but could also experience a cyclical recovery across the entire industry, marking a new start in supply-demand rebalancing.

Energy Stocks Continue to Strengthen

Similarly affected by Middle East tensions, rising oil and gas prices have heightened global concerns over energy security, leading to a rally in alternative energy, coal, and new energy sectors this morning. The coal mining sector index surged over 5% at one point, hitting a record high, with half-day trading volume exceeding that of the entire previous day. Zhengzhou Coal & Electricity hit the daily limit just before midday; Yankuang Energy also strongly closed at the limit.

Historical experience shows that energy crises are often accompanied by sharp increases in coal prices. During the Iran-Iraq War in 1980, oil prices rose over 200%, and international coal prices increased by 61%. During the Arab Spring in 2011, European ARA coal prices briefly exceeded $130 per ton. The 2022 Russia-Ukraine conflict pushed Newcastle coal prices up to $453 per ton.

Changjiang Securities estimates that if the Strait of Hormuz remains blocked long-term, global coal demand for power generation could increase by 84.86 million tons annually; if China’s coal chemical plants operate at full capacity, this alone could boost domestic coal consumption by nearly 50 million tons.

Zheshang Securities data shows that as of last week, the total coal inventory (including port stocks) of key monitored companies was 24.54 million tons, down 33.2% year-on-year. Meanwhile, the available coal stock days at coastal power plants dropped to 16.7 days.

The new energy sector has also been active recently, with the wind power index reaching a historic high this morning. Greenland Power opened with a limit-up after about 1 minute of trading, marking its third consecutive day at the limit; Chint Power also hit the limit-up in about 7 minutes, its second consecutive day at the limit, reaching a new high (adjusted for dividends); Jinshi Technology and Datang Power also surged to the limit.

Huatai Securities research reports indicate that the US-Iran conflict has driven a significant rise in global oil prices, which in turn has pushed up overseas coal prices. The increase in coal prices enhances market-based electricity prices, benefiting clean energy sources with stable costs. The report also recommends more stable coal-fired power companies with integrated operations.

Proofreader: Gao Yuan