Chemical cycle on the elastic sub sector is open

before 2016 three quarter, SWS division of chemical industry 271 listed companies (excluding Sinopec (5.52,0.110,2.03%), China Petroleum (7.70,0.050,0.65%)), achieved a total revenue of 861 billion 680 million yuan, down 5.2%, attributable to shareholders of the parent company net profit of 39 billion 480 million yuan, an increase of 25.6%. Boom rebound. The chemical industry overall net profit increased substantially, the company continued to improve profitability. As the chemical industry usher in the price cycle, highlighting investment opportunities in industry.

Chemical cycle: opening is different from the past, this round of chemical products rose mainly from the cost driver and the supply side reform power, coupled with the continuous depreciation of the RMB, the export good, boost demand. Since bottoming macroeconomic stabilization, the devaluation of the renminbi continued, the supply side continued to force reform, backward production capacity contraction is the trend of environmental protection, compared with the previous year soared, environmental factors will continue to ferment, low inventory will still be the norm, the tight balance between supply and demand constantly brewing prices momentum, we are still optimistic about the chemical price cycle.

Embrace the cycle, than on the elastic sub sectors. From the chemical “clothing, food, housing and traveling to recommend related industries. “Clothing”, continue to recommend periodic anti rotor industries such as viscose staple fiber, PTA plate; “food”, the price elasticity of agricultural sector concerns such as urea, glufosinate; “live”, resource materials and sub industry opportunities oversold, pay attention to PVC, salt, two base; “line”, pay attention to tire and rubber.