Margins of real estate need to be improved, and demand for basic chemicals is expected to recover

The signal of property market deregulation began to release, and private enterprise financing support increased

On November 8, the Beijing Municipal Commission of Housing and Urban Rural Development announced the cancellation of the dual purchase restriction policy for Yizhuang Taihu and Majuqiao sectors, and the release of strong signals from the core city property market. The easing policy is expected to enter an accelerated period, and subsequent policies may be introduced intensively. In terms of private enterprise financing, on November 8, the China Association of Interbank Dealers released the promotion and expansion of private enterprise bond financing support tools to support private enterprises, including real estate enterprises, to issue bonds for financing, which is expected to support about 250 billion yuan of private enterprise bond financing. New measures are expected to accelerate economic recovery, boost consumer confidence, and promote the growth of commercial housing sales.

Marginal improvement of real estate policy, chemicals of the real estate chain are expected to benefit in the future

As one of the most important economic pillars in China, the real estate industry chain contributes more than 10% to GDP. The demand boom of chemicals is greatly affected by the real estate boom.

Aggregate MDI: the application of the real estate chain accounts for 71%, with a market space of 21 billion yuan. At present, the historical quantiles of the aggregate MDI price and price difference are 14.25% and 14.13% respectively, both at a historical low level. The supply of the industry is stable, and there is a large space for resilience due to the real estate recovery.

TDI: Real estate chain applications account for 70%, with a market space of 10.3 billion yuan. At present, the historical quantiles of TDI price and price difference are 25.99% and 25.18% respectively, both at a historical low level. At present, some enterprises at home and abroad are still at the stage of force majeure and maintenance. The prosperity of TDI downstream soft furniture is expected to affect the subsequent demand for TDI.

Organic silicone: the application of the real estate chain accounts for 33%, with a market space of 7 billion yuan. At present, the organic silicone sealant benefits from the upstream raw material 107 glue and 110 raw rubber capacity expansion, and the price falls back. The cost side of the organic sealant has improved, and the rebound of the construction demand side is expected to generate double benefits of cost and demand.

Titanium Dioxide: the application of the real estate chain accounts for 23%, with a market space of 8.9 billion yuan. At present, the price of titanium dioxide is in the break even point of the industry, with limited space for price decline. The chlorination process has cost and performance advantages, and is optimistic about titanium dioxide enterprises with chlorination process.

Soda ash: the real estate chain application accounts for 32.73% of the total demand for soda ash. With the marginal improvement of the real estate policy, the largest downstream flat glass inventory of soda ash is expected to gradually disappear, and the price of soda ash will be effectively supported. At the same time, with the release of silicon material production capacity and the downward price, photovoltaic installation is expected to drive the growth of soda ash demand for photovoltaic glass applications.

Water reducing agent: it is applied to concrete admixture in the downstream, which is closely related to the prosperity of the real estate. With the further increase of the market share of high-performance water reducing agent and the improvement of the edge of the real estate, the high-performance water reducing agent industry is expected to further replace the high-performance water reducing agent in the future.

PVC: The application of the real estate chain accounts for about 50%, and the market space exceeds 60 billion. As of November 11, 2022, the price difference of calcium carbide PVC has fallen to the lowest point in nearly three years. Because the price of ethylene dichloride has also declined, the price of ethylene PVC has fallen to the lowest point in nearly three years, but the price difference data is good. In the future, with the marginal improvement of real estate, the demand for PVC is expected to be repaired and the price difference is expected to be improved.

PVA: The proportion of real estate application in the whole industry chain is close to 30%. The PVA industry pattern has been stable for a long time. Under the background of high crude oil costs, domestic calcium carbide PVA is competitive. With the expectation of marginal improvement in real estate policy and the rapid development of domestic PVB industry, the subsequent demand boom of PVA is expected to rise.

At present, the price and price difference of chemicals in the real estate chain are at a historical low. With the relaxation of the real estate policy, the prosperity of the real estate is expected to recover in the future. The chemicals in the real estate chain are expected to benefit from the restoration of the landscape of chemicals in the real estate chain next year. In the real estate industry chain, the main raw materials of wall insulation materials in building structures are polymeric MDI, the raw materials of glass are soda ash, the raw materials of cement concrete are mainly building grade Cellulose Ether and water reducing agent, and there are many kinds of coatings and adhesives in building decoration, involving acrylic ACID, titanium dioxide, epoxy Resin, PVA, etc. In terms of building related accessories, the raw materials of doors, windows, pipes, household appliances and other links involve PVC, PE, PP, polymeric MDI and TDI.