THE PROFIT LEVEL OF THE CHEMICAL INDUSTRY WILL CONTINUE TO IMPROVE

China is going deep into production capacity, accelerating the exit of "zombie" enterprises, and establishing and improving the exit mechanism of backward production capacity, among which the petrochemical industry is an important part of the implementation of the production capacity policy.

Between 2016 and 2017, China's state council, the ministry of environmental protection and other departments have issued a number of environmental policy laws, among which the petrochemical industry is the focus of monitoring and rectification.Is expected in 2018, with the green taxes levied policies rolled out across the country, environmental protection will be forced to become China's manufacturing industry, including chemical, a new threshold, supply side is cooperate with related policy reform, accelerate the elimination of backward production capacity.

Due to the country to high-polluting, high-energy consuming heavy chemical industry policy adjustment, the chlor-alkali chemical industry is facing overcapacity, energy-saving, environmental protection and other comprehensive factors, led to the competition between enterprises in the industry on the one hand, on the other hand also increased the concentration of chemical industry, eliminate backward production capacity, help industry capacity utilization effectively improve and optimize the allocation of resources, enhance the level of industry profitability.

Benefiting from the continuous deepening of supply-side reform and the upgrading of environmental supervision and regulation, the market concentration degree of chemical industry is improved, and the annual profit level of chemical enterprises in 2017 is significantly improved.According to forward-looking industry institute released the fluorine chemical industry market demand forecast and investment strategy analysis report, according to the basic chemical industry listed companies, a total of 2017 operating income of 4.051261 trillion yuan, up 25.52% from a year earlier, the realization of operating profit of 209.833 billion yuan, up 43.70% from a year earlier, a net profit of 168.556 billion yuan, up 39.23% from a year earlier, an upward trend in chemical industry profitability.

The overall operating profit margin of the industry was 5.18%, up 14.60% from the same period last year, and the overall sales net interest rate was 4.16%, a year-on-year increase of 10.93%. The profits of soda, nitrogen and polyurethane increased greatly, and the market was expected to continue in the boom in 2018.Benefiting from the increase in the price of raw materials in the supply side, the increase in the price of chemical products is obvious, and the income of the 17 sub-sectors has all increased this year.

Among them, net profit of pure alkali, nitrogenous fertilizer, carbon black and polyurethane was up before the year-on-year growth.The industry of viscose, tire, compound fertilizer, chlor-alkali and modified plastics has experienced a different degree of decline.Supply side reform and downstream demand boost, carbon black and nitrogen fertilizer industry turnround.With the deepening of the supply-side reform, the supply and demand pattern of the molecular industry is substantially improved, such as polyester, polyurethane and chlor-alkali industry, and the air quality of 2018 is expected to continue.

In the long term, the leverage ratio has fallen significantly and the balance sheet has been repaired.In 2017, with the continuous improvement of the chemical industry and the continuous improvement of corporate profits, the balance sheet of the industry has been significantly improved, and the asset operation level has been greatly improved.The turnover rate of the total assets of carbon black, nitrogen fertilizer and polyurethane was relatively large.

In terms of asset-liability ratio, the asset-liability ratio of the basic chemical industry in 2017 was 49.47%, down 1.52 percentage points from the same period last year.Son industry the larger the reduction ratio in polyurethane (22.35%), nitrogen (11.12%), soda ash (8.35%), etc.In recent years, the construction of the project has been decreasing year by year, the new capacity of the industry is decreasing year by year, the industry concentration degree is further promoted, and the leading position is further consolidated.

In the long term, the investment growth rate of the chemical industry is decreasing year by year, the supply of new capacity is limited, and the domestic environmental pressure is normalized, and the supply side is expected to continue to shrink.Under the background of stricter environmental protection at the same time, the backward of medium and small capacity were closed, the department of molecular industry "good money after bad money" phenomenon is improved, as the industry concentration degree of ascension, leading enterprises to expand our market share, industry pattern of supply and demand will continue to improve.

                                                                                                                                               By Feifei