Is chemical industry a cyclical stock? What do you mean by cyclical stocks?

Chemical stocks are cyclical stocks. Cyclical stocks have the characteristics of high dividend payout and change with the ups and downs of the economic cycle. Moreover, the trend of cyclical stocks is closely related to the trend of commodity prices. Chemical stocks belong to the raw material industry of bulk commodities, and also change with the change of market economic cycle.

The cyclical stock industry also includes: steel industry, non-ferrous industry, automobile industry, real estate industry, brewing industry, construction industry, manufacturing industry and so on. The stocks in these cyclical industries will grow with the development of the market economy, which will increase the market demand for products in these industries rapidly, and will also effectively and quickly improve the performance and stock price of these industries.

On the contrary, when the market economy is declining or depressed, the market demand for products in these industries drops rapidly, which leads to the rapid decline of individual stock performance and stock price in the industry. Therefore, the cyclical stock industry has a strong binding with the trend of market economy, and has a certain early response.

Cyclic stocks are industries with obvious periodicity, not only resource stocks or chemical stocks, but also many others, such as shipping, panel, pork and aquaculture. Some people even say that everything is cyclical, so are liquor, consumption and medicine, but their periodicity is very weak, diluted and regarded as growth stocks. The investment of strong cyclical stocks depends on the change of supply and demand pattern. If the demand is relatively strong and the supply cannot come in the short term, you can continue to invest, such as pork in previous years and shipping this year. If the price rises, other companies will soon be able to expand production, and they will have to run quickly before the price peaks. Last year's masks and gloves were like this. Most people don't recommend investing in cyclical stocks, because they can't distinguish between long-term and short-term, and only long-term stocks are worth investing in. Take the recent power outage as an example. Some products start to increase in price, but if the power is cut off, the price will drop immediately. Such stocks are not worth participating in.

Finally, talk about chemical stocks, which are very complicated. I graduated from chemical engineering, and dare not say that I know the chemical industry like the back of my hand. Some chemical stocks are resource stocks, such as the phosphorus chemical industry mentioned earlier, depending on how many mines you have. Part of it is circulation, such as propylene oxide, soda ash, caustic soda, PVC and so on. In fact, these can only be short-term participation, eating meat and running away. This pure bulk chemical has a low threshold and is very easy to expand production. As soon as the price came up, everyone tried their best to expand production, and the price soon went down. The third is fine chemicals and new chemical materials, which are the most worthwhile investments, because they are highly technical and are nothing. In particular, the demand for materials related to photovoltaic and lithium batteries has grown rapidly, but the supply has completely failed to keep up. What are the detailed directions? Such as photovoltaic EVA particles, lithium hexafluorophosphate, lithium battery solvent, additives VC, PVDF, thionyl chloride, etc. Lithium batteries, VC and other solvents all have super-high technical threshold, and the purity of 5 9s is beyond the reach of most enterprises, let alone mass production, and there is a verification cycle for customers for more than two years. Therefore, the stocks of new chemical materials should be valued according to growth stocks, and certainly not according to cyclical stocks, at least for 3-5 years. Shida Shenghua's market, the wave in February is the annual report performance market, and April-July is the process of drawing valuation, switching from chemical stocks to new energy, from the traditional 10 times valuation to more than 30 times valuation.