Investment Rating - The report maintains a positive outlook on the chemical industry, particularly highlighting the potential for price increases in urea and ammonium sulfate due to geopolitical tensions affecting supply chains [4][5]. Core Insights - Geopolitical conflicts have disrupted approximately 22% of global urea trade, leading to price increases. The report notes significant impacts from events in Russia, Iran, and Israel on urea production and exports [5][6]. - The report emphasizes a stable global GDP growth rate of 2.8%, which supports steady demand for oil, despite potential slowdowns due to trade policies [5][6]. - The chemical sector is advised to focus on traditional cyclical stocks and specific growth opportunities, with recommendations for companies like Wanhua Chemical and Hualu Hengsheng [5][19]. Summary by Sections Industry Dynamics - Current macroeconomic conditions indicate a mixed outlook for oil, coal, and natural gas, with oil prices expected to remain under pressure due to geopolitical factors and OPEC+ production increases [5][6]. - The chemical industry PPI showed a year-on-year decline of 4.1% in May, influenced by base effects and weaker energy prices [8][10]. Price Movements - Urea prices in China increased to 1,750 CNY/ton, reflecting a 2.9% rise week-on-week, driven by supply constraints and increased demand from agricultural sectors [12]. - PTA prices rose by 8.8% to 5,280 CNY/ton, supported by supply reductions and strong market sentiment [10][11]. Investment Recommendations - The report suggests a focus on companies with strong fundamentals and growth potential, including those in the agricultural chemicals sector like New Oriental and Stanley [5][19]. - Specific stocks recommended for investment include Hualu Hengsheng, Xinlianxin, and Luhua Group, with ratings of "Buy" or "Increase" based on their projected earnings growth [19][20].