Ping An Securities·2025-12-21 09:32Investment Rating - The report maintains a "Strong Buy" rating for the oil and petrochemical sector [1]. Core Viewpoints - Progress in peace negotiations between Russia and Ukraine has led to a decrease in oil prices, reflecting a retreat from geopolitical premiums [6]. - The U.S. labor market shows signs of weakness, with a reduction of 41,000 jobs in October and November combined, and the unemployment rate rising to 4.6%, the highest since October 2021 [6]. - The CPI for November recorded a year-on-year increase of 2.7%, below market expectations, suggesting potential easing of inflationary pressures [6]. - In the fluorochemical sector, the 2026 refrigerant quotas are set to increase, and government subsidies for home appliances are expected to continue, supporting demand [6]. - The automotive sector is experiencing sustained growth due to government incentives for vehicle scrappage and replacement [6]. Summary by Sections Oil and Petrochemicals - The report highlights the successful progress in peace talks between Russia and Ukraine, which has contributed to a decline in oil prices, with WTI and Brent crude futures dropping by 1.67% and 1.09% respectively [6]. - The U.S. refining capacity is recovering post-maintenance, with a slight reduction in commercial crude oil inventories, while gasoline and jet fuel stocks are increasing [6]. - The report notes that domestic oil companies are diversifying their oil and gas sources to reduce sensitivity to international oil price fluctuations [7]. Fluorochemicals - The 2026 production quotas for HFCs have been announced, with a total of 797,845 tons, an increase of 5,963 tons from the previous year [6]. - The demand for refrigerants is expected to improve due to ongoing government subsidies and a strong automotive market [6]. Semiconductor Materials - The semiconductor materials sector is experiencing a positive inventory destocking trend, with improving fundamentals in the end market [7]. - The report suggests that the upward cycle in semiconductor materials, combined with domestic substitution, may lead to further price increases [7].