Guoxin Securities·2026-01-27 08:50Investment Rating - The report maintains an "Outperform" rating for the refining and chemical sector [1][8][10]. Core Insights - The refining and chemical industry is undergoing a structural transformation driven by supply constraints and cost reductions, leading to a mid-term recovery in refining and petrochemical profits [1][8]. - The Ministry of Industry and Information Technology has issued a growth plan for the petrochemical industry, emphasizing the need for capacity control and the promotion of "reducing oil and increasing chemicals" as a necessary transformation path for refineries [1][19]. - The international oil price is expected to fluctuate within a comfortable range for refineries, with Brent crude oil projected to stabilize between $55 and $65 per barrel by 2026 [2][38]. - The demand for refined oil products is slowing down, but the structural optimization in supply and declining costs are expected to improve refining margins [2][8]. Summary by Sections Industry Growth and Policy - The petrochemical industry is a crucial pillar of the national economy, with a target of over 5% annual growth in value added from 2025 to 2026 [19][21]. - The industry is approaching a policy control line of 1 billion tons in refining capacity, leading to the gradual elimination of smaller, less efficient capacities [20][21]. Refining Costs and Profitability - Recent adjustments in Saudi OSP prices and improvements in VLCC freight rates are expected to alleviate cost pressures on domestic refineries [2][8]. - The overall refining margin is anticipated to improve due to a combination of limited supply growth and structural optimization initiatives [2][8]. PX and PTA Market Dynamics - The supply-demand structure for PX and PTA is improving, with no new PX capacity expected in 2024-2025, leading to a significant increase in PX price spreads [3][8]. - PTA processing fees have also risen, indicating a recovery in profitability for the refining sector [3][8]. Sustainable Aviation Fuel (SAF) Market - The SAF market is projected to grow significantly, with the EU setting a target for SAF blending ratios to exceed 70% by 2050, creating a demand gap that Asia-Pacific countries, including China, are expected to fill [4][8]. - China's SAF production capacity is anticipated to increase rapidly, contributing to the overall growth of the refined oil market post-peak [4][8]. Key Company Recommendations - The report recommends investing in leading domestic refining and petrochemical companies, including China Petroleum, Rongsheng Petrochemical, and Tongkun Co., which are expected to benefit from the recovery in refining margins [8][9][10].