美伊冲突持续叠加春耕旺季，硫磺与钾肥供需或进一步紧张

Investment Rating - The report maintains an investment rating of "Outperform the Market - A" for the chemical industry [6]. Core Insights - The chemical industry is currently at the bottom of a four-year down cycle, with indicators suggesting a potential turning point in 2026. The China Chemical Product Price Index (CCPI) has dropped 39% from its peak in 2021, indicating historical low levels [19][20]. - The supply-demand dynamics for sulfur and potassium fertilizers are expected to tighten due to geopolitical tensions and seasonal agricultural demand, particularly in the context of the ongoing US-Iran conflict [1][12]. - The report highlights the shift in the global chemical landscape, with Chinese companies gaining market share due to cost advantages, while European firms are reducing capacity due to high energy and compliance costs [20]. Summary by Sections 1. Core Insights - The chemical industry is poised for a potential recovery in 2026 after a prolonged down cycle, with signs of stabilization in profitability and capital expenditure [19]. - Geopolitical tensions, particularly in the Middle East, are impacting the supply of sulfur and potassium fertilizers, leading to increased prices and potential supply shortages [1][12]. 2. Chemical Sector Performance - The chemical sector has underperformed recently, with a significant drop in the sector index compared to broader market indices [27][29]. - In the past week, all 26 sub-sectors within the basic chemical industry experienced declines, with notable drops in phosphorus and nitrogen fertilizers [33]. 3. Price and Margin Analysis - Sulfur prices have surged, with current spot prices at 5,300 CNY/ton, reflecting a year-on-year increase of 117.21% [2]. - The report suggests that the profitability of sulfur iron ore acid production may become more favorable compared to traditional sulfur acid production due to rising sulfur prices [11]. 4. Supply and Demand Dynamics - The report anticipates a supply-demand gap for sulfur of over 10 million tons in 2026 if geopolitical tensions persist, particularly affecting imports from the Middle East [3][4]. - For potassium fertilizers, the report indicates a projected supply-demand gap of 236,000 tons in 2026, exacerbated by geopolitical risks affecting trade routes and production [12]. 5. Investment Opportunities - The report recommends focusing on companies positioned to benefit from the tightening supply of sulfur and potassium, such as Yuegui Co. and Yara International [11][12]. - It also highlights the potential for value re-evaluation of leading chemical companies in China due to their competitive advantages in the global market [20].