Core Viewpoint - The article discusses the increasing green trade barriers imposed by Western countries, which pose systemic challenges to China's industries such as renewable energy and steel, under the guise of environmental protection [1][2]. Group 1: Green Trade Barriers - The green trade barriers from the US and EU are becoming systematic, standardized, and refined, with significant policies like the US Inflation Reduction Act (IRA) mandating that by 2029, 100% of electric vehicle battery components must be assembled in North America [2]. - The EU's battery regulations require foreign batteries to establish a "battery passport" by 2025, disclosing extensive information about material sources and carbon footprints, which raises compliance costs and risks of technology leakage [2]. - The Carbon Border Adjustment Mechanism (CBAM) will impose import taxes on high-carbon products starting in 2025 for the US and 2026 for the EU, increasing export costs for Chinese products, with estimated cost increases of 652 to 690 RMB per ton of steel, leading to a 15% to 20% decrease in price competitiveness [2]. Group 2: Strategic Response - Companies should adopt a proactive approach to address these barriers through a four-phase strategy: deconstructing current policies, responding to immediate challenges, resolving mid-term issues, and achieving long-term breakthroughs [3][7]. - In the short term, companies can seek new regional markets or product directions to avoid direct impacts from green trade barriers, such as establishing blockchain supply chain traceability platforms [4]. - In the mid-term, companies can invest in local production facilities in target markets to mitigate the impact of carbon tariffs, as seen with Longi Green Energy's factory in Ohio benefiting from tax credits [5]. Group 3: Long-term Strategies - In the long term, companies should focus on developing low-carbon technologies and circular processes to enhance their global competitiveness in green products [6]. - Establishing mutual recognition of environmental certifications between China and the EU can help meet carbon footprint accounting requirements [6]. - Companies should aim to lead the formulation of international green technology standards, leveraging their technological advantages in sectors like renewable energy and electric vehicles [6][7].

Report Industry Investment Rating No relevant content provided. Core Views - Crude oil: The weak retaliatory action by Iran and the full ceasefire between Iran and Israel have significantly reduced the geopolitical risks in the Middle East, alleviating concerns about crude oil supply disruptions. However, the geopolitical risks in the Middle East cannot be completely ruled out. Crude oil has entered the seasonal travel peak season, and U.S. crude oil inventories have dropped to a low level. But the latest EIA report shows an unexpected increase in U.S. crude oil and gasoline inventories, and OPEC+ has agreed to increase oil production by 548,000 barrels per day in August. It is recommended to temporarily exit the previous short positions in crude oil [7][14]. - Bitumen: The bitumen开工率 has rebounded slightly, but the downstream demand is still affected by factors such as funds and weather. The geopolitical risks in the Middle East have cooled down, and OPEC+ plans to increase production in August, which puts pressure on the crude oil market sentiment. As it gradually enters the peak season, it is recommended to go long on the 09 - 12 spread of bitumen at low prices [8][81]. - PVC: The upstream calcium carbide price has been slightly reduced. The PVC开工率 has decreased slightly, and the downstream demand has not improved substantially. The inventory pressure is still large, and the real - estate market improvement still takes time. It is expected that PVC will fluctuate at a low level in the near future, and it is mainly recommended to go short at high prices [9][100]. - L&PP: The plastic and PP开工率 have declined to a moderately low level. The downstream demand is weak, and the inventory pressure is still large. The U.S. government's cancellation of ethane - related restrictions is beneficial to the recovery of Sino - U.S. trade. It is expected that polyolefins will fluctuate at a low level, and attention should be paid to the progress of the global trade war [10][126]. Summaries According to Related Catalogs Crude Oil - Supply: OPEC's crude oil production increased in April and May 2025, mainly driven by Saudi Arabia. U.S. crude oil production decreased slightly in the week ending June 27, 2025, and the strategic petroleum reserve inventory increased [20]. - Demand: According to the latest data from the U.S. Energy Agency, the four - week average supply of U.S. crude oil products increased, but was lower than the same period last year. Gasoline weekly demand decreased, while diesel weekly demand increased [36]. - Inventory: As of the week ending June 27, 2025, U.S. crude oil and gasoline inventories increased unexpectedly, while Cushing crude oil inventory decreased [45]. - Geopolitical Risks: The ceasefire between Iran and Israel has reduced geopolitical risks, but risks still exist, such as Iran's uranium - enrichment activities and the situation in the Israel - Hamas negotiations [49][52]. Bitumen - Supply: The bitumen开工率 rebounded slightly last week, and the expected production in July is expected to increase compared with the previous month and the same period last year [67][81]. - Demand: The downstream demand for bitumen is affected by factors such as funds and weather. The road - bitumen开工率 increased slightly, but is still at a relatively low level [74]. - Inventory: As of the week ending July 4, 2025, the bitumen refinery inventory - to - sales ratio increased slightly, but is still at the lowest level in recent years [78]. PVC - Supply: The PVC开工率 decreased slightly, and new production capacity is about to be put into operation. The upstream calcium carbide price has been slightly reduced [91][100]. - Demand: The downstream demand for PVC has not improved substantially, and the real - estate market improvement still takes time. The export of PVC to India is restricted by policies and the rainy season [9][100]. - Inventory: As of the week ending July 3, 2025, PVC social inventory increased slightly and is still at a relatively high level [97]. L&PP - Supply: The plastic and PP开工率 have declined. New production capacity has been put into operation, and recent maintenance devices have increased, alleviating some pressure [112][126]. - Demand: The downstream demand for polyolefins is weak. The PE and PP downstream开工率 are at relatively low levels, and the recovery is slow [118][126]. - Inventory: The petrochemical inventory is at a moderately low level, and the de - stocking speed is average [123][126].

Core Viewpoint - The launch of pure benzene futures contracts at a base price of 5900 CNY/ton is expected to be influenced by supply-demand pressures, oil price trends, and downstream styrene market conditions [1][13]. Supply and Demand Analysis - The supply of pure benzene is under pressure due to high domestic production and inventory levels, with new production capacity exceeding 2.4 million tons expected in the second half of 2025 [5][6]. - Domestic pure benzene imports reached 2.3756 million tons by May 2025, a 62.6% increase year-on-year, primarily driven by reduced demand from the U.S. and a shift in export focus from South Korea to China [5][6]. - The downstream demand for pure benzene is expected to weaken, particularly due to declining profits in styrene and other downstream products, which may limit the support for pure benzene prices [5][10][11]. Oil Market Impact - The oil market is anticipated to experience a downward shift in price levels in the second half of 2025, influenced by OPEC+ production increases and geopolitical factors affecting supply [3]. - Concerns over U.S.-China tariff disputes and potential economic downturns in the U.S. may further weaken global oil demand, impacting the pricing dynamics of pure benzene and its derivatives [3]. Trading Strategies - The trading strategy for pure benzene futures suggests a bearish outlook due to significant supply-demand pressures and a slight premium of the futures price over the spot price [2][13]. - The market is expected to exhibit a Contango structure, indicating potential opportunities for cross-period arbitrage [2][13]. - The price spread between styrene and pure benzene is anticipated to narrow, reflecting the weakening profit margins in the styrene market [2][11].

Investment Rating - The report maintains a "Buy" rating for key companies in the chemical industry, specifically recommending Shengquan Group, Hailide, and Zhuoyue New Energy [4]. Core Insights - The report emphasizes the importance of identifying companies with strong performance in the first half of the year, particularly those expected to exceed earnings forecasts in Q2 2025. It highlights Shengquan Group's role as a major domestic supplier of electronic resins for AI servers, benefiting from increasing server shipments. Hailide is noted for its leadership in the polyester industrial yarn sector, which is expected to benefit from U.S. tariff conflicts. Zhuoyue New Energy is recognized for its capacity growth and new product launches, which are anticipated to elevate its performance [1][2][3]. Summary by Sections Chemical Industry Overview - The chemical sector index closed at 3518.55 points, up 0.80% from the previous week, underperforming the CSI 300 index by 0.74% [10]. - Among 462 stocks in the chemical sector, 53% saw weekly gains, while 45% experienced declines [17]. Key Chemical Products - Liquid chlorine, butanone, TDI, and epoxy chloropropane saw significant price increases, with liquid chlorine rising by 21% [20][21]. - Conversely, methanol and pure MDI prices fell by 11% and 9%, respectively [22]. Fertilizer Sector - The report indicates a favorable export window for phosphate fertilizers, with exports expected to peak between May and September 2025, potentially alleviating domestic overcapacity issues [2]. Safety and Regulatory Environment - Increased scrutiny on chemical safety following recent accidents is expected to elevate the overall demand for pesticides, as non-compliant production capacities may be phased out [3]. Company Performance Forecasts - Shengquan Group's EPS is projected to rise from 1.03 CNY in 2024 to 2.13 CNY in 2026, with a PE ratio decreasing from 28 to 13 [4]. - Hailide's EPS is expected to increase from 0.35 CNY in 2024 to 0.41 CNY in 2026, with a PE ratio of 15 [4]. - Zhuoyue New Energy's EPS is forecasted to grow from 1.24 CNY in 2024 to 4.80 CNY in 2026, with a PE ratio dropping from 38 to 10 [4].

Industry Investment Rating - The industry investment rating is "Outperform" and is maintained [2] Core Views - The report highlights the need to prevent disorderly competition and encourages companies to enhance product quality while promoting the orderly exit of outdated production capacity. Focus areas include silicon materials, coal chemical, and chlor-alkali chemical sectors, with price increases expected in potassium fertilizers, phosphorus fertilizers, active dyes, and pesticides [5][6] Summary by Sections Industry Overview - The closing index for the industry is at 3518.55, with a 52-week high of 3564.08 and a low of 2687.54 [2] - The basic chemical sector experienced a weekly change of +0.80%, underperforming the CSI 300 index, which had a weekly change of +1.54% [6][19] Stock Performance - Notable stock price increases include: - Kaimete Gas: +27.46% - Kete Biology: +21.90% - Jiuri New Materials: +21.01% [7][20] - Significant stock price decreases include: - Tiansheng New Materials: -15.80% - Jinji Co.: -15.34% - Xinyaqiang: -14.41% [8][21] Commodity Price Movements - Key commodities with price increases include: - Dichloropropane-white material: +8.82% - Isobutyraldehyde: +7.20% - TDI: +7.02% [9][23] - Key commodities with price decreases include: - Liquid chlorine: -86.51% - Chick seedlings: -47.31% - Meta-cresol: -9.09% [10][26] Investment Recommendations - The report suggests focusing on opportunities in silicon materials, coal chemical, and chlor-alkali chemical sectors while monitoring price trends in fertilizers and pesticides [5][6]

Investment Rating - The report maintains an "Outperform" rating for the basic chemical industry [2]. Core Viewpoints - The basic chemical sector has lagged behind the broader market, with a weekly increase of +0.8% compared to +1.4% for the Shanghai Composite Index and +1.5% for the ChiNext Index. Year-to-date, the basic chemical industry index has increased by +7.3%, outperforming both indices by 3.7% and 6.6% respectively [7][19]. - Recent government policies are aimed at addressing excessive competition and promoting structural improvements in the industry. The focus is on enhancing product quality and facilitating the exit of outdated production capacity [7][8]. - The report identifies five key investment themes within the chemical sector, including battery materials, industrial silicon and organic silicon, polyester filament, polyester bottle chips, and sucralose, highlighting the potential for structural improvements and demand recovery [7][8]. Summary by Sections 1. Core Viewpoints - The report emphasizes that the basic chemical industry is entering a phase of structural improvement due to government policies aimed at reducing excessive competition and promoting quality [7][8]. - It suggests that the industry is likely to experience a new long-term growth cycle, driven by improved supply-demand dynamics and the exit of outdated production capacity [16][17]. 2. Overall Performance of the Chemical Sector - The basic chemical industry index has shown a weekly increase of +0.8%, ranking 16th among 31 sectors, while year-to-date performance is +7.3%, indicating a recovery trend [19]. 3. Individual Stock Performance in the Chemical Sector - Among 424 stocks in the basic chemical sector, 224 stocks rose while 194 fell. The top performers included companies like 凯美特气 (+27.5%) and 科拓生物 (+21.9%) [28][29]. 4. Key News and Company Announcements - The report highlights the central government's focus on addressing low-price competition and promoting quality improvements in the chemical industry, which is expected to lead to a more orderly competitive environment [7][8]. 5. Product Price and Price Spread Analysis - The report provides insights into the price movements of various chemical products, indicating significant fluctuations in prices, with some products experiencing notable increases while others faced declines [7][8].

Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [6] Core Insights - The central government has reiterated the need to combat "involution" in the industry, particularly in the photovoltaic sector, aiming to optimize the market structure and eliminate low-efficiency production [1][22][23] - The photovoltaic industry has experienced a surge in installed capacity due to a "rush to install" phenomenon, with a significant increase in new installations expected to taper off in the latter half of the year [2][24] - Industrial silicon prices have shown a downward trend but have recently seen a slight recovery due to production cuts in major factories [3][25][26] - The organic silicon market has faced price fluctuations, with limited new capacity expected in the future, indicating potential stabilization [4][31][34] Summary by Sections 1. Industry Overview - The central government emphasizes the need for market mechanisms to phase out inefficient capacities and prevent price wars in the photovoltaic sector [1][22] - The photovoltaic industry has seen a cumulative installed capacity exceeding 1.08 billion kilowatts, accounting for 30% of China's total power generation capacity [2][24] 2. Price Trends - As of July 4, 2025, industrial silicon prices are at 0.90 million yuan per ton, down 21.9% year-to-date but have recently increased from a low of 0.85 million yuan per ton [3][25] - The average price of organic silicon is 1.08 million yuan per ton, reflecting a 16.9% decrease since the beginning of the year [4][31] 3. Investment Recommendations - Suggested investments include upstream oil and gas companies, leading chemical firms, and new materials related to semiconductors, OLEDs, wind power, and lithium batteries [5]

Investment Rating - The report rates the chemical industry as "Outperform" [2] Core Views - The industry has been significantly impacted by tariff-related policies and fluctuations in crude oil prices this year. Key areas to focus on in July include safety regulations, supply changes in the pesticide and intermediate sectors, performance fluctuations due to "export rush," the importance of self-sufficiency in electronic materials, and stable dividend policies in energy companies [2][12] Summary by Sections Industry Dynamics - In the week of June 30 to July 6, among 100 tracked chemical products, 25 saw price increases, 56 saw declines, and 19 remained stable. The average price of TDI increased by 7.02% week-on-week, while the average price of acrylic acid rose by 3.65% [11][36] Investment Recommendations - The report suggests focusing on safety regulations and supply changes affecting the pesticide and intermediate sectors, performance fluctuations from the first half of the year, the growing importance of self-sufficiency in electronic materials, and stable dividend policies in energy companies. Long-term investment themes include sustained high crude oil prices benefiting the oil and gas extraction sector, rapid development in downstream industries, and policy support for demand recovery [12][19] Key Products and Price Changes - TDI prices increased to 12,013 CNY/ton, while acrylic acid prices reached 7,100 CNY/ton, reflecting a 14.52% year-on-year increase. The average price of crude oil also saw slight increases, with WTI at 66.50 USD/barrel and Brent at 68.30 USD/barrel [11][35][36] Company Highlights - Satellite Chemical and Anji Technology are highlighted as "gold stocks" for July, with both companies showing strong revenue and profit growth in 2024. Satellite Chemical reported a revenue of 45.648 billion CNY, a 10.03% increase year-on-year, while Anji Technology achieved a revenue of 1.835 billion CNY, a 48.24% increase year-on-year [13][19]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The prices of bio-jet fuel (SAF), refrigerants, and polysilicon have increased, while prices for carbon black, vitamin E, and others have declined [1][5][12] - The demand for lightweight and high-performance materials is expected to rise due to advancements in robotics and the low-altitude economy [5][24] - The biofuel sector, particularly bio-jet fuel and biodiesel, is gaining attention as renewable green energy sources [5][43] Summary by Sections 1. Key Sub-industry and Product Tracking - Bio-jet fuel (SAF) price reached $2240 per ton, up 0.45% week-on-week and 20.82% year-to-date; biodiesel price stable at 8100 CNY per ton, up 8% year-to-date; polysilicon price at 36420 CNY per ton, up 8.17% week-on-week [3][9][45] - Refrigerant prices remain high, with R32 at 53000 CNY per ton (up 0.95%) and R134a at 49500 CNY per ton (up 1.02%); significant profit improvement compared to last year [4][10] - Prices for carbon black, fluorite, caprolactam, and vitamin E have decreased, with carbon black at 6720 CNY per ton (down 2.34%) [4][10] 2. Electronic Chemicals - The electronic chemicals sector is characterized by a wide variety of specialized products, high technical barriers, and rapid technological advancements [12][20] - The semiconductor materials market is projected to grow, with a forecasted revenue of $67.5 billion by 2024, driven by demand from 5G, AI, and consumer electronics [17][20] 3. New Quality Productivity - Carbon fiber and ultra-high molecular weight polyethylene (UHMWPE) are highlighted as key materials benefiting from the low-altitude economy and robotics [24][28] - PEEK material is increasingly used in humanoid robots, with demand growing significantly [29] 4. Lithium Battery/Storage Materials - Conductive agents like carbon black and carbon nanotubes are essential for lithium battery materials, with current market prices showing a downward trend [32][34] - Sodium-ion battery materials are gaining traction due to their cost advantages and resource availability [35] 5. Renewable and Modified Plastics - The market for recycled plastics is expanding, driven by environmental concerns and increasing recycling rates [46] - Special engineering plastics are in demand across various industries, including automotive and aerospace [46] 6. Coatings, Inks, and Pigments - The demand for new functional coating materials is rising due to growth in the automotive and consumer electronics sectors [54][56] 7. Market Performance - The chemical industry showed mixed performance, with the basic chemical index up 0.36% week-on-week, while the overall market remains generally stable [57][58]

Core Viewpoint - The article emphasizes the urgency of domestic substitution for "choke point" technologies in various industries due to escalating Sino-US trade tensions and the need for self-sufficiency in critical sectors [2][3]. Group 1: Research Framework & Key Industries - A comprehensive research framework is established, focusing on ten key industries: electronics, computers, communications, pharmaceuticals, medical, automotive, machinery, military, metals, and chemicals [3]. - The framework combines top-down and bottom-up approaches to assess the current state, challenges, and prospects of domestic substitution in these industries [3]. Group 2: Key Areas of Domestic Substitution - The report identifies 41 categories of critical technologies for domestic substitution across the ten industries, highlighting the importance of these areas for attracting investment [2][3]. - The analysis categorizes the difficulty of domestic substitution into five levels, ranging from extremely difficult to easy, based on factors such as market share and technological barriers [8][11]. Group 3: Electronics Industry - The semiconductor sector is highlighted as a key area for domestic substitution, with a focus on storage chips, CPUs, and GPUs, where current domestic market shares are below 5% [11][14]. - The article notes that the government is expected to increase support for key technologies in the semiconductor industry, particularly in overcoming manufacturing and equipment limitations [14][15]. Group 4: Computer Industry - The article discusses the development of a self-controlled IT ecosystem driven by policies aimed at enhancing domestic capabilities in hardware and software [19][20]. - The industrial software market is identified as a significant area for growth, with domestic companies gradually making inroads in CAD, EDA, and other software segments [20][21]. Group 5: Communication Industry - The communication equipment sector has seen significant domestic market penetration, with leading companies like Huawei and ZTE holding substantial global market shares [26][28]. - The report emphasizes the potential for domestic substitution in core communication chips, particularly in the FPGA market, which is currently dominated by foreign firms [27][31]. Group 6: Pharmaceutical and Medical Industries - The scientific instruments sector is highlighted for its low domestic substitution rates, with significant opportunities for growth driven by supportive policies [33][34]. - The article points out the challenges in the production of borosilicate glass for pharmaceuticals, indicating a need for technological advancements to reduce reliance on imports [38][40].