Core Viewpoint - The announcement by the National Development and Reform Commission and the State Administration for Market Regulation aims to address chaotic price competition in key industries, providing a framework for reasonable pricing based on average costs and market conditions [1][2] Event Summary - On October 9, 2025, the National Development and Reform Commission and the State Administration for Market Regulation issued a notice to combat price chaos, emphasizing fair and lawful pricing practices based on production costs and market supply-demand dynamics [2][3] Event Analysis - The policy continues the "anti-involution" approach initiated earlier in 2025, focusing on curbing disorderly low-price competition and reinforcing supply-side management across various sectors, including cement, steel, and coal [3][4] - The announcement is a continuation of previous policies aimed at regulating low-price competition, enhancing market confidence, and facilitating the implementation of sector-specific policies [3][4] Supply-Side Management - Strong supply-side controls are expected to lead to significant changes in traditional cyclical industries, particularly in the chemical sector, which is characterized by cyclical pressures and supply-demand mismatches [4][5] - If effective supply-side constraints are established, it could fundamentally improve the long-term supply trends of cyclical products, allowing for extended profitability [4][5] Industry Collaboration - Certain industries are beginning to collaborate to improve profitability ahead of stringent supply-side constraints, with initial efforts to control production and pricing already underway [5][6] - The policy is likely to foster further collaboration among industries that have already started self-regulating against low-price competition, particularly in sectors with strong market concentration and manageable new capacity [5][6] Investment Recommendations - The announcement is seen as a continuation of previous policies, with a focus on energy consumption, approvals, environmental protection, and safety in the chemical industry [6] - Key areas for monitoring include supply-side management in petrochemical and coal chemical sectors, as well as industries with steep cost curves or significant process cost differences [6]