Core Viewpoint - The chemical industry is experiencing weak price differentials, with a gradual recovery in the midstream sector. The overall demand remains weak, leading to a notable "off-season" characteristic in the industry [1] Group 1: Industry Performance - As of September, the CCPI-raw material price differential stands at 2439, which is below the 30th percentile since 2012, indicating weak pricing across most chemical products [1] - The products that saw price increases in September were primarily those with reduced supply and better overseas demand [1] Group 2: Profitability and Future Outlook - The industry has reached a profitability bottom in recent years, and with policy guidance aimed at reducing internal competition, supply-side adjustments are expected to accelerate, potentially improving profitability for bulk chemical products [1] - In the medium to long term, the exit of high-energy-consuming facilities in Europe and North America, along with economic growth in Asia, Africa, and Latin America, will drive demand increases, making exports a significant growth engine for the domestic chemical industry [1] - Since June 2025, the growth rate of capital expenditure in the industry has been declining, but with accelerated supply-side adjustments, the industry is expected to see an upturn in 2026 [1]

Group 1 - The overall price spread in the industry remains weak as of September, with the CCPI-raw material price spread at 2439, which is below the 30th percentile since 2012, indicating a significant impact from weak downstream demand [1] - The "peak season not peaking" characteristic is evident, with most chemical products showing relatively weak price performance; price increases in September were mainly due to supply-side reductions and strong overseas demand [1] - The industry is believed to be at the bottom of profitability, and with policy guidance to reduce internal competition, supply-side adjustments are expected to accelerate, potentially improving profitability for bulk chemical products [1] Group 2 - In the medium to long term, the exit of high-energy-consuming facilities in Europe and the U.S., along with economic growth in Asia, Africa, and Latin America, will drive demand increases, making exports a significant growth engine for the domestic chemical industry [1] - Capital expenditure growth in the industry has been declining since June 2025, and with accelerated supply-side adjustments, the industry is expected to see improved conditions in 2026 [1]

Core Viewpoint - The overall price spread in the industry remains weak as of September, with a gradual recovery in the midstream sector. The CCPI-raw material price spread is at 2439, below the 30th percentile since 2012, indicating weak downstream demand and a notable "off-peak" characteristic in the industry [1] Group 1: Industry Performance - The chemical product prices continue to show relative weakness, primarily due to weak overall downstream demand [1] - Price increases in September were mainly driven by supply-side reductions and strong overseas demand for certain products [1] Group 2: Future Outlook - The industry is believed to be at the bottom of its profitability cycle, with potential improvements expected due to supply-side adjustments under policies aimed at reducing competition [1] - Medium to long-term growth is anticipated from the exit of high-energy-consuming facilities in Europe and the U.S., along with economic growth in Asia, Africa, and Latin America, making exports a significant growth engine for the domestic chemical industry [1] - Capital expenditure growth in the industry has been declining since June 2025, and with accelerated supply-side adjustments, an upturn in industry prosperity is expected in 2026 [1]

Core Viewpoint - The overall price spread in the industry remains weak as of September, with a gradual recovery in the midstream sector. The CCPI-raw material price spread at the end of September 2025 is 2439, which is below the 30th percentile since 2012, indicating a significant impact from weak downstream demand and a clear "off-peak" characteristic in the industry [1]. Group 1: Industry Performance - The chemical product prices continue to show relative weakness, primarily due to the overall weak downstream demand [1]. - The products that saw price increases in September were mainly those with reduced supply and better overseas demand [1]. Group 2: Profitability and Future Outlook - The industry has likely reached a profitability bottom in recent years, and with policy guidance to reduce internal competition, supply-side adjustments are expected to accelerate, potentially improving profitability for bulk chemical products [1]. - In the medium to long term, the exit of high-energy-consuming facilities in Europe and the U.S., along with economic growth in Asia, Africa, and Latin America, will drive demand increases, making exports a significant growth engine for the domestic chemical industry [1]. - Since June 2025, the growth rate of capital expenditure in the industry has been declining, and with accelerated supply-side adjustments, the industry is expected to see an upturn in 2026 [1].

Investment Rating - The report maintains an "Overweight" rating for the oil and gas sector and the basic chemicals sector [6]. Core Views - The industry is experiencing a "weak peak season" in September, with overall demand remaining subdued and capital expenditure in the chemical sector continuing to decline, indicating a potential turning point in supply and demand dynamics [14][22]. - The CCPI-raw material price spread as of the end of September 2025 is at 2439, which is below the 30th percentile since 2012, reflecting weak pricing across most chemical products [2][14]. - The report anticipates an upward trend in industry conditions for 2026, driven by supply-side adjustments and demand recovery, particularly in the context of high energy-consuming facilities exiting the market in Europe and North America [2][40]. Summary by Sections Demand Side - The PMI for September 2025 is reported at 49.8, indicating that traditional peak season demand is not being met, with slow recovery expected in the short term [3][17]. - The real estate sector continues to show negative growth, impacting overall demand, while consumer goods and infrastructure sectors are expected to drive future demand for chemical products [17][20]. Supply Side - From January to August 2025, the capital expenditure in the chemical raw materials and products sector has decreased by 5.2% year-on-year, suggesting a tightening supply side and a potential turning point approaching [3][22]. - The report highlights that the competitive landscape has intensified, leading to a significant decline in profitability across many sub-sectors since the second half of 2022 [3][22]. Price Trends - Some chemical products have seen price increases due to overseas demand and domestic maintenance activities, while others have declined due to weak demand and reduced supply-side coordination [4][41]. - The report identifies key products with price increases, including methyltrichlorosilane and glyphosate, while products like sucrose and vitamins have seen price declines [4][41]. Investment Strategy - The report suggests focusing on sectors with improving supply dynamics and new technology-driven products, with recommendations for specific companies such as China Petroleum, Juhua Co., and Dongyue Group [5][40]. - It emphasizes the importance of export-driven growth for domestic chemical products, which maintain competitive advantages in cost and quality [20][40].

Group 1 - The latest survey by the German research institute ifo indicates a significant deterioration in the business climate of the German chemical industry in July compared to June [1] - Weak industrial economy is suppressing both domestic and international demand for chemical products in Germany [1] - The current order backlog in the German chemical industry has dropped to its lowest level since the 2009 financial crisis, leading companies to plan further layoffs [1] Group 2 - The ifo business climate index for the German chemical industry fell from -9.5 in June to -19.2 in July [1] - German chemical giants Henkel and SGL Carbon have lowered their sales forecasts for 2025, with Henkel now expecting a sales growth of 1.0% to 2.0%, down from a previous forecast of 1.5% to 3.5% [1] - SGL Carbon anticipates a 10% to 15% decline in sales for 2025 compared to 2024, revising its previous expectation of a 10% decline [1] Group 3 - The German Chemical Industry Association (VCI) projects a 2.0% decrease in chemical production (excluding pharmaceuticals) in Germany for 2025 [1]

Group 1 - The stock price of Boyuan Chemical closed at 5.73 yuan on August 6, remaining unchanged from the previous trading day. The opening price was 5.70 yuan, with a high of 5.79 yuan and a low of 5.65 yuan. The trading volume was 428,327 hands, and the transaction amount reached 245 million yuan [1] - Boyuan Chemical's main business is the production of chemical raw materials, with key products including soda ash and sodium bicarbonate. The company announced on its investor interaction platform that the second phase of the Alashan natural soda project is scheduled to be completed and trial production to begin by the end of the year, and the project is progressing as planned. This project's progress will directly impact the company's future capacity expansion plans [1] - On August 6, the net outflow of main funds was 5.9698 million yuan, with a cumulative net outflow of 165 million yuan over the past five trading days. The current stock price is situated between the five-day and twenty-day moving averages, indicating a shrinking trading activity in the market [1]

Core Viewpoint - Wanhua Chemical's stock price decreased by 1.02% to 61.96 yuan as of July 29, 2025, with a trading volume of 307,875 hands and a transaction amount of 1.914 billion yuan [1] Group 1: Company Performance - Wanhua Chemical's main business includes polyurethane, petrochemicals, fine chemicals, and new materials, making it a global leader in MDI manufacturing, with applications in home appliances, automotive, and construction sectors [1] - In Q1 2025, the company achieved a revenue of 43.068 billion yuan and a net profit of 3.082 billion yuan [1] Group 2: Production Updates - On July 29, 2025, Wanhua Chemical announced the resumption of normal production at its Fujian Industrial Park, which includes an 800,000 tons/year MDI unit, a 360,000 tons/year TDI unit, and a 400,000 tons/year PVC unit, after maintenance that began on June 5 [1] Group 3: Financial Metrics - The company's current price-to-earnings ratio is 15.73 times, and the price-to-book ratio is 2.02 times [1] - On the same day, the net outflow of main funds was 98.3764 million yuan [1]

Group 1 - The chemical sector experienced a collective rebound on July 1, with Hongbaoli leading the surge by hitting the daily limit up [1] - Other stocks such as Shandong Heda, Changqing Technology, and Baihehua also reached the daily limit up, indicating strong market interest in the sector [1] - Hongbaoli's trading volume reached 240 million yuan, with a turnover rate of 3.57%, highlighting its active trading status [1] Group 2 - The chemical industry is a fundamental sector of the national economy, with products widely used in construction, automotive, and electronics [2] - The performance of the chemical sector is closely linked to macroeconomic trends, reflecting the industry's sensitivity to economic conditions [2]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The 2025 Indian potash fertilizer contract price has been set at $349 per ton, which is expected to boost the potash fertilizer market [4][20] - The domestic potassium chloride market is experiencing limited supply and tight circulation, with domestic potassium chloride production reduced and inventory at low levels [21][22] Summary by Sections Industry Trends - The chemical industry index outperformed the CSI 300 index by 1.73% this week [15] - The CCPI (China Chemical Product Price Index) reported 4033 points, down 1.08% from last week [17] Key Product Tracking - The price difference for polyester filament POY has expanded, while the price of chlorantraniliprole 97% continues to rise [29] - The domestic potassium chloride market is characterized by limited supply and cautious purchasing behavior from downstream buyers [21][22] Recommended and Beneficiary Stocks - Recommended stocks include Salt Lake Co., and Yaqi International; beneficiary stocks include Cangge Mining and Dongfang Iron Tower [27] - Other recommended stocks span various sectors including chemical leaders and fluorine chemicals [5]