Summary of the Petrochemical and Chemical Industry Conference Call Industry Overview - The petrochemical and chemical industry has shown strong performance since January, with many stocks experiencing significant gains, confirming previous expectations of industry recovery in 2023 [2] - The outlook for February remains positive, with expectations of continued upward momentum in the industry [2] Key Points by Sector Oil and Gas Sector - International oil prices have risen over 10% since January, driven by factors such as extreme cold weather in the U.S., production halts in Kazakhstan, and tensions in the Middle East [2] - February is expected to see strong oil prices, with a reduction in the degree of supply surplus providing bottom support [2] Refining and Chemical Sector - The refining and chemical sector is projected to perform well in the long term, with domestic refining capacity nearing its ceiling due to government restrictions on new capacity [3][11] - The exit of some ethylene refining capacity in Japan, South Korea, and Europe has enhanced China's global competitiveness [3] - The aromatics industry has shown significant recovery, and the ethylene chain is expected to rebound [3] Potash Fertilizer Market - The potash fertilizer market is viewed positively, with prices stable at approximately 3,300 RMB/ton, reflecting a 50 RMB increase since the beginning of the year [4] - Spring farming demand is expected to drive both demand and prices upward, with a potential supply gap anticipated [5] - Recommended investment in Yara International, which is expected to benefit from rising potash prices in 2026 and 2027 [5] Phosphate Chemical Sector - The phosphate chemical sector is driven by increasing demand for new energy materials, with a re-evaluation of the energy value of phosphate rock [6] - Supply constraints and the scarcity of resources are expected to maintain a tight balance in supply and demand over the next two years [6] Polyester Sector - The polyester supply-demand situation is optimistic, with moderate domestic consumption growth and increased exports [7] - As of February 5, the weekly operating rate for polyester filament was 74.6%, indicating strong demand potential [7] Dye Industry - Dye prices have been rising, particularly due to increases in intermediate prices, with disperse dyes seeing significant price hikes [8][9] - Companies like Longsheng and Runtu, which have production advantages, are expected to benefit from these trends [9] Sulfur Market - Sulfur prices have increased by 60% since October, currently around 4,000 RMB, benefiting large refineries due to fixed costs and tight supply [14] Fluorochemical Sector - The fluorochemical sector is recommended for refrigerants and fluorinated polymers, with strong demand from the global air conditioning and automotive markets [15] - Companies like Juhua, Sanmei, and Dongyue Group are highlighted as key players in the refrigerant market [15] Additional Insights - The refining sector is facing structural changes in product demand, with a shift towards chemical products due to the gradual decrease in fuel demand [12] - The sustainable aviation fuel (SAF) market is identified as a new growth point in emerging markets [12] - The aromatics sector, particularly paraxylene (PX), is experiencing a price increase due to tight supply and steady demand growth of 4%-5% annually [13] This summary encapsulates the key insights and trends discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the petrochemical and chemical industry.

Core Insights - The report by the Methanol Institute (MI) indicates that Methanol-to-Jet (MtJ) is expected to become a major contributor to Sustainable Aviation Fuel (SAF) [1] - Global jet fuel demand is projected to increase by 50% by 2050, highlighting a growing gap between climate goals and the supply of low-cost low-carbon fuels [1] - Existing SAF production pathways are insufficient to meet total demand, while MtJ offers superior emissions performance, scalability, and cost advantages [1] Industry Overview - The global methanol industry currently has an annual production capacity exceeding 100 million tons, with renewable and low-carbon methanol capacity rapidly expanding [1] - The CEO of MI, Alexander Dorr, states that the core challenge for the aviation industry has shifted from validating SAF feasibility to rapidly scaling up production [1] - Clear market signals and policy direction in the coming years will be crucial for the development speed of MtJ [1] Environmental Impact - Renewable methanol-based MtJ can reduce lifecycle greenhouse gas emissions by 70% to 90% compared to traditional jet fuel [1] - MtJ is expected to achieve cost competitiveness with fossil jet fuel by 2040, given policy support [1] Future Projections - By 2026, MtJ is anticipated to achieve commercial aviation application, with efforts underway for ASTM international standard certification [1] - As of August 2025, the planned annual capacity for MtJ projects under construction is approximately 1.8 million tons, with over 60 million tons of renewable and low-carbon methanol capacity planned globally by 2030 [2] - China accounts for half of the global project total, followed by Europe and North America [2]

Core Viewpoint - The merger between China Petroleum & Chemical Corporation (Sinopec) and China Aviation Oil Group aims to enhance national aviation energy supply security, promote green and low-carbon transformation in aviation energy supply, and establish a world-class aviation energy supplier [1][2]. Group 1: Company Overview - Sinopec is the largest refined oil and petrochemical product supplier in China, the world's largest refining company, and the second-largest chemical company, with a comprehensive energy industry chain [2]. - China Aviation Oil is the largest integrated aviation fuel service provider in Asia, involved in procurement, transportation, storage, testing, sales, and refueling of aviation fuel [2]. Group 2: Market Potential - The demand for aviation kerosene in China is projected to reach approximately 50 million tons by 2030, with an average annual growth rate of around 4% during the 14th Five-Year Plan period [2]. - According to S&P forecasts, China's aviation fuel consumption is expected to grow to 75 million tons by 2040 [2]. Group 3: Synergies and Competitive Position - The merger is expected to create significant synergies by leveraging integrated refining and aviation fuel supply systems, reducing intermediate links, and lowering supply costs [3]. - Currently, China's aviation fuel production, sales, and refueling operations are fragmented across different companies, which limits overall competitiveness compared to international integrated oil and gas companies [3]. Group 4: Green Transformation - The merger will facilitate the high-quality development of sustainable aviation fuel (SAF) industry, with Sinopec being the first in Asia to have independent R&D and commercial production of bio-jet fuel [3]. - China Aviation Oil plays a crucial role in the promotion and ecological construction of SAF, and the merger will enhance collaboration in this area [3]. Group 5: Strategic Context - This merger marks the first central enterprise-level restructuring case entering the 14th Five-Year Plan, aligning with the government's push for strategic and professional mergers and acquisitions [4]. - The State-owned Assets Supervision and Administration Commission (SASAC) emphasizes the importance of integrating key technologies, market channels, and strategic resources through mergers [4].

Core Viewpoint - The demand for biodiesel is primarily driven by policy, with 2025 marking a significant growth year for Sustainable Aviation Fuel (SAF) globally, supported by various countries' blending policies and regulatory frameworks [1] Policy Adaptation and Export Competitiveness - The EU's final ruling on anti-dumping duties on biodiesel from China will impose tariffs ranging from 10% to 35.6%, but SAF is exempt, creating a favorable trade environment for Chinese SAF exports [2] - The UK will implement mandatory SAF blending obligations starting in 2025, beginning at 2% and increasing to 10% by 2030 and 22% by 2040, further enhancing the market for SAF [2] - A complete regulatory framework for SAF exports has been established in China, facilitating international trade [2] - The company has been included in the SAF export whitelist, enhancing its export capabilities and compliance advantages [2] Market Expansion and Customer Diversification - The company is executing long-term contracts with European clients and expanding its market presence in Asia-Pacific, including Japan and Australia, to diversify its customer base [3] - The company has successfully fulfilled contracts with non-EU clients, demonstrating its adaptability in the market [3] Domestic Market Development and Industry Collaboration - The company is involved in a closed-loop application pilot project for biodiesel in Haidian District, Beijing, establishing a domestic sales foundation [4] - Strategic partnerships have been formed with key stakeholders, including the China Aviation Oil Group, to enhance SAF sales and financing opportunities [4] - The company has begun supplying bio-jet fuel to multiple airports in China, marking significant progress in domestic SAF application [4] Capacity Expansion and Performance Improvement - The company launched a 200,000 tons/year biodiesel isomerization project, marking a key breakthrough in SAF capacity [5] - The company has increased its biodiesel production capacity significantly, with new production records being set [8] - The company achieved a revenue of 958 million yuan in Q3 2025, a year-on-year increase of 63.82%, and reported a net profit of 93.33 million yuan for the quarter, indicating a strong performance turnaround [9]

Report Overview - Date: November 25, 2025 - Report Type: Commodity Research Morning Report - Agricultural Products by Guotai Junan Futures 1. Investment Ratings for Different Commodities - Palm Oil: Temporarily treated as weak due to doubts about产地去库存 [2][4] - Soybean Oil: Expected to trade in a range, with a strategy to expand the spread between soybean oil and palm oil [2][4] - Soybean Meal: Expected to trade sideways [2][10] - Soybean No. 1: Expected to trade sideways [2][10] - Corn: Expected to be slightly bullish [2][13] - Sugar: Expected to trade in a narrow range [2][17] - Cotton: Near - term contracts expected to outperform forward contracts [2][21] - Peanut: Attention should be paid to the spot market [2][28] 2. Core Views - The report provides a comprehensive analysis of multiple agricultural commodities, including their current market conditions, price trends, and relevant industry news, to help investors make informed decisions regarding agricultural futures investments [2][5][10] 3. Summary by Commodity Palm Oil - **Fundamentals**: The closing price of the palm oil主力 contract was 8,486 yuan/ton during the day session, down 0.75%, and 8,454 yuan/ton during the night session, down 0.38%. Trading volume decreased by 114,593 hands, and open interest decreased by 24,130 hands. The spot price in Guangdong was 8,430 yuan/ton, down 40 yuan [5] - **News**: Malaysia's use of palm - derived raw materials to produce sustainable aviation fuel (SAF) has not raised negative concerns among European buyers as it meets sustainability standards. The ministry plans to implement a 1% SAF mandatory blending standard for international flights departing from Kuala Lumpur International Airport [6] - **Trend Strength**: 0 (neutral) [9] Soybean Oil - **Fundamentals**: The closing price of the soybean oil主力 contract was 8,168 yuan/ton during the day session, down 0.27%, and 8,174 yuan/ton during the night session, up 0.07%. Trading volume decreased by 120,156 hands, and open interest decreased by 7,040 hands. The spot price in Guangdong was 8,540 yuan/ton, up 20 yuan [5] - **Trend Strength**: 0 (neutral) [9] Soybean Meal and Soybean No. 1 - **Fundamentals**: For DCE豆一2601, the closing price was 4,150 yuan/ton during the day session, up 1.05%, and 4,132 yuan/ton during the night session, down 0.17%. For DCE豆粕2601, the closing price was 3,011 yuan/ton during the day session, down 0.20%, and 3,014 yuan/ton during the night session, up 0.30%. Spot prices in different regions remained mostly stable [10] - **News**: On November 24, CBOT soybean futures closed mixed. Traders were waiting for signs of China's further purchases of US soybeans and details of the latest call between Washington and Beijing. China bought 158.4 million tons of US soybeans last week, and an additional 123,000 tons were sold on Monday. As of November 21, Brazil's 2025/26 soybean sowing was 81% complete, 5 percentage points slower than the same period last year [10][12] - **Trend Strength**: 0 (neutral) for both soybean meal and soybean No. 1 [12] Corn - **Fundamentals**: The northeast acquisition average price was unchanged, while the Jinzhou closing price was 2,220 yuan/ton, up 30 yuan. The Guangdong Shekou price was 2,380 yuan/ton, up 20 yuan. The closing price of C2601 was 2,220 yuan/ton during the day session, up 1.69%, and 2,231 yuan/ton during the night session, up 0.50% [14] - **News**: Northern corn bulk shipping port prices increased by 30 yuan/ton, and container - shipped first - class grain prices increased by 50 yuan/ton. Guangdong Shekou bulk and container prices increased by 20 yuan/ton [15] - **Trend Strength**: 0 (neutral) [16] Sugar - **Fundamentals**: The raw sugar price was 14.85 cents/pound, the mainstream spot price was 5,650 yuan/ton, and the futures主力 price was 5,370 yuan/ton [17] - **News**: In the 25/26 sugar - crushing season, India's sugar export quota is 1.5 million tons. Brazil's sugar production in the first half of October increased by 1% year - on - year, and exports were 4.2 million tons, up 13% year - on - year. China imported 750,000 tons of sugar in October, an increase of 210,000 tons [17] - **Trend Strength**: 0 (neutral) [20] Cotton - **Fundamentals**: The closing price of CF2601 was 13,585 yuan/ton during the day session, up 0.93%, and 13,620 yuan/ton during the night session, up 0.26%. Spot prices in different regions showed small changes [21] - **News**: Cotton spot trading was stable, with spinning mills mainly making rigid - demand purchases. Pure - cotton yarn prices were generally stable, and market sales were sluggish [22] - **Trend Strength**: 0 (neutral) [26] Peanut - **Fundamentals**: The price of Liaoning 308 common peanuts was 9,900 yuan/ton, up 600 yuan. The closing price of PK601 was 7,794 yuan/ton, up 0.15% [28] - **News**: In different regions such as Henan, Jilin, and Liaoning, peanut prices were generally strong, with varying degrees of supply and demand situations [29] - **Trend Strength**: 0 (neutral) [30]

Investment Rating - The report maintains a "Positive" investment rating for the environmental sector, consistent with the previous rating [2]. Core Insights - The sustainable aviation fuel (SAF) market is experiencing significant growth driven by EU demand, with SAF prices rising continuously since mid-2025. As of November 15, 2025, European SAF FOB prices reached $2900-2920 per ton, marking a 58% increase since the beginning of the year, while domestic prices rose to $2450-2650 per ton, a 45% increase [4][37]. - The SAF industry is characterized by strong policy-driven demand, with the International Air Transport Association (IATA) predicting that global SAF demand will reach 350 million tons by 2050, supported by various government incentives and regulations [4][19]. Summary by Sections Market Performance - As of November 14, 2025, the environmental sector declined by 0.09%, outperforming the broader market, which saw a 0.18% drop in the Shanghai Composite Index [4][11]. Industry Dynamics - Recent government initiatives include the release of guidelines to enhance renewable energy consumption and optimize system regulation, promoting the integrated development of green fuels [4][47]. - The report highlights the significant role of SAF in reducing carbon emissions in the aviation sector, with potential reductions of up to 85% compared to traditional fuels [4][19]. Investment Recommendations - The report suggests that the environmental sector, particularly in energy conservation and resource recycling, is expected to maintain high growth. It recommends focusing on companies like Hanlan Environment, Xingrong Environment, and Hongcheng Environment, while also paying attention to other firms in the sector [4].

Financial Data and Key Metrics Changes - The company ended the quarter with $108 million in cash and cash equivalents, with combined operating revenue, interest, and investment income of $43.6 million, compared to approximately $2 million in the same quarter last year, marking an increase of approximately $41 million [11][12] - The loss from operations was $3.7 million, while non-GAAP adjusted EBITDA was a positive $6.6 million, an increase of approximately $23 million from last year's adjusted EBITDA of negative $16.7 million [11][12] - Gevo North Dakota generated income from operations of $12.3 million and a positive non-GAAP adjusted EBITDA of $17.8 million [11] Business Line Data and Key Metrics Changes - Gevo North Dakota is now a core earnings engine, demonstrating reliable energy production, efficient carbon capture, and consistent monetization of clean fuel production credits [13] - Gevo R&G generated income from operations of $0.5 million and positive non-GAAP adjusted EBITDA of $2.7 million [11] Market Data and Key Metrics Changes - The company successfully sold all of its 2025 Section 45(z) clean fuel production credits for a total of $52 million, with net proceeds of approximately $29 million received so far [13][14] - The company expects to grow its carbon dioxide removal (CDR) sales from $1 million in Q2 to $3-$5 million by the end of 2025 [17] Company Strategy and Development Direction - The company aims to maximize adjusted EBITDA from existing assets and plans to build a jet fuel plant at Gevo North Dakota, which could add an additional adjusted EBITDA uplift of about $150 million [9][10] - The company is focusing on monetizing carbon value through various methods, including selling carbon credits and production tax credits, as part of its business model [6][7] - The company is also working on expanding its carbon capture and sequestration capabilities and optimizing energy use at its facilities [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment in North Dakota, highlighting its pro-agriculture and pro-energy stance, which aligns well with the company's operations [6] - The management believes that the integration of ethanol production and carbon sequestration is crucial for achieving the best economics and carbon scores for jet fuel [30] - The company anticipates that its operating cash flows will normalize and trend towards break-even or better in the coming quarters [15] Other Important Information - The company has implemented Verity, a digital carbon tracking and verification platform, at its Gevo North Dakota facility, which is expected to enhance transparency and trust in carbon accounting [21][22] - The company has partnered with Frontier Infrastructure Holdings to offer integrated carbon management solutions for ethanol producers [22] Q&A Session Summary Question: Can you elaborate on the incremental capital and steps required to optimize your operation and a reasonable timeline to achieve $110 million of EBITDA? - Management indicated that incremental capital is estimated to be around $15 million, focusing on debottlenecking the ethanol plant and optimizing energy use [34][35] Question: Can you elaborate on the DOE loan extension and how it increases the likelihood of DOE financing? - Management noted that the shift of the DOE loan guarantee to North Dakota is favorable due to the existing profitable operations and infrastructure [38][39] Question: Can you provide insight into the EBITDA drivers for next year? - Management highlighted that growth will primarily come from carbon sequestration capacity expansion and debottlenecking efforts [43][44] Question: How should we project the incremental CI improvement over the next number of quarters? - Management explained that the CI score is expected to drop due to the One Big Beautiful Bill, which will increase 45Z generation [75][76]

Report Industry Investment Ratings No relevant content provided. Core Views of the Report - Palm oil: Lack of drivers, focus on short - term support [2] - Soybean oil: US soybeans decline, slow regression of soybean - palm oil spread [2] - Soybean meal: Trade sentiment fluctuates, stay on the sidelines [2] - Soybean: Range - bound [2] - Corn: Short - term bullish [2] - Sugar: Weak operation [2] - Cotton: Pay attention to external market impacts [2] - Eggs: In an adjustment phase [2] - Pigs: Inventory accumulation continues, wait for the release of spot contradictions [2] - Peanuts: Focus on the actions of oil mills [2] Summary by Related Catalogs Palm Oil and Soybean Oil - **Fundamental Tracking**: Palm oil's day - session closing price rose 1.65%, night - session fell 0.60%; soybean oil's day - session rose 0.61%, night - session fell 0.12%. Spot prices of palm oil in Guangdong decreased by 10 yuan/ton, while that of first - grade soybean oil in Guangdong increased by 10 yuan/ton [4]. - **Macro and Industry News**: From November 1 - 5, 2025, Malaysia's palm oil yield, oil extraction rate, and production increased compared to the same period last month. Argentina's oilseed workers reached a wage agreement with soybean processing enterprises, avoiding a strike [5][7]. - **Trend Intensity**: Palm oil and soybean oil trend intensities are both 0 [8]. Soybean Meal and Soybean - **Fundamental Tracking**: DCE soybean 2601's day - session rose 1.69%, night - session rose 0.19%; DCE soybean meal 2601's day - session rose 0.95%, night - session fell 0.39%. Spot prices of soybean meal in different regions had slight changes [10]. - **Macro and Industry News**: On November 6, CBOT soybeans fell due to limited Chinese demand. Citi expects China to resume large - scale purchases of US soybeans in the long run [10][12]. - **Trend Intensity**: Soybean meal and soybean trend intensities are both 0 [12]. Corn - **Fundamental Tracking**: Corn's C2601 day - session rose 0.75%, night - session rose 0.09%; C2603 day - session rose 0.88%, night - session rose 0.14%. The price of Guangdong Shekou increased by 10 yuan/ton [13]. - **Macro and Industry News**: Northern corn bulk shipping port prices decreased by 10 yuan/ton, while Guangdong Shekou's increased by 10 yuan/ton [14]. - **Trend Intensity**: Corn trend intensity is 0 [17]. Sugar - **Fundamental Tracking**: Raw sugar price is 14.19 cents/pound, up 0.08. Mainstream spot price is 5730 yuan/ton, up 50 [19]. - **Macro and Industry News**: Brazil's September sugar production increased by 11% year - on - year, but exports decreased. China's September sugar imports were 550,000 tons (+150,000 tons) [19]. - **Trend Intensity**: Sugar trend intensity is - 1 [22]. Cotton - **Fundamental Tracking**: CF2601 day - session fell 0.07%, night - session fell 0.15%; CY2601 day - session rose 0.25%, night - session fell 0.03%. Spot prices of cotton in different regions had slight declines [24]. - **Macro and Industry News**: Cotton spot trading was dull, and ICE cotton futures fell due to events in the US [25]. - **Trend Intensity**: Cotton trend intensity is 0 [28]. Eggs - **Fundamental Tracking**: Egg 2512 rose 1.93%, egg 2601 rose 1.23%. Spot prices in different regions were stable or had slight changes [30]. - **Trend Intensity**: Egg trend intensity is 0 [30]. Pigs - **Fundamental Tracking**: Henan's spot price is 11,980 yuan/ton, up 100; Sichuan's is 11,500 yuan/ton, unchanged; Guangdong's is 12,460 yuan/ton, down 100 [32]. - **Market Information**: In September, the national feed production was 30.36 million tons, a month - on - month increase of 3.4% and a year - on - year increase of 5% [33]. - **Trend Intensity**: Pig trend intensity is 0 [34]. Peanuts - **Fundamental Tracking**: PK601 fell 0.21%, PK603 fell 0.33%. Spot prices of peanuts in different regions had declines or were stable [37]. - **Spot Market Focus**: In some peanut - producing areas, the supply was low, trading was inactive, and prices were stable or weak [38]. - **Trend Intensity**: Peanut trend intensity is 0 [39].

Investment Rating - The report maintains a "Positive" investment rating for the industry [11] Core Insights - The domestic SAF (Sustainable Aviation Fuel) market has seen a significant price increase of 46.7% year-to-date, which is higher than the 9.4% increase in UCO (Used Cooking Oil) prices, indicating improved profitability for companies in this sector [2][6][18] - The demand for biodiesel in the Asia-Pacific region is driving a notable increase in China's biodiesel exports, particularly in Q3 2025, which saw a 15.0% year-on-year growth [7][25] - The report suggests focusing on raw material suppliers and processing companies, such as Zhuoyue New Energy, as the industry shows an upward trend in profitability and demand [2][9] Summary by Sections SAF & HVO - Four domestic companies have received export approval for a total capacity of 1.16 million tons of SAF, with the second batch of export whitelist being established in October 2025 [6][17] - The price of European FOB SAF has increased by 46.7% this year, leading to a favorable outlook for company profitability as the price gap between products and raw materials continues to widen [6][18] Biodiesel - China's biodiesel exports reached 647,000 tons in the first three quarters of 2025, a decrease of 27.5% year-on-year, but Q3 2025 saw a significant recovery with a 15.0% year-on-year increase [7][25] - The average export price of biodiesel in Q3 2025 was $1,152 per ton, reflecting an 11.7% year-on-year increase [7][25] UCO - In Q3 2025, China's UCO exports totaled 635,000 tons, a decrease of 11.2% year-on-year, attributed to the cancellation of export tax rebates in December 2024 [8][37] - The average export price for UCO in Q3 2025 was $1,082 per ton, up 19.7% year-on-year, driven by increased international demand due to EU regulations [8][37] Market Outlook - The report anticipates further supportive policies for the domestic market, particularly in renewable energy consumption targets, which will benefit the biodiesel sector [9][47] - The SAF industry is expected to grow significantly as multiple countries implement blending targets and incentives, transitioning from planning to actual demand [9][47]

Core Viewpoint - The company is focusing on the sustainable aviation fuel (SAF) sector, particularly in the development of molecular sieve catalysts necessary for the isomerization and de-waxing processes in SAF production [1] Group 1: Company Strategy and Focus - The company has completed the development and reserve of various molecular sieve materials, with catalysts performing well in long-term industrial raw material operations [1] - The company does not directly produce SAF fuel but aims to provide high-performance, import-substitutable key catalytic materials for SAF production enterprises and related technology providers [1] - The company plans to increase R&D investment in renewable resources, leveraging its core advantages in molecular sieve material development and large-scale production to promote industrial applications in SAF and other clean energy sectors [1] Group 2: Industry Outlook - The SAF industry is transitioning from being policy-driven to market-oriented, with continuous improvement in industry prosperity [1]