Report Industry Investment Rating No information provided in the report. Core Viewpoints - Market analysis: By the ratio of imports from Iran to the total imports of the product in China, methanol (MA) has the highest impact at 59.1%, followed by polyethylene (PE) at 8.4%. According to the ratio of Iran's production capacity to overseas production capacity, MA has the highest impact at 24.1%. When considering the "Hormuz Strait" chemical production capacity (including Kuwait, Qatar, the UAE, eastern Saudi Arabia, and Iran), MA accounts for 35.4%, ethylene glycol (EG) for 27.3%, and PE for 17%, all having potential impacts. The production capacity ratios of aromatics are relatively small, and the main transmission logic is that the rise in crude oil drives up the cost of the aromatic series. The overall impact of the Iran war situation on chemical products is: methanol > (styrene monomer (EB), pure benzene (BZ), paraxylene (PX), purified terephthalic acid (PTA)) > (polypropylene (PP), PE) > EG [3]. - Strategy: Consider cautious long hedging for contracts MA2605, PX2605, TA2605, BZ2604, EB2604, LL2605, PP2605, and EG2605 [3]. Summary by Directory Iran and Surrounding Countries' Production Capacity Ratio in the Hormuz Strait - Background: On February 28, 2026, the US attacked Iran, and Israel and Iran clashed. There were reports of the Hormuz Strait being blocked and then unblocked. On March 1, 2026, Iran's Supreme Leader Khamenei was reported to have been assassinated. The report aims to analyze the impact on chemical products by studying the proportion of Chinese imports from Iran, the proportion of Iran's production capacity in overseas production capacity, and the potential impact if the Hormuz Strait is blocked again [9]. Chinese Mainstream Chemical Imports from Iran - Methanol: China imports about 14.43 million tons of methanol annually, with about 8.53 million tons from Iran, accounting for 59% of total imports, making it the most directly affected product. Currently, it is the critical period for the restart of Iran's winter - shutdown methanol plants [12]. - PE: China imports about 13.41 million tons of PE annually, with about 1.13 million tons from Iran, accounting for 8.4%. Among PE sub - products, the proportions of linear low - density polyethylene (LL), high - density polyethylene (HD), and low - density polyethylene (LD) from Iran in Chinese imports are 2.6%, 10.2%, and 13.8% respectively. Non - standard products HD and LD are more affected [13][14]. - Other products: The proportions of EG, PP, BZ, EB, and PX imported from Iran to total Chinese imports are relatively small, and the direct impact can be ignored [14]. Iran's Chemical Production Capacity in Overseas and Global Capacity - Methanol: Iran is the largest overseas methanol supplier, with an annual production capacity of 17.16 million tons, accounting for 24% of overseas production capacity. Although its global production capacity ratio decreases when including China, the port price mainly linked to imported sources makes methanol the most affected by the Iran war [17]. - PE: Iran's PE production capacity is 5.65 million tons per year, accounting for 5% of overseas production capacity. The impact is mainly on China's logistics, and the impact on overseas total supply is limited. The overseas production capacity ratios of LL, HD, and LD are 2.9%, 6.8%, and 3.9% respectively [17]. - EG: Iran's EG production capacity is 1.8 million tons per year, accounting for 5.8% of overseas production capacity and 2.9% of global production capacity, with a relatively limited impact on global supply [18]. - PP: Iran's PP production capacity is over 1.03 million tons per year, accounting for 5.8% of overseas production capacity and 1.5% of global production capacity, with a smaller impact on overseas PP supply [18]. - Aromatics: Iran's PX, BZ, and EB production capacities have limited influence on the global market. However, due to the high correlation between aromatics and oil products, the impact of the Iran war on aromatics may be mainly through cost - push logic [18]. Mainstream Chemicals' Overseas Production Capacity in the "Hormuz Strait" - Methanol: The combined methanol production capacity of Kuwait, Qatar, the UAE, and eastern Saudi Arabia is 8.05 million tons per year, mainly from Saudi Arabia's Jubail with 7.05 million tons per year. The "Hormuz Strait" methanol production capacity accounts for up to 35% of overseas capacity, having the greatest impact [23]. - PE: The combined PE production capacity of the above - mentioned countries is 14.05 million tons per year, mainly from Saudi Arabia's Jubail with 8.33 million tons per year. The "Hormuz Strait" PE production capacity accounts for 17% of overseas capacity, also having a significant impact [23]. - EG: The combined EG production capacity of the above - mentioned countries is 6.7 million tons per year, mainly from Saudi Arabia's Jubail with 5.55 million tons per year. The "Hormuz Strait" EG production capacity accounts for 27% of overseas capacity, potentially having a large impact if the Hormuz Strait is blocked [23]. - PP: The combined PP production capacity of the above - mentioned countries is 6.93 million tons per year, mainly from Saudi Arabia's Jubail with 4.53 million tons per year. The "Hormuz Strait" PP production capacity accounts for about 11% of overseas capacity, with a theoretically limited impact. However, due to the tight propane market, Iran may further push up propane prices, providing cost support for PP [24]. - Aromatics: The combined PX, BZ, and EB production capacities of the above - mentioned countries account for about 9.5%, 9.7%, and 11.7% of overseas capacity respectively. Although the numbers seem small, the concentrated maintenance of EB in the US, Germany, the Netherlands, and Spain in April may boost China's EB exports if Middle - East EB shipments are affected [25]. Brief Analysis and Strategies for Each Chemical - Methanol: Currently, the port inventory is at a high level, but due to the decline in Iranian shipments in February and the further reduction of arrival plans in March, the port inventory is expected to start de - stocking in March. The resumption progress of downstream MTO devices in March will determine the de - stocking rate. If the resumption of Iranian winter - shutdown plants is delayed, the port will continue to de - stock from April to May. Strategy: Go long on the MA2605 contract and take a positive spread position on the 5 - 9 spread [31][33][34]. - Styrene: After the holiday, the port inventory is slightly lower than the same period. The market expects styrene to enter the de - stocking cycle in March. With many maintenance plans in March and April and concentrated maintenance in the US, Germany, the Netherlands, and Spain in April, even a small reduction in Iranian EB production may support China's exports. Strategy: Go long on the EB2604 and BZ2604 contracts [39][45]. - PX and PTA: China's PX will start the maintenance cycle in late March, and the de - stocking cycle is expected to be from late March to May, mainly from April to May. PX and PTA have little production pressure in 2026, and the forward PX processing fee is expected to increase. PTA's social inventory is at a low level, and the processing fee is difficult to weaken. Strategy: Go long on the PX2605, PTA2605, and PTA2609 contracts [53][54]. - PE and PP: After the holiday, the petrochemical inventory has accumulated, and the original expectation was for PE and PP to be weak. However, due to the Iran war, the market may price in the potential reduction of PE supply from the Hormuz Strait. Iran's PP production capacity has a relatively small impact on overseas supply, but propane strength may provide cost support for PP. Strategy: Change the L - PP spread narrowing strategy and the L reverse - spread strategy to a wait - and - see approach. Go long on the LL2605 and PP2605 contracts cautiously [60][62]. - EG: After the holiday, the EG port inventory has reached a historical high. The original expectation was for EG to be weak. However, if the Hormuz Strait is blocked and affects the shipping of EG from Saudi Arabia, it may have a large impact. Strategy: Go long on the EG2605 contract cautiously [67][70][71].