Group 1: Report Industry Investment Rating - No information provided Group 2: Core View of the Report - Urea is experiencing a short - term high - level correction and will enter a mid - term oscillation pattern. In the short term, with a large amount of speculative funds leaving the market on Friday night, the commodity index has fallen from a high level, and urea futures are expected to follow suit. Also, with the strengthening of the basis, the liquidity of spot and futures sources in the spot market is expected to be released, bringing supply - side selling pressure to the spot market. In the medium term, urea is expected to oscillate mainly due to the ongoing anti - involution policy which supports the overall valuation of commodities, and the potential second - batch export of urea which may support the demand side. Overall, it is in a short - term correction with a unilateral weakening trend and is expected to oscillate in the medium term [3] Group 3: Summary by Relevant Catalogs 1. Fundamental Tracking - **Futures Market**: The closing price of the urea main contract was 1,803 yuan/ton (up from 1,785 yuan/ton), the settlement price was 1,798 yuan/ton (up from 1,782 yuan/ton), the trading volume was 236,179 lots, the open interest of the 09 contract was 171,609 lots (down 2,182 lots), the number of warehouse receipts was 2,523 tons (unchanged), and the trading volume was 849.507 million yuan (up 139.148 million yuan). The Shandong regional basis was - 13 (down from 25), the Fengxi - to - disk spread was - 113 (unchanged), the Dongguang - to - disk spread was - 23 (unchanged), and the UR09 - UR01 spread was - 4 (up from - 11) [1] - **Spot Market**: Among urea factory prices, Henan Xinlianxin was 1,850 yuan/ton (unchanged), Yankuang Xinjiang was 1,495 yuan/ton (up 35 yuan/ton), Shandong Ruixing was 1,810 yuan/ton (unchanged), Shanxi Fengxi was 1,690 yuan/ton (up 20 yuan/ton), Hebei Dongguang was 1,780 yuan/ton (unchanged), and Jiangsu Linggu was 1,880 yuan/ton (unchanged). Among trader prices, the Shandong region was 1,790 yuan/ton (down 20 yuan/ton), and the Shanxi region was 1,690 yuan/ton (up 20 yuan/ton). The supply - side indicators showed that the operating rate was 83.21% (up 1.04 percentage points) and the daily output was 192,650 tons (up 2,400 tons) [1] 2. Industry News - On July 23, 2025, the total inventory of Chinese urea enterprises was 858,800 tons, a decrease of 36,700 tons from the previous week, a month - on - month decrease of 4.10%. The inventory of domestic urea enterprises continued to decline this period, but the decline narrowed. With weak domestic demand, the overall order - taking and shipment of urea factories slowed down. However, due to some goods still being in the process of export collection and local downstream periodic bargain - hunting purchases, the overall urea factories showed a slight destocking. Some provinces saw an increase in enterprise inventory, while others saw a decrease. Overall, the urea trading has been weak for several consecutive days this week, and the second - batch export has not started yet. It is expected that the inventory of urea production enterprises will show a narrow - range oscillation pattern next week [1]

Summary of Chemical Industry Conference Call Industry Overview - The conference focused on the chemical industry, specifically urea and methanol production, discussing capacity changes, production costs, and market dynamics [1][2][3][4][5][6]. Key Points on Urea Industry - **Capacity Changes**: In 2024, new urea capacity is expected to reach approximately 6 million tons, with an additional 6 million tons projected for 2025-2026. However, actual annual capacity release may only be around 3 million tons due to various factors [1][2]. - **Production Costs and Profitability**: The profit margins for coal-based urea production are significantly higher, ranging from 600 to 800 RMB per ton, while natural gas-based urea is nearing a loss state. The production costs for natural gas urea are constrained by national price limits [3][4]. - **Production Concentration**: The concentration of urea production is low, with the top ten companies accounting for only 20%-30% of the market. Most production facilities are relatively new, with a significant portion built in the last decade [4][5]. - **Operating Rates**: The operating rate in the urea industry has remained historically high, with an increase expected between 2% and 6.4% for the year. The high profitability of coal-based urea and the rigid demand for natural gas urea contribute to this trend [1][5][6]. - **Export Dynamics**: Limited export policies were relaxed in May, allowing for some urea exports. The export profit exceeds 1,000 RMB per ton, particularly appealing during the domestic off-season [7][8][10]. Key Points on Methanol Industry - **Supply and Demand**: Recent declines in methanol production rates are attributed to delayed maintenance and the impact of anti-involution policies. However, most maintenance is expected to be short-term, with supply remaining high in the latter half of the year [13][14]. - **Market Conditions**: The methanol market is influenced by various factors, including the return of Iranian production and fluctuating coal prices. The domestic methanol import volume is projected to remain around 1.25 to 1.3 million tons in the second half of 2025 [15][16]. - **Production Costs**: Coal-based methanol remains the most cost-effective production method, with costs in Inner Mongolia around 1,350 to 1,400 RMB per ton, while natural gas-based methanol is the most expensive, reaching up to 2,600 RMB per ton [28]. Additional Insights - **Impact of Anti-Involution Policies**: The anti-involution policies have a neutral to bearish effect on methanol downstream products, with limited impact on existing production facilities. The policies are expected to lead to a gradual phase-out of older production methods [14][19][26]. - **Future Outlook**: The potential for increased urea exports and the gradual transition from older production methods to newer technologies may create opportunities for investment in the chemical sector [10][12][29]. This summary encapsulates the critical insights from the conference call, highlighting the current state and future expectations of the urea and methanol industries.

Summary of Key Points from Conference Call Records Industry Overview - The conference call primarily discusses the **Xinjiang civil explosives market** and its growth prospects, driven by the **Western Development Strategy** and coal mine capacity expansion. Demand is expected to steadily increase, potentially exceeding **1 million tons** during the 14th Five-Year Plan period, with a focus on the Hami and Jun Dong areas [1][5]. Core Insights and Arguments - **Market Demand and Supply**: - The **Xinjiang industrial explosives market** saw production and sales exceeding **200,000 tons** in the first half of 2025, marking a **10% year-on-year growth** despite coal price declines [2]. - Xinjiang ranks **second nationally** in production and **first in value**, totaling approximately **1.9 billion yuan** [2]. - The supply side is constrained, with a total licensed capacity of **620,000 tons**, predominantly from four major companies holding over **80% market share**, indicating a favorable competitive landscape [6]. - **Company Developments**: - **Xuefeng Technology** and **Guangdong Hongda** have strengthened their order acquisition capabilities post-merger, with expectations of a **20% compound annual growth rate** in new orders due to increased mining service orders in the western regions and overseas expansion [7][9]. - **Yipuli** is projected to see a **20% growth** in 2025, benefiting from major projects in Xinjiang and Tibet, including the **50 billion yuan** Yanjin Mine project [10][11]. - **Regulatory Impact**: - The Ministry of Industry and Information Technology is set to release a plan affecting the **soda ash and chlor-alkali industries**, focusing on structural adjustments and the elimination of outdated capacity, which may benefit companies like **Boyuan Chemical** [12][17]. - **Fertilizer Industry Dynamics**: - The fertilizer sector is undergoing natural optimization, with **urea prices** influenced by overseas demand and export quotas. **Hualu Hengsheng** is expected to benefit from its urea capacity and new projects, contributing significant profits [18][19]. Additional Important Insights - **Chemical Industry Trends**: - The **dye industry** is experiencing a decline in fixed asset investment, with expectations of significant profit recovery in 2026 due to improved supply conditions [21]. - The **organic silicon sector** is facing profitability challenges due to overcapacity, but demand remains strong in downstream applications like **new energy vehicles** and **medical devices** [23][24]. - **Pesticide Market Changes**: - Recent price increases in the pesticide sector, driven by rising demand and regulatory changes, are expected to continue into the latter half of 2025, benefiting leading companies like **Yangnong Chemical** and **Lier Chemical** [25][27]. - **Investment Opportunities**: - Key companies to watch in the organic silicon and pesticide sectors include **Yangnong Chemical**, **Lier Chemical**, and **Runfeng Shares**, which are well-positioned to capitalize on market trends and demand recovery [30]. This summary encapsulates the critical insights and developments discussed in the conference call, highlighting the growth potential and challenges within the Xinjiang civil explosives market and related chemical industries.

Report Summary Investment Rating No investment rating for the industry is provided in the report. Core Viewpoints The upstream coal market sentiment is positive due to industry anti - involution and elimination of backward production capacity policies, driving the urea futures market stronger. After the elimination of urea production capacity, the supply - side pressure will be effectively alleviated, with a strong expectation. However, currently, there is a weak reality with sufficient supply, slow - growing demand, limited exports, and large inventory accumulation [2]. Summary by Directory 1. Price and Spread - Urea主力收盘1803元/吨（+18）；河南小颗粒市场价1810元/吨（-20）；山东小颗粒市场价1790元/吨（-20）；江苏小颗粒市场价1810元/吨（-10）；小块无烟煤750元/吨（+0）；山东尿素基差 - 13元/吨（-38）；河南尿素基差7元/吨（-38）；江苏尿素基差7元/吨（-28）；尿素生产利润260.0元/吨（-20.0）；出口利润1094.6元/吨（+16.0） [1] 2. Upstream Supply - As of July 25, 2025, the enterprise capacity utilization rate was 83.6% (-1.5%), the enterprise in - factory inventory was 85.9 million tons (-3.7), and the port inventory was 54.3 million tons (+0.2). The short - term supply is relatively sufficient, and new production facilities are gradually put into operation, with production remaining at a high level [1][2] 3. Downstream Demand - As of July 25, 2025, the compound fertilizer capacity utilization rate was 33.6% (+1.0%), the melamine capacity utilization rate was 65.2% (+1.0%), and the urea enterprise advance order days were 5.9 days (-0.1). Agricultural demand is gradually ending, industrial demand is in the off - season, and the start - up of autumn compound fertilizer production is slow, with no bright spots in demand [1][2] 4. Urea Inventory - The inventory depletion rate of enterprises has slowed down, and the total inventory has accumulated significantly compared with the same period in previous years [2] Strategies - Unilateral: Bullish in the short term. - Inter - period: Reverse spread for 09 - 01 contracts. - Cross - variety: Coal - based urea production profit [3]

Investment Rating - The report maintains a positive outlook on the pesticide industry, suggesting a "Buy" rating for key companies such as Yangnong Chemical, Lier Chemical, and Runfeng Shares [3][20]. Core Insights - The pesticide industry is experiencing a recovery due to the "Zhengfeng Zhijuan" initiative aimed at regulating the market, which has led to price increases for key products like fluorocarbon herbicides [3][4]. - The report highlights the impact of maintenance shutdowns at major production facilities, such as Wanhua's Hungarian plant, which may lead to supply shortages and price increases in the TDI market [3][4]. - The report emphasizes the potential for improved industry dynamics through the elimination of outdated production capacity, as indicated by government initiatives targeting key sectors [3][4]. Summary by Sections Industry Dynamics - Current macroeconomic conditions indicate a stable global GDP growth of 2.8%, with oil demand expected to rise despite some slowdown due to tariffs [4]. - The report notes that coal prices are expected to decline in the medium to long term, alleviating pressure on downstream industries [4]. Chemical Prices - Recent price movements include a 15% increase in the price of Lier Chemical's fluorocarbon herbicide and a similar rise for Zhongqi Shares [3][11]. - The report mentions that the price of TDI is expected to rise due to low global inventory levels and potential supply disruptions from maintenance activities [3][4]. Investment Recommendations - The report suggests focusing on traditional cyclical stocks and specific sectors such as coal chemical, real estate chain, and agricultural chemicals, highlighting companies like Wanhua Chemical and Hualu Hengsheng [3][20]. - Growth stocks with recovery potential are identified, including semiconductor materials and OLED panel materials, with specific companies recommended for investment [3][20].

Investment Rating - The report maintains an "Accumulate" rating for the basic chemical industry [5] Core Views - The chemical industry is expected to undergo a new round of supply-side reforms, driven by the government's initiatives to eliminate outdated production capacity and improve industry structure [1][21] - The "anti-involution" policy is anticipated to support the exit of old capacities, benefiting leading companies in sub-industries such as refining, fertilizers, pigments, organic silicon, soda ash, and chlor-alkali/PVC [1][21] Summary by Sections Refining - Strict control of refining capacity and low operating rates of local refineries in Shandong are expected to improve the profitability of major refineries [2][24] - As of 2024, China's refining capacity is projected to be 934 million tons, with a target to keep crude oil processing capacity below 1 billion tons by 2025 [24][25] Urea - Future supply is expected to decrease, with only 493,000 tons of new urea capacity projected by 2025, representing 6.5% of the current total capacity [2][26] - The industry is likely to benefit from supply reductions and potential export opportunities, particularly for leading companies capable of upgrading their facilities [26] Soda Ash and PVC - Increased demand from infrastructure projects is expected to drive recovery in the soda ash and PVC markets [3][27] - New soda ash capacity planned for 2025-2026 is estimated at 868,000 tons, accounting for 20% of the total capacity in 2024 [28] - The PVC industry is also expected to see limited new capacity, with a projected increase of 500,000 tons by 2025-2026, representing 17% of the total capacity in 2024 [29] Investment Recommendations - The report suggests focusing on leading companies in various sub-industries, including: - Refining: China Petroleum, Sinopec, Hengli Petrochemical, Rongsheng Petrochemical, Dongfang Shenghong [4] - Fertilizers: Hualu Hengsheng, Chuanheng Co., Hubei Yihua, Salt Lake Potash, Yara International, Sinochem Fertilizer [4] - Pigments: Qicai Chemical, Baihehua, Xinkai Technology, Zhejiang Longsheng, Runtu Co. [4] - Chlor-alkali/PVC: Yangmei Chemical, Chlor-alkali Chemical, Xinjiang Tianye [4] - Organic Silicon/Industrial Silicon: Hoshine Silicon, Xin'an Chemical, Silbond Technology [4] - Soda Ash: Sanyou Chemical, Boyuan Chemical, Shandong Haihua [4]

1. Report Industry Investment Rating - Not provided in the document 2. Core Viewpoints of the Report - The urea market is currently in a pattern of weak supply and demand. Domestic production has declined, but corporate profits have rebounded, though the absolute level remains low. The cost - side support for urea is gradually strengthening. The compound fertilizer demand is weak, with slow growth in production and high finished - product inventory. Exports are progressing, and port inventories are rising. Overall, there is no significant unilateral trend, and it is advisable to pay attention to long - position opportunities on dips [12]. 3. Summary by Directory 3.1. Weekly Assessment and Strategy Recommendation - **Market Review**: On Monday, influenced by the deepening of China's anti - involution policy, most domestic industrial products rose sharply. Urea also rose due to concerns about the elimination of backward production capacity, but it was mainly short - term sentiment. After the price peaked, the sentiment returned to rationality, and urea did not follow the continuous rise of black and some anti - involution related varieties [12]. - **Fundamentals** - **Supply**: Domestic urea operating rate is 83.59%, a 0.87% decline from last week, with a daily output of 19.52 tons. As the shipping date approaches, the port - collection is ongoing. Short - stop devices have increased, and the operating rate is expected to gradually recover in August. Currently, the operating rate is continuously declining month - on - month but is at a relatively high level year - on - year [12]. - **Demand**: The increase in compound fertilizer operating rate is slow due to weak sales and high temperatures. This week, the operating rate is 33.58%, a 1.03% increase from last week, and the finished - product inventory is at a high level year - on - year. Domestic demand is average, and the corporate advance orders are 5.94 days, a 0.12 - day decrease from last week [12]. - **Profit and Valuation**: All process profits are at a medium - low level. The 09 basis is still weak, and the 9 - 1 spread is in a contango situation. The overall structure is weak under high inventory and export expectations. The export profit is high, and the domestic price is relatively undervalued. The price ratio with related nitrogen fertilizers is at a medium - low level, indicating that the spot valuation of urea is low [12]. - **Inventory**: This week, the corporate inventory is 85.88 tons, a 3.67 - ton decrease from last week, but the decline rate has slowed down. The port inventory is 54.3 tons, a 0.2 - ton increase from last week [12]. - **Market Logic**: In the short term, the raw material side has strengthened due to the anti - involution policy, but the actual impact on the urea industry is limited. The market is expected to return to its own fundamentals. Currently, the domestic market shows a pattern of weak supply and demand [12]. - **Strategy**: Pay attention to long - position opportunities on dips [12]. 3.2. Futures and Spot Market - **Contract Prices**: The 09 contract closed at 1803, up 58 from a week ago; the 01 contract closed at 1807, up 87; the 05 contract closed at 1822, up 91. The 9 - 1 spread is - 4, a 29 - point decrease from a week ago; the 1 - 5 spread is - 15, a 4 - point decrease; the 5 - 9 spread is 19, a 33 - point increase [13]. - **Domestic Spot Market**: In Shandong, the price is 1790, a 40 - point decrease from a week ago; in Henan, it is 1830, a 10 - point decrease; in Hebei, it is 1780, a 10 - point increase. The Shandong basis is - 17, a 127 - point decrease from a week ago; the Henan basis is 23, a 97 - point decrease; the Hebei basis is - 27, a 77 - point decrease [13]. - **Downstream Prices**: The price of 45%S compound fertilizer in Shandong remains unchanged at 2950, and the profit is - 28.8, a 7 - point increase from a week ago. In Hubei, the price is 2960, a 10 - point increase, and the profit is 18, a 9 - point increase. The melamine price is not available, and the profit is - 623, a 7 - point increase [13]. - **International Prices**: FOB Arabian Gulf is 478, a 2 - point decrease; FOB Baltic is 437.5, a 10 - point increase; FOB Yuzhny is 445, an 18 - point increase; FOB China is 435, a 25 - point increase; CFR Brazil is 452.5, an 8 - point decrease. The urea export profit is 1202, a 149 - point increase [13]. 3.3. Profit and Inventory - **Production Profit**: The overall production profit is at a low level, including fixed - bed, water - coal slurry, and gas - based production profits [32]. - **Inventory** - **Corporate Inventory**: The corporate inventory is decreasing, but the decline rate has slowed down. The end - of - month corporate inventory is expected to change as shown in the relevant charts [12][36]. - **Port Inventory**: The port inventory is increasing due to ongoing exports [12][36]. 3.4. Supply Side - **Urea Capacity**: There are planned new production capacities, and some enterprises' new production devices have been put into operation or are expected to be put into operation in the future [42][44]. - **Device Maintenance**: Many enterprises are undergoing maintenance, including routine, fault - based, and policy - based maintenance, which has affected the production capacity [48][49]. 3.5. Demand Side - **Consumption**: The monthly consumption shows certain seasonal characteristics. The demand from downstream industries such as compound fertilizers, melamine, and terminal industries like plywood and real estate also affects the overall demand for urea [54][60][68]. - **Export**: Urea export has high profits, and the export volume and regions are shown in the relevant charts [79][80]. 3.6. Option - related - The report shows the option positions, trading volume, position PCR, trading PCR, and volatility of urea options [90][92]. 3.7. Industry Structure Diagram - It includes the urea industry chain, research framework analysis mind - map, and industry chain characteristics, which help to understand the overall structure and characteristics of the urea industry [95][98][100].

Sales Performance and Market Demand - The company has maintained stable growth in phosphate fertilizer sales over the past three years, driven by integrated advantages across the entire industry chain and increasing market demand for efficient and environmentally friendly fertilizers [2] - The market for monoammonium phosphate (MAP) is robust, with strong demand from both agricultural and industrial sectors, leading to a promising outlook for the phosphate market [3] Project Developments - The company is advancing its 700,000-ton ammonia project in Hubei, which is expected to enhance self-sufficiency in nitrogen fertilizer raw materials and improve production efficiency [4] - In Guangxi, the company plans to invest in a green chemical new energy materials project, with a total planned capacity of 1.2 million tons of high-efficiency compound fertilizer and 2 million tons of ammonia [5] Resource Management - The company has significant phosphate resources in Leibo, Sichuan, with a total reserve of approximately 549 million tons and an annual mining capacity planned at 6.9 million tons [6] - The Leibo base will support the supply of raw materials for various products, enhancing overall profitability and market competitiveness [7] Future Growth Potential - Future growth is expected from industry chain collaboration, product structure optimization, and market expansion, with a notable increase in raw material self-sufficiency and improved product structure [7] - The company has implemented cash dividends totaling approximately 242 million yuan, accounting for 30.03% of the net profit attributable to shareholders for 2024, indicating a commitment to shareholder returns [7]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core View The short - term policy expectation has a greater impact on coal and coal - chemical industries than the fundamentals. The supply pressure of urea remains high, and the price may face significant downward pressure when domestic agricultural demand weakens and export demand is insufficient. It is recommended to wait and see for now (View Score: 0) [1]. 3. Summary by Relevant Catalogs 3.1 Price Changes - **Futures Prices**: On July 24, UR01 closed at 1796 yuan/ton, up 0.96% from July 23; UR05 closed at 1804 yuan/ton, up 0.61%; UR09 closed at 1785 yuan/ton, up 0.68%. The urea futures main contract 2509 opened at 1775 yuan/ton, with a high of 1796 yuan/ton, a low of 1768 yuan/ton, and closed at 1785 yuan/ton, with a settlement price of 1782 yuan/ton, and a position of 173,791 lots [1]. - **Domestic Spot Prices**: In most regions, domestic small - particle urea spot prices decreased on July 24 compared to July 23. For example, in Shandong, it dropped from 1830 yuan/ton to 1810 yuan/ton (-1.09%); in Henan, from 1850 yuan/ton to 1830 yuan/ton (-1.08%); in Hebei, from 1800 yuan/ton to 1780 yuan/ton (-1.11%); in Jiangsu, from 1840 yuan/ton to 1820 yuan/ton (-1.09%). The price in the Northeast remained unchanged at 1760 yuan/ton [1]. - **Upstream and Downstream Prices**: The prices of upstream anthracite coal in Henan and Shanxi and downstream products such as compound fertilizer (45%S) in Shandong and Henan and melamine in Shandong and Jiangsu remained unchanged on July 24 compared to July 23 [1]. 3.2 Basis and Spread - **Basis**: The basis of Shandong spot - UR decreased from 37 yuan/ton on July 23 to 6 yuan/ton on July 24, a decrease of 31 yuan/ton [1]. - **Spread**: The spread of 01 - 05 increased from - 14 yuan/ton on July 23 to - 8 yuan/ton on July 24, an increase of 6 yuan/ton [1]. 3.3 Fundamental Analysis - **Supply**: The supply pressure of urea is large, with daily production close to 200,000 tons, which is at a high level. The inventory of upstream enterprises is still about 750,000 tons, although the enterprise inventory has continued to decline slightly, mainly due to the increase in port collection [1]. - **Demand**: The top - dressing demand in July will support the price. However, if domestic agricultural demand weakens and export demand cannot be supplemented, the urea price will face significant downward pressure [1].

3.库存方面，2025年7月23日，中国尿素企业总库存量85.88万吨，较上周减少3.67万吨，环比减少 4.10%。本周期国内尿素企业库存延续下降，但降幅收窄。近期国内尿素需求偏弱，尿素工厂整体接单 及出货放缓。但因部分货源仍处于出口集港中，以及局部下游阶段性逢低采购，整体尿素工厂呈现小幅 去库。 【现货价格更新】 国内尿素小颗粒现货价格，河南市场主流价1830(-20)，基差45(-32)；山东市场主流价1810(-20)，基差 25(-32)；山西市场主流价1670(-20)，基差-115(-32)；河北市场主流价1780(-20)，基差-5(-32)；江苏市场 主流价1820(-20)，基差35(-32)； 【本周市场主要动态】 综合安云思和隆众的统计：1.从供应端来看，国内尿素日产约19.26万吨，开工率81.62%，较去年同日 增加0.94万吨；卓创监测7月日均产量约19.58万吨，月环比下滑4.40%，月同比上涨11.69%。装置方 面，河南中盈（80万吨）7月23日检修（15天），山西晋丰中颗粒升级改造（200天）、闻喜夏季检修 （45天）、天源大颗粒7月底升级改造（200天），河北正元平山（ ...