Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [5] Core Insights - The basic chemical industry experienced a weekly decline of 1.33% from September 15 to September 19, 2025, ranking 20th among all Shenwan first-level industries [5][11] - The organic silicon price saw a slight increase, with the DMC intermediate price reaching 11,000 CNY/ton, up 1.9% from the previous week, supported by strong pre-sale orders and rising raw material costs [6][12] - The report suggests focusing on specific sectors within the basic chemical industry, including refrigerants constrained by quotas, industries benefiting from "anti-involution" trends like titanium dioxide, and sectors driven by domestic demand such as phosphate fertilizers and civil explosives [8][27] Summary by Sections Industry Overview - The basic chemical industry had a weekly decline of 1.33% from September 15 to September 19, 2025, with the top five gaining stocks being Kaimeite Gases, Guangdong Hongda, Jinghua New Materials, *ST Yatai, and Xinghua New Materials, while the top five losing stocks included Jianbang Co., Runyang Technology, Wankai New Materials, Jiaao Environmental Protection, and Changhua Chemical [5][11] Subsector - Organic Silicon - The organic silicon price increased slightly, with the DMC intermediate price at 11,000 CNY/ton as of September 19, 2025, reflecting a 1.9% rise from the previous week. This increase is attributed to strong pre-sale orders and rising costs of raw materials, particularly metallic silicon [6][12] - The operating rate and production of organic silicon intermediates showed significant month-on-month increases in August [12] Investment Recommendations - The report recommends attention to the following sectors in the basic chemical industry: 1) refrigerants affected by quota constraints (e.g., Juhua Co., Sanmei Co., Yonghe Co., Dongyue Group); 2) industries benefiting from "anti-involution," such as titanium dioxide (e.g., Longbai Group); 3) domestic demand-driven sectors that can mitigate tariff impacts, such as phosphate fertilizers (e.g., Yuntianhua) and civil explosives (e.g., Guangdong Hongda) [8][27]

Investment Rating - The industry rating is "Overweight" (maintained) [6] Core Views - Recent price increases in organic silicon intermediates, particularly DMC, are attributed to rising costs of raw materials and supply constraints due to production halts at a major facility in Shandong. This has led to improved profitability for the sector. The supply of organic silicon is expected to remain limited in the medium term, while demand from sectors such as electronics, new energy vehicles, and photovoltaics is anticipated to grow. Additionally, favorable policies in the real estate sector may stabilize demand in traditional areas. The contraction of overseas production capacity is also beneficial for exports of organic silicon, indicating an improvement in the supply-demand dynamics and a potential recovery in industry sentiment [9][28]. Summary by Sections Industry Overview - From July 21 to July 25, 2025, the basic chemical industry saw a weekly increase of 4.03%, ranking 8th among all Shenwan first-level industries. The top five stocks by weekly increase were: Shangwei New Materials, Henghe Precision, Poly United, Gaozheng Minbao, and Subote. Conversely, the top five stocks by weekly decline were: Pioneer New Materials, Dadongnan, Qide New Materials, Brothers Technology, and Zhongyida [6][12]. Subsector - Organic Silicon - As of July 25, 2025, the price of organic silicon intermediate DMC reached 12,500 CNY/ton, an increase of 11.6% compared to the previous week, with the price spread rising by 26.2%. The continuous rise in the price of raw material metallic silicon has provided cost support for organic silicon. The supply side is tightening due to the production halt of a major enterprise in Shandong, leading to a temporary supply-demand imbalance. Previously, organic silicon companies faced prolonged low-price conditions, resulting in widespread losses. The current positive interplay between costs and supply has strengthened market pricing sentiment [11][15]. Price Trends of Related Products - The prices of related organic silicon products have followed the upward trend of intermediate prices. As of July 25, 2025, the prices were as follows: 107 glue at 13,000 CNY/ton (up 8.3%), raw rubber at 13,500 CNY/ton (up 9.8%), precipitated mixed rubber at 13,500 CNY/ton (up 5.5%), and dimethyl silicone oil at 14,500 CNY/ton (up 3.6%) [11][21].

Investment Rating - The industry rating is "Overweight" (maintained) [7] Core Viewpoints - Recent price increase of organic silicon intermediates is attributed to sufficient pre-sale orders and rising metal silicon prices [9][11] - The supply side is expected to see limited new capacity for organic silicon in China, while demand from electronics, new energy vehicles, and photovoltaics is anticipated to grow [30] - The closure of overseas production capacity, such as Dow's UK facility, is beneficial for China's organic silicon exports, improving the supply-demand balance [29][30] Summary by Sections Industry Overview - From July 7 to July 11, 2025, the basic chemical industry rose by 1.53%, ranking 19th among all Shenwan first-level industries [12] - The top five stocks by weekly increase in the basic chemical industry included: Shangwei New Materials, Hongbo New Materials, Chenguang New Materials, *ST Yatai, and Dongyue Silicon Materials [12] Sub-industry - Organic Silicon - As of July 11, 2025, the price of organic silicon intermediate DMC was 11,000 RMB/ton, up 1.9% from the previous week [11][14] - The industry is experiencing a decrease in inventory and a strong willingness to maintain prices, although downstream demand has not significantly increased [14] - The recent rise in metal silicon prices is providing cost support for organic silicon prices [14] Investment Recommendations - The organic silicon industry is expected to see an improvement in supply-demand dynamics, with a potential recovery in industry prosperity [30]