Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Chinese chemical industry** and its transition from a "cash-consuming beast" to a "cash-generating tree" due to reduced capital expansion and strong operating cash flow [1][13]. Core Insights and Arguments - **Capital Expansion Trends**: The capital expenditure in the basic chemical industry is decreasing, with the proportion of construction projects to fixed assets declining. This trend is expected to continue, leading to positive free cash flow over the next five years [1][4][5]. - **Cash Flow and Dividends**: The petrochemical sector has turned positive in operating cash flow, with a potential dividend yield exceeding 10% by 2027 for some companies if 70% of cash flow is allocated to dividends [1][9]. - **Cost Advantages**: Chinese chemical companies benefit from lower energy and labor costs compared to European counterparts, which face high production costs and low capacity utilization [1][10]. - **Impact of Anti-Overexpansion Policies**: The anti-overexpansion policies are expected to limit capital expansion but will enhance free cash flow and dividend-paying capacity, improving the investment value of leading companies [1][13][14]. Important but Overlooked Content - **Sector-Specific Insights**: - The chromium salt industry is expected to see strong demand growth due to increased orders from gas turbines and military applications, while supply is constrained by environmental regulations [2][42]. - The coal chemical sector is experiencing a recovery in profitability due to rising global energy prices and improved demand, despite being at historical low price levels [15][18]. - The refrigerant market is projected to grow due to rising demand and supply constraints, particularly for R32 and automotive refrigerants [44]. - **Future Trends**: The report anticipates a significant upward trend for leading companies in the chemical sector, driven by improved profitability and valuation as the industry undergoes capacity clearing [14][41]. Conclusion - The Chinese chemical industry is poised for a recovery phase, with strong cash flow generation and potential for high dividend yields, particularly for leading firms. The anti-overexpansion policies, while restrictive, may ultimately enhance the industry's long-term health and investment attractiveness [1][13][14].

工业硅日报 油） 021-60635738 lijie@ccb.ccbfutures.com 期货从业资格号：F3031215 021-60635737 renjunchi@ccb.ccbfutures.com 期货从业资格号：F3037892 硅）028-8663 0631 penghaozhou@ccb.ccbfutures.com 期货从业资格号：F3065843 021-60635740 pengjinglin@ccb.ccbfutures.com 期货从业资格号：F3075681 021-60635570 liuyouran@ccb.ccbfutures.com 期货从业资格号：F03094925 研究员：冯泽仁（玻璃纯碱） 021-60635727 fengzeren@ccb.ccbfutures.com 行业 日期 2025 年 09 月 16 日 能源化工研究团队 研究员：李捷,CFA（原油燃料 研究员：任俊弛（PTA/MEG） 研究员：彭浩洲（工业硅/多晶 研究员：彭婧霖（聚烯烃） 研究员：刘悠然（纸浆） 期货从业资格号：F03134307 请阅读正文后的声明 - 2 - 请阅读正文后的声明 ...

Investment Rating - The report maintains a positive outlook on the organic silicon industry, indicating a potential recovery in profitability and a favorable supply-demand balance [4][5]. Core Insights - The organic silicon industry is experiencing a structural transformation, with a significant shift in demand from traditional sectors like real estate to emerging sectors such as new energy vehicles and photovoltaics, which are expected to drive double-digit growth in domestic consumption [4][5][55]. - Domestic consumption of organic silicon DMC is projected to reach 1.82 million tons in 2024, reflecting a year-on-year increase of 21%, with a further increase to 1 million tons in the first half of 2025, marking a 24% growth [4][6][31]. - The report highlights that while the construction sector's contribution to organic silicon demand is declining, the demand from new energy vehicles and photovoltaics remains robust, supporting overall industry growth [4][5][55]. Summary by Sections 1. Organic Silicon: Superior Material for National Economy - Organic silicon materials are characterized by their unique Si-C bonds and are widely used across various sectors, including construction, electronics, and automotive [4][14][17]. 2. Resonance of Domestic and Foreign Demand Boosts Prosperity, New Energy Catalyzes Incremental Demand 2.1 Sustained High Demand and Upgrading Consumption Structure - China's organic silicon consumption accounts for approximately 60% of global demand, with significant growth potential in emerging markets [4][31][60]. 2.2 Construction Impact Slowing, New Energy Drives Incremental Domestic Demand - The construction sector's share of organic silicon demand has decreased from 31% in 2022 to 25% in 2024, while sectors like new energy vehicles and photovoltaics are experiencing rapid growth [4][31][36]. 2.3 Strong Overseas Demand Boosts Exports, China Expected to Continue Capturing Overseas Market Share - Domestic exports of polysiloxane reached 545,600 tons in 2024, a 34% increase year-on-year, with expectations for continued growth driven by cost advantages [4][60][61]. 3. Reduction of Overseas Capacity, Domestic Capacity Peaks, Deep Processing Highlights Bottom Value 3.1 Overseas Capacity Expected to Exit - The report notes that overseas organic silicon DMC capacity is expected to decline due to cost and environmental factors, creating opportunities for domestic producers [4][5][60]. 3.2 Domestic Expansion Cycle Concludes - Domestic organic silicon DMC capacity is projected to reach 3.44 million tons by the end of 2024, nearly doubling since 2020, with the expansion cycle now concluded [4][5][60]. 3.3 Intermediate Cost Curve Flat, Industry Widespread Losses - The report indicates that while some companies may enhance profitability through downstream processing, the overall sector has faced prolonged losses, highlighting a strong demand for profitability recovery [4][5][60]. 4. Supply-Demand Inflection Point Evident, Historical Elasticity Significant - The report suggests that the supply-demand balance is improving, with domestic operating rates expected to rise from 67% in 2024 to 76% and 83% in 2025 and 2026, respectively [4][5][60]. 5. Profit Forecast and Investment Recommendations - The report recommends focusing on integrated companies with scale advantages and strong downstream processing capabilities, such as Hoshine Silicon Industry, Dongyue Silicone Materials, and Xingsheng Group [4][5][60].

Investment Rating - The report suggests a positive outlook on Sichuan Road and Bridge as a leading player in Southwest infrastructure, highlighting its current combination of regional infrastructure growth and dividend yield [3][15]. Core Insights - The report emphasizes the importance of local manufacturing in Africa, particularly for companies like Keda Manufacturing, which is positioned as a leader in localized production and sales [4][16]. - The report notes a price increase in RTF copper foil, indicating a high demand for HVLP products, and suggests continued investment in copper foil and electronic cloth sectors [5][17]. - The report tracks the performance of various materials, indicating a downward trend in cement prices and a mixed outlook for glass and fiberglass markets [6][18][22]. Summary by Sections Weekly Discussion - Sichuan Road and Bridge is highlighted for its strong position in Southwest infrastructure, with a reported investment of 134.9 billion yuan in transportation construction, ranking second nationally and showing a 3.5% increase year-on-year [3][15]. Cyclical Linkage - Cement prices averaged 340 yuan per ton, down 43 yuan year-on-year, with an average shipment rate of 44.7% [6][18]. - Glass prices increased to 1295.28 yuan per ton, reflecting a 4.58% rise, while concrete mixing stations reported a capacity utilization rate of 7.12% [6][18]. - The report warns of potential price declines in steel due to market fundamentals [6][18]. National Subsidy Tracking - The report mentions the allocation of 690 billion yuan for consumer goods replacement subsidies, with plans for further funding in October [7][19]. Important Changes - Notable acquisitions include Defu Technology's purchase of Circuit Foil Luxembourg for 174 million euros and the listing of Hanhai Group on the A-share market [8][20][21]. Market Performance - The construction materials index fell by 3.96% over the week, with specific declines in glass manufacturing and fiberglass sectors [24]. Material Price Changes - Cement prices continued to decline, with a national average of 340 yuan per ton, while glass prices showed a slight increase [32][41]. - Fiberglass prices remained under pressure, with a reported average of 3595.25 yuan per ton [66].

Investment Rating - The report assigns a "Buy" rating for several key stocks in the chemical industry, indicating a positive outlook for their performance in the near future [8]. Core Insights - The chemical industry is experiencing a trend of "anti-involution," with regulatory measures aimed at curbing low-price competition and promoting the orderly exit of outdated production capacity [1]. - The construction of the Yarlung Tsangpo River hydropower project is expected to generate significant demand for engineering and materials, with a total investment of approximately 1.2 trillion yuan [3]. - The chemical sector is witnessing a recovery in prices for certain products due to improved supply dynamics, particularly in TDI, organic silicon, and butanone, driven by production shutdowns and maintenance [2]. Summary by Sections Industry Investment Rating - The report highlights a bullish sentiment towards the chemical sector, with specific stocks recommended for purchase based on their expected performance [8]. Regulatory Environment - The Central Financial Committee's recent meeting emphasized the need for legal governance of low-price competition and the orderly exit of outdated capacity, reinforcing the "anti-involution" trend in the chemical industry [1]. Market Performance - From September 2021 to February 2024, the basic chemical sector index fell by 59.5%, but recent trends show a recovery with a 5.3% increase in the basic chemical index from July 11 to July 25, 2025 [2]. Key Product Insights - TDI prices have surged from 11,000 yuan/ton in early May to 20,000 yuan/ton by July 24, 2025, due to supply constraints from global production issues [2]. - Organic silicon prices increased to 12,500 yuan/ton by July 25, 2025, following a fire incident that affected supply [2]. - Butanone prices rose from 7,900 yuan/ton to 8,400 yuan/ton in early July 2025, reflecting improved market conditions [2]. Investment Opportunities - The report identifies potential investment opportunities in AI applications and hardware materials, particularly in companies that are positioned to benefit from advancements in AI technology [3].

Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [6] Core Insights - The central government has reiterated the need to combat "involution" in the industry, particularly in the photovoltaic sector, aiming to optimize the market structure and eliminate low-efficiency production [1][22][23] - The photovoltaic industry has experienced a surge in installed capacity due to a "rush to install" phenomenon, with a significant increase in new installations expected to taper off in the latter half of the year [2][24] - Industrial silicon prices have shown a downward trend but have recently seen a slight recovery due to production cuts in major factories [3][25][26] - The organic silicon market has faced price fluctuations, with limited new capacity expected in the future, indicating potential stabilization [4][31][34] Summary by Sections 1. Industry Overview - The central government emphasizes the need for market mechanisms to phase out inefficient capacities and prevent price wars in the photovoltaic sector [1][22] - The photovoltaic industry has seen a cumulative installed capacity exceeding 1.08 billion kilowatts, accounting for 30% of China's total power generation capacity [2][24] 2. Price Trends - As of July 4, 2025, industrial silicon prices are at 0.90 million yuan per ton, down 21.9% year-to-date but have recently increased from a low of 0.85 million yuan per ton [3][25] - The average price of organic silicon is 1.08 million yuan per ton, reflecting a 16.9% decrease since the beginning of the year [4][31] 3. Investment Recommendations - Suggested investments include upstream oil and gas companies, leading chemical firms, and new materials related to semiconductors, OLEDs, wind power, and lithium batteries [5]

Report Summary 1) Report Industry Investment Rating No investment rating is provided in the report. 2) Core Viewpoint The current marginal demand for industrial silicon is weakening, the oversupply pattern is difficult to reverse, and high inventory and high warehouse receipts suppress the price rebound. Silicon prices are in a weak and volatile state [1]. 3) Summary by Related Catalogs Market Conditions - This week, the industrial silicon spot market is running weakly. Affected by the continuous weak downstream demand, the market is in a continuous slump. The price of East China oxygen - containing 553 silicon is 8900 - 9300 yuan/ton, and the price of East China 421 silicon is 9800 - 10200 yuan/ton [1]. - Last Friday, the closing price of the main industrial silicon futures contract si2506 was 8205, a decrease of 0.55%. The daily position reduction was 10,933 lots. The current position is 170,200 lots, and the trading volume is 14.349 billion yuan [1]. Supply Side - Northwest large - scale factories continue to cut production. The eastern production area has shut down 3 submerged arc furnaces, and the western production area has shut down 5 submerged arc furnaces, a total of 8. There may be more shutdown plans in the future. In the southwest production area, manufacturers are cautious about the current market, but some manufacturers said they will increase or resume production. It is expected that about 10 submerged arc furnaces will resume production from the end of the month to the second half of the month [1]. Demand Side - Polysilicon prices have no obvious fluctuations and remain within a range. The N - type compact material is quoted at 38 - 40 yuan/kg, the N - type granular silicon is quoted at 35 - 38 yuan/kg, the N - type re - feed material is quoted at 39 - 43 yuan/kg, and the N - type mixed material is quoted at 36 - 38 yuan/kg. Component inventories are under pressure, and some enterprises are gradually planning production cuts. The main polysilicon futures contract ps2506 is approaching its first delivery, with obvious long - short differences in the market [1]. - The market price of organic silicon DMC is generally stable, with the mainstream opening price in the market referring to 11,500 - 12,000 yuan/ton (net water delivered). The organic silicon market shows signs of phased stabilization, but the supply - demand contradiction still exists [1]. - The price of aluminum alloy ingots is temporarily stable. The industry's operating rate has decreased. Downstream enterprises mainly consume pre - holiday orders, and their willingness to stock up after the holiday is insufficient [1]. Inventory On May 9, the industrial silicon warehouse receipt inventory was 67,338 lots, a single - week decrease of 1,898 lots. The warehouse receipt inventory continues to decrease but remains at a high level [1].

Group 1: Report's Investment Rating - No investment rating for the industry is provided in the report. Group 2: Core View of the Report - The current market bottoming signal for industrial silicon is unclear. Social inventory and the number of warehouse receipts suppress the rebound height, and silicon prices are expected to continue to run sluggishly [1]. Group 3: Summary by Relevant Aspects Market Conditions - On May 8, 2025, the industrial silicon spot market was weak. The price of East China oxygenated 553 silicon was 9000 - 9300 yuan/ton, and that of East China 421 silicon was 9900 - 10200 yuan/ton. The closing price of the industrial silicon futures main contract si2506 was 8315, down 0.36%, with a single - day reduction of 1671 lots, current positions of 181,100 lots, and a trading volume of 16.375 billion yuan. The si2506 showed a "V" - shaped trend on that day [1]. Supply Side - In the southwest region, as the wet season approaches, due to low prices and expanding industry losses, the enthusiasm for enterprise resumption is significantly lower than in previous years, with only partial capacity slowly releasing. In the northwest region, the operating rate remains high, and the supply pressure is not relieved. The current market price has fallen below the cash cost of most factories, the industry's loss - making area has expanded, but due to previous hedging and forward price locking, the production reduction is limited, and the capacity adjustment cycle is lengthened. The de - stocking process is slow. Although the prices of silica and reducing agents in the southwest region have slightly declined, cost support cannot offset the downward pressure on prices [1]. Demand Side - Polysilicon prices are temporarily stable, the supply - demand game has deepened, and the mentality of enterprise production reduction is brewing but not yet concentrated. Organic silicon DMC prices are stable, with the market's mainstream opening price at 11500 - 12000 yuan/ton (net water delivered). Terminal demand is weak, factories frequently reduce production and conduct maintenance. Although the DMC price has a slight rebound, orders are mainly from pre - holiday inventory digestion, and post - holiday market transactions have weakened. Aluminum alloy ingot prices have fallen, the industry's operating rate has been adjusted down, and downstream enterprises mainly consume pre - holiday orders and have insufficient willingness to stock up after the holiday [1]. Inventory - On May 8, the industrial silicon warehouse receipt inventory was 68,415 lots, a single - day decrease of 271 lots. The warehouse receipt inventory has been decreasing recently but remains at a high level [1].

Group 1: Report Industry Investment Rating - No relevant content Group 2: Core View of the Report - The supply and demand of industrial silicon have both decreased, and the industrial cost has collapsed. The contract value is approaching the cash cost of leading enterprises, and it is accelerating to find the bottom in the short term [1] Group 3: Summary According to Relevant Catalogs Logic - The industrial silicon spot market was weakly stable yesterday. The price of East China oxygenated 553 silicon was 9,200 - 9,400 yuan/ton, and that of East China 421 silicon was 10,000 - 10,200 yuan/ton. The closing price of the main contract si2506 of industrial silicon futures was 8,325, down 2.57%. It continued to decline with a significant increase in positions. The main contract added 13,001 positions in a single day, with the current position at 179,500 lots and the trading volume at 11.279 billion yuan [1] Supply - end - The industrial silicon production in Gansu was relatively stable, but there might be a shift to production reduction due to price impacts recently. The output of 97 silicon remained low, and it was difficult to increase the short - term production. The operating rate of intermediate frequency furnaces was low, and the price was still at a low level, but the inquiry situation of traders improved. The market continued to decline, some manufacturers lowered their quotes, the "buy on rising" sentiment intensified, and buyers were still dominant. There were a small number of transactions of low - priced goods from some spot - futures traders [1] Demand - end - The price of polysilicon was temporarily stable, but the demand further declined, and the silicon material price was under pressure. The prices of N - type dense material, N - type granular silicon, N - type re - feeding material, and N - type mixed material were 38 - 40 yuan/kg, 35 - 38 yuan/kg, 39 - 43 yuan/kg, and 36 - 38 yuan/kg respectively. The prices of downstream silicon wafers and battery cells were lowered again, and the market was obviously weak. The rapid decline in demand led to an imbalance in supply and demand in each link. The price of organic silicon DMC fluctuated. The market's mainstream opening price was 11,500 - 12,000 yuan/ton (net water delivered). Some new units of monomer plants entered planned maintenance in May, and the price of the organic silicon spot market stopped falling and rebounded. Downstream enterprises were still digesting pre - holiday inventories, and there was no significant increase in demand in the short term. The spot prices of aluminum alloy ingots in some regions decreased, the terminal demand was continuously weak, the phenomenon of production reduction or suspension of procurement by die - casting enterprises increased, the market trading atmosphere was cold, and alloy ingot enterprises were accumulating inventories [1] Inventory - On May 6, the warehouse receipt inventory of industrial silicon was 68,930 lots, a single - day decrease of 360 lots. The warehouse receipt inventory decreased slightly but remained at a high level [1]

Report Summary 1. Report Industry Investment Rating - No relevant information provided 2. Core View - The industrial silicon futures and spot prices are both in a weak position. The supply - demand imbalance persists, with supply not expected to decrease in May, demand lacking significant changes, and inventory levels rising. The market is likely to continue its weak and volatile trend before the long holiday, and attention should be paid to the potential pressure of increased production during the wet season [4]. 3. Summary by Directory 3.1 Market Review and Outlook - **Market Performance**: The main contract price of industrial silicon futures showed weak performance. The Si2506 contract closed at 8,540 yuan/ton, down 2.68%. The trading volume was 199,942 lots, and the open interest was 195,153 lots, with a net increase of 7,060 lots [4]. - **Spot Price**: The spot price of industrial silicon was also weak. The price of 553 in Sichuan and Yunnan was 9,500 yuan/ton. The price of 421 in Sichuan was 10,850 yuan/ton, 10,350 yuan/ton in Yunnan, 10,400 yuan/ton in Inner Mongolia, and 10,500 yuan/ton in Xinjiang [4]. - **Future Outlook**: In the fourth week of April, the production volume was 72,000 tons, still above the equilibrium level, and there is no expected supply reduction in May. The demand side remains unchanged, with the demand for polysilicon at 108,000 tons, and organic silicon enterprises reducing production to support prices. Other demands are stable, and the oversupply situation shows no sign of improvement. The combined futures and spot inventory has reached 752,800 tons, and the inventory - to - consumption ratio has climbed to 2.51. The losses have not had a significant negative impact on the supply side, and the fundamental driving force is still weak. The market is expected to remain weakly volatile before the long holiday [4]. 3.2 Market News - On April 29, the number of futures warehouse receipts on the Guangzhou Futures Exchange was 69,417 lots, a net decrease of 50 lots from the previous trading day [5]. - On April 22, 2025, Hesheng Silicon Industry Co., Ltd. released its 2024 annual report. The company's operating income was 26.692 billion yuan, a year - on - year increase of 0.41%, and the net profit attributable to shareholders of the listed company was 1.74 billion yuan, a year - on - year decrease of 33.64% [5]. - Shandong Dongyue Organic Silicon Material Co., Ltd. recently released its Q1 2025 financial report. The operating income decreased by 15.68% to 1,202,001,050.99 yuan compared with 1,425,465,566.20 yuan in the same period of the previous year, indicating market competition pressure [5]. - On April 28, the reference price of organic silicon DMC on the Business Society was 11,680 yuan/ton, a decrease of 18.89% compared with the beginning of the month (14,400 yuan/ton) [5].