Investment Rating - The report maintains an "Overweight" rating for the oil and gas sector and the basic chemicals sector [6]. Core Views - The industry is experiencing a "weak peak season" in September, with overall demand remaining subdued and capital expenditure in the chemical sector continuing to decline, indicating a potential turning point in supply and demand dynamics [14][22]. - The CCPI-raw material price spread as of the end of September 2025 is at 2439, which is below the 30th percentile since 2012, reflecting weak pricing across most chemical products [2][14]. - The report anticipates an upward trend in industry conditions for 2026, driven by supply-side adjustments and demand recovery, particularly in the context of high energy-consuming facilities exiting the market in Europe and North America [2][40]. Summary by Sections Demand Side - The PMI for September 2025 is reported at 49.8, indicating that traditional peak season demand is not being met, with slow recovery expected in the short term [3][17]. - The real estate sector continues to show negative growth, impacting overall demand, while consumer goods and infrastructure sectors are expected to drive future demand for chemical products [17][20]. Supply Side - From January to August 2025, the capital expenditure in the chemical raw materials and products sector has decreased by 5.2% year-on-year, suggesting a tightening supply side and a potential turning point approaching [3][22]. - The report highlights that the competitive landscape has intensified, leading to a significant decline in profitability across many sub-sectors since the second half of 2022 [3][22]. Price Trends - Some chemical products have seen price increases due to overseas demand and domestic maintenance activities, while others have declined due to weak demand and reduced supply-side coordination [4][41]. - The report identifies key products with price increases, including methyltrichlorosilane and glyphosate, while products like sucrose and vitamins have seen price declines [4][41]. Investment Strategy - The report suggests focusing on sectors with improving supply dynamics and new technology-driven products, with recommendations for specific companies such as China Petroleum, Juhua Co., and Dongyue Group [5][40]. - It emphasizes the importance of export-driven growth for domestic chemical products, which maintain competitive advantages in cost and quality [20][40].

Investment Rating - The report maintains an "Overweight" rating for the oil and gas sector and a "Buy" rating for several chemical companies [6]. Core Views - The overall price spread in the industry improved in May 2025, with the CCPI-oil price spread at approximately 731, reflecting a 30% improvement compared to the past decade [2][15]. - The report anticipates a recovery point for chemical cyclical products in the second half of 2025, driven by demand recovery and significant slowdown in capital expenditure [2][3]. Summary by Sections Demand Side - The domestic PMI for May 2025 was reported at 49.5, indicating a potential recovery in demand alongside easing tariffs [3][18]. - The report highlights that while the real estate sector remains weak, sectors like automotive and home appliances are showing positive growth due to domestic consumption policies [18]. Supply Side - Capital expenditure in the chemical raw materials and products sector showed a year-on-year increase of 1.3% from January to April 2025, but the growth rate is declining [3][37]. - The report suggests that the industry is entering a self-adjustment phase, with some sectors nearing capacity inflection points [3][37]. Investment Strategy - The report suggests that the second half of 2025 may mark the beginning of an upward trend, focusing on resilient demand and improved market conditions [5][42]. - Recommended stocks include China Petroleum, Juhua Co., Dongyue Group, and others, particularly in sectors like refrigerants and isocyanates, which are expected to see early optimization [5][9]. Monthly Price Changes - In May, several products, including urea and TDI, saw price increases due to supply constraints and export demand [4][43]. - The report notes that while some products are experiencing price increases, others like methyl trichlorosilane are facing price declines due to weak demand [4][43]. Key Sub-industry Review - The oil and gas sector experienced fluctuations in prices, with Brent crude oil prices showing a slight recovery after initial declines [49]. - The report indicates that OPEC+ has adjusted production targets, which may impact future oil prices [49][56].

Investment Rating - The report maintains an "Overweight" rating for the basic chemicals and oil and gas sectors [5]. Core Views - Demand is expected to gradually improve, supported by policy initiatives in real estate and consumption, while supply-side adjustments are anticipated to lead to a recovery in 2025 [1][19]. - The chemical industry is currently experiencing a mismatch in supply and demand, with the PMI data indicating a slight recovery above the neutral line [2][19]. - The overall price spread in the chemical sector remains under pressure due to high oil prices and seasonal demand fluctuations, although some products have seen price increases due to supply constraints [3][37]. Summary by Sections Demand Side - The PMI for February 2025 is reported at 50.20, indicating a shift above the neutral line, suggesting potential demand recovery in the chemical sector [2][19]. - The real estate sector continues to show weak performance, with new construction and sales down by 23.0% and 12.9% respectively in 2024 [19]. - The automotive and home appliance sectors are benefiting from policies like "trade-in for new," contributing to positive growth in production and sales [19]. Supply Side - Fixed asset investment in the chemical raw materials and products sector grew by 8.6% year-on-year in 2024, although the growth rate has slowed compared to 2021-2023 [30]. - The industry is expected to undergo self-adjustment and optimization due to increased competition and reduced capital expenditure willingness among companies [30]. Investment Strategy - The report suggests focusing on downstream products that may recover first, with an emphasis on supply optimization and new technology-driven products [4][35]. - Recommended stocks include China National Offshore Oil Corporation, Hengli Petrochemical, and Satellite Chemical, among others, based on their potential for recovery and strong dividend yields [4][8]. Monthly Review of Key Sub-sectors - In February 2025, most chemical products faced price pressures due to seasonal demand, while some products like methyl trichlorosilane and potassium chloride saw price increases driven by supply constraints [3][37]. - The report highlights the performance of various sub-sectors, with significant price increases in oil sales and storage, while sectors like nitrogen fertilizer and coal chemicals faced declines [38][40].