Geopolitical tensions accelerate the withdrawal of overseas chemical production capacity, presenting new global supply opportunities for China's chemical industry

As of the close on March 13, the chemical sector has defied the trend and become one of the few bright spots in the market. Stocks like Xinghua Co., Ltd. (002109.SZ) and Hongbaoli (002165.SZ) hit the daily limit-up, while Jinniu Chemical (600722.SH) approached the limit-up. Salt Lake Co., Ltd. (000792.SZ), Lanxiao Technology (300487.SZ), Zhongfu Shenying (688295.SH), and Yajia International (000893.SZ) led the gains. Stocks such as Yuntianhua (600096.SH), Hengli Petrochemical (600346.SH), and Three Trees (603737.SH) followed suit. The E Fund Chemical Industry ETF (516570) saw active trading, with its latest size reaching 2.914 billion yuan. Recent trading volumes have increased multiple times, liquidity remains good, making it a high-quality tool to seize opportunities from the reshaping of the global supply landscape in the chemical sector.

On the news front, ongoing geopolitical tensions continue to disrupt the global energy and chemical markets, potentially accelerating the exit of overseas chemical capacities. As the conflict between the US, Israel, and Iran persists, the global energy supply chain faces significant shocks. European natural gas and electricity prices have surged sharply, directly increasing local chemical production costs and severely weakening the economic benefits of Europe’s chemical industry. The pace of overseas capacity withdrawal is expected to accelerate further. Data shows that from 2022 to 2025, Europe’s chemical industry will shut down a total capacity of 37 million tons, accounting for 9% of Europe’s total capacity. Among these, petrochemical capacity accounts for 48%, and inorganic basic chemicals account for 32%. Geographically, Germany leads with 8.8 million tons of capacity shut down, followed by the Netherlands, the UK, and others. The European chemical industry is facing severe challenges.

In terms of industry trends, the petrochemical and chemical industry is a core link in China’s resource-based manufacturing re-inflation. It is gradually entering a window for strategic layout during the early stages of industry recovery: First, long-term fixed asset investments are turning negative, and capacity cycle peaks are expected to release profit margins; Second, policy efforts have exceeded expectations. Under the active implementation of the dual control of carbon emissions during the 14th Five-Year Plan, the capacity ceiling for high-energy-consuming enterprises is gradually becoming apparent, and the chemical supply side is expected to benefit first; Third, the “control of incremental growth, reduction of existing capacity, and regulation of processes” measures for petrochemical and chemical industries are becoming more comprehensive, effectively increasing the industry’s recovery slope; Fourth, overseas demand is rising alongside capacity exits, and China’s chemical exports are expected to shift from volume-based to both volume and price growth, leading to a valuation reshaping of China’s industrial strength; Fifth, demand benefits from the transformation of old and new kinetic energy, with new chemical materials likely injecting strong elasticity into industry demand.

To seize the investment opportunities in this round of the chemical sector, focus on the E Fund Chemical Industry ETF (516570). This ETF directly benefits from dual carbon policies and the price increases in key chemical products (such as PX-PTA-spandex industry). It ranks first among ETFs of similar index scale, with prominent core advantages: First, it bundles leading companies across petrochemical, basic chemicals, and coal chemical industries, capturing industry prosperity dividends comprehensively; Second, it offers significant fee advantages, with a management and custody fee totaling only 0.20% per year, much lower than similar products, effectively reducing long-term investment costs; Third, it has clear flexibility, with index composition focusing on sub-sectors with obvious supply-demand improvements, highly sensitive to price increase expectations and industry pattern changes, aligning precisely with current industry development trends.