CITIC Construction Investment: China's chemical exports continued to be high year on year in June. The core logic is that chemical assets are still scarce

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that fluctuations in oil prices have affected the market's pace of chemical allocation. Uncertain oil prices make downstream chemicals tend to operate with low inventories, and price spreads fall in the short term. However, as oil price expectations are gradually determined, crude oil and downstream inventories are expected to drive the inventory cycle upward. Looking at the medium term, the core logic of China Chemical is still the scarcity of chemical assets, and this scarcity has been further enhanced by disruptions in the petrochemical supply chain. Although there are still differences over the pricing market for forward crude oil, targets that definitively benefit from short-term and medium-term EPS, such as coal chemicals and gas gas chemicals, are worth focusing on.

CITIC Construction Investment's main views are as follows:

Chemical exports continued to be high year on year in June

According to data from the National Bureau of Statistics, China's chemical exports in June were 302.5 billion yuan, +22.7% YoY, +3.4% month-on-month; the cumulative export value for January-June was 1604.5 billion yuan, +13.7% YoY. Looking at each section, exports of plastics and their products were 112 billion yuan, +24.0% year on year, and exports of organic chemicals were 68.6 billion yuan, +40.0% year over year. Together, the two contributed about 74% of the export increase in the month. By country/region, exports of chemicals to India were +46.6%, exports to South Korea were +42.7%, and exports to Russia were +33.0%. All three had the highest export growth rate. The petrochemical and coal chemical sectors maintained large volumes, with exports of butadiene (+266817%), ethylene acetate (+1035%), and ethylene glycol (+1020%) showing the highest year-on-year increase in exports in a single month.

Recently, the conflict between the US and Iran has been repeated, and oil prices have begun to rise

After experiencing downstream inventory removal in April and May, downstream inventories are currently low. Once the market has stable expectations of the oil price trend, it is expected to usher in a round of inventory replenishment, which may be superimposed on the upcoming peak season. Judging from the performance of the second quarter results forecast, the market's reaction to the preliminary increase in the interim report was lackluster. The main concern was that there was a large amount of inventory revenue in the second quarter, making it difficult for chemicals to perform well in Q3 compared to the previous month. Therefore, the bank mainly considers industries and individual stocks that are expected to rise further in Q3. Apart from replenishing stocks itself, the intensity of the industry's recovery also needs to pay more attention to the impact of factors such as domestic demand, external demand, and anti-domestic demand. Notable individual stocks in the Q3 industry with room for improvement include fluorine chemicals and some petrochemical companies.

On July 9, 2026, the State Council issued a notice on issuing the “15th Five-Year Plan” Carbon Peak Action Plan

The “Plan” proposes that the “15th Five-Year Plan” period is a critical period for reaching carbon peaks. The overall requirements will be to use green and low-carbon energy transformation as the key, further promote industrial greening and low-carbon transformation, and ensure that by 2030, China's carbon dioxide emissions per unit of gross domestic product will be reduced by 17% compared to 2025, and that the share of non-fossil energy consumption will reach 25%, and that the carbon peak target will be achieved as scheduled. The plan focuses on speeding up energy restructuring and optimization (such as vigorously developing non-fossil energy sources such as wind, nuclear water, etc.), promoting industrial greening and decarbonization (such as carrying out energy saving and carbon reduction transformation of traditional industries, speeding up the construction of zero-carbon parks and zero-carbon factories, promoting the green and low-carbon transformation of computing power facilities, etc.), and deepening green and low-carbon transformation in key areas (such as promoting energy saving and carbon reduction in construction, transportation, public institutions, etc.) and strengthening support and security, etc., and deepening international cooperation through compacting local responsibility, national action and international cooperation Cohesion has laid a solid foundation for achieving carbon neutrality.

The strategic position of phosphorus resources has improved significantly, and the domestic substitution logic continues to be strengthened

The market's focus on phosphorus-based materials began in 2021. At that time, phosphorus still revolved around the industrial chain represented by phosphate ore-phosphate fertiliser/glyphosate. However, with the increasing importance of cutting-edge industrial competition for mineral resources+fertilizer supply+phosphorus-based materials, etc., the landmark event is that in February and June of this year, the US and China successively listed phosphate ore and elemental phosphorus as national key strategic resources, and their strategic position has been re-evaluated.

Products such as phosphorus trichloride, phosphorus pentachloride, and methyl/ethyl phosphite have been included in the dual-use item export control list

On the one hand, domestic substitution of new phosphorous materials is expected to accelerate in the context of domestic substitution; on the other hand, demand for AI & semiconductors and new energy sources is expected to resonate. For example, high-purity red phosphorus is the core raw material for indium phosphide substrates, high-purity yellow phosphorus can be used to produce electronic grade phosphoric acid and battery grade P2S5. As a core reducing agent for chemical nickel plating, it is widely used in the manufacture of memory chips, PCBs, and high-end carrier boards.

The UK may delay the pace of refrigerant cuts. Recently, leading companies have taken the lead in price adjustments, and overseas supply is in short supply

Recently, the UK Ministry of Environment, Food and Rural Affairs announced that it will postpone the pace of subsequent cuts stipulated in the F-Gas Act, and a shortage of third-generation refrigerants is beginning to appear. Additionally, Beijer Ref UK, the UK's largest refrigeration and air conditioning wholesaler, announced a 60% price increase for R407c refrigerant. The price increase will be implemented on May 20. Among them, the price of R407c will be increased by 60%, and the prices of R134a and R32 will be increased by 35% and 30%, respectively. This time, the UK announced the postponement of the F-Gas Act cuts, indicating that currently third-generation refrigerants still occupy a large share of the local market, and it is more difficult to replace them with fourth-generation refrigerants in the short term. Combined with recent price increases from leading companies, the overseas third-generation refrigerant market will be in strong demand in 2026. The UK has limited refrigerant production capacity, and the vast majority of it relies on imports. The essence of the delay in this reduction is that the import volume is slowing down, which means that the high profitability of domestic third-generation refrigerants is expected to be extended for a long time.

Find targets that will definitively benefit from EPS in the short and medium term

After this wave of correction, the stock price and fundamentals of the chemical industry are in sync. Chemical prices are expected to strengthen further due to large overseas supply gaps and structural problems with domestic insurance of refined oil products. Although there are still differences over the pricing market for forward crude oil, the targets that definitively benefit from EPS in the short and medium term, represented by coal chemicals and gas gas chemicals, are worth focusing on.