News
The chemical industry is experiencing a "cyclical and growth" dual boost, driven by the convergence of supply and demand alongside favorable policies
2026-03-10
On February 25, 2026, news reported that the China Chemical ETF (516220) surged over 3% in intraday trading, driven by industry-friendly factors, marking the official entry of the chemical sector into a recovery and upward trend. In the short term, international oil prices remained resilient amid geopolitical turbulence during the Spring Festival, providing solid cost support for chemical products. Moreover, post-holiday downstream industries resumed operations earlier than in previous years, with core sectors such as polyester and agrochemicals achieving a strong start, indicating robust momentum in demand-side recovery.
At the medium-term level, the chemical industry has seen continuous deepening of "anti-overcompetition" policies, which have accelerated the exit of outdated production capacity through stringent standards such as environmental protection and energy consumption. As a result, the growth rate of fixed assets investment in the sector turned negative, marking the formal end of the capacity expansion cycle and achieving systematic optimization of the supply landscape. Meanwhile, high-cost regions like Europe continue to phase out chemical production capacity due to energy pressures. Leveraging its comprehensive industrial chain advantages and technological advancements, China is gradually taking over global capacity transfers, while leading industry players continue to strengthen their global pricing power.
In the long run, the rising demand for emerging industries such as semiconductor materials, new energy materials, and robotics materials has opened up a "second growth curve" for the chemical industry. Coupled with factors like the U.S. designating phosphorus-based agricultural resources as strategic materials and tariff reductions benefiting the export chain, the chemical sector has shifted from pure cyclical speculation to a dual-driven model of "cyclical recovery + growth premium," with strong certainty in industry recovery.
