Chemical Market Starts Spring with a "Warm Current," Three Major Sectors Poised to Lead the Rally

Following the Chinese New Year, the chemical market has experienced a robust and concentrated recovery, with the warming trend significantly outpacing the same period in previous years. Prices of traditional cyclical products such as MDI, TDI in the polyurethane sector, and silicones continue to rise. Market trading is active, indicating a broad-based recovery in basic chemicals. This round of price increases is driven by the convergence of multiple industrial dynamics.

Currently, the price increases of some chemical products are supported by solid fundamentals:

I. Demand Side: Concentrated Downstream Momentum
After the holiday, industries such as plastics, textiles, home appliances, and automobiles have accelerated their production resumption, unleashing a strong wave of restocking demand. Concurrently, the continuous optimization of real estate policies has further boosted expectations for sectors like building materials and coatings, injecting momentum into the chemical industry chain.

II. Cost Side: Stable Upstream Support
Amid geopolitical situations and macroeconomic expectations, international crude oil prices remain high with fluctuations, while domestic coal prices perform robustly. Firm prices of upstream raw materials like oil, gas, and coal have reinforced the cost center of chemical products.

III. Supply Side: Short-Term Localized Tightness
During the holiday period, routine maintenance at some large plants, combined with unexpected shutdowns at individual production lines, led to a localized tightening of spot supply. Against the backdrop of rapidly recovering demand, supply contraction has become a direct catalyst pushing prices higher.

Future Outlook: Three Categories of Chemicals Expected to Lead the Next Rally

As leading products open up price headroom, market attention is turning to potential sectors with clear upward logic. The following three key segments deserve close attention:

1. Agricultural Chemicals Sector: Demand Catalyzed by Spring Plowing
The peak season for spring plowing preparations, including fertilizer and pesticide application, has arrived, leading to a seasonal rebound in demand for agricultural supplies like fertilizers and pesticides. Against the backdrop of stricter environmental regulations and resource value reassessment, the phosphorus chemical chain is experiencing a gradual improvement in its operational climate. Meanwhile, inventories of some pesticide technical materials and intermediates continue to decline, with price elasticity gradually emerging.

2. New Materials Sector: Sustained Growth in High-End Demand
Industrial upgrading and the promotion of "new quality productive forces" are driving demand growth for high-performance chemical materials. Products such as Nylon 66, polyether amine, PVDF, polyacrylate, and specialty engineering plastics like PEEK, characterized by high technical barriers and favorable supply-demand dynamics, possess a strong ability to pass on price increases.

3. Basic Raw Materials: Flexibility Brought by Supply-Demand Repair
With rising operating rates downstream, certain basic raw materials that were previously priced low, running at high utilization, and facing limited new supply are expected to see restorative price increases. This includes some olefin derivatives, chlor-alkali products, and organic intermediates influenced by evolving import/export dynamics.