Geopolitical tensions escalate, coal chemical sector continues to surge, Golden Bull Chemical hits 6 consecutive daily limits in 9 days

(Source: Caixin)

On March 12, Iran’s Supreme Leader Ayatollah Ali Khamenei issued his first statement since taking office, vowing revenge and blocking the strait.

On March 13, the chemical sector initially strengthened, with JinNiu Chemical (600722.SH) hitting the daily limit and reaching a new high. LuHua Technology (600691.SH) hit two consecutive limit-ups. Sanwei Chemical (002469.SZ), Huarong Chemical (301256.SZ), Yaxing Chemical (600319.SH), Jinmei Technology (600844.SH), and Chengzhi Co. (000990.SZ) also followed the upward trend.

On the news front, Middle East geopolitical tensions escalated. On March 12, Iran’s Supreme Leader Ayatollah Ali Khamenei issued his first statement since assuming office, vowing revenge and blocking the strait. The statement said Iran would not abandon revenge, will continue to use strategic measures including blocking the Strait of Hormuz, and will open new fronts if necessary. It called on neighboring countries to close military bases within their borders that are used by the U.S. The strike targets are solely military facilities. The statement emphasized that Iran will seek compensation from enemies at all costs.

Affected by geopolitical factors and other influences, international energy prices fluctuate, and the supply situation for chemicals like methanol may change, leading to short-term price volatility. Industry insiders believe that the core driver of current chemical price increases remains the rise in crude oil prices. As a key upstream raw material in the chemical industry chain, rising oil prices significantly increase costs for the chemical market. Several industry research institutions noted that, amid high oil prices, cost pressures for chemical products have increased markedly, pushing up prices along the industry chain. According to monitoring data from ZhuoChuang Information, recent prices of chemicals such as propylene, olefins, polyether polyols, adipic acid, and phenol ketone have all risen.

Huatai Securities believes that China’s chemical industry chain is relatively resilient. In the short term, supply shocks have less impact on domestic companies compared to overseas firms. Once supply chain expectations stabilize, global inventory replenishment will support a continued recovery in the chemical industry. Investors should focus on leading companies with complete industry chains.