Huatai Securities: Improved Petrochemical Industry Price Differentials in January May Boost Profitability and Market Recovery

Huatai Securities pointed out that at the end of January 2026, the CCPI raw material price spread was 2631, which is in the 15th percentile since 2012. It has expanded compared to the end of 2025 when it was 2500 points. Influenced by geopolitical conflicts in oil-producing countries, international oil prices have fluctuated upward. Coupled with the spillover of resource commodity price increase sentiment and pre-Spring Festival restocking demand, most chemical product spreads have improved month-on-month. The products mainly raised prices in January are driven by expectations of growth in lithium battery energy storage, support from rising oil prices, and the impact of winter cold waves in the Northern Hemisphere. We believe that industry profits have bottomed out in recent years. Under policies guiding anti-inflation and other measures, supply-side adjustments are expected to accelerate, potentially improving the profitability of bulk chemical products. In the medium to long term, driven by demand growth from the exit of high-energy-consuming devices in Europe and the United States and economic growth in Asia, Africa, and Latin America, outbound and export activities are becoming important growth engines for the domestic chemical industry. With supply and demand recovery, the industry prosperity in 2026 is expected to rise.