The chemical sector surged against the broader market downturn today (October 28). The Chemical ETF (516020), which tracks the overall performance of the sector, opened higher and climbed sharply, with its intraday price rising up to 1.2% before slightly retreating. As of the latest update, it was up 0.53%.
Among the constituent stocks, fluorochemicals, soda ash, phosphate fertilizers, and phosphorus chemical-related stocks led the gains. As of writing, Do-Fluoride New Materials Co., Ltd. (002407) hit the daily limit-up, while Boyuan Chemical surged over 4%. Xingfa Group, Hangyang Co., and Asia-Potash International also rose more than 3%.
The rally was driven by rising prices of third-generation refrigerants R32 and R134a. Data shows that as of October 26, the price of R125 remained steady at 45,500 yuan per ton, while R134a rose by 1,000 yuan to 54,000 yuan per ton, and R32 increased by 500 yuan to 63,000 yuan per ton compared to last week.
Pacific Securities noted that under production quota restrictions, supply elasticity in the sector is constrained. Companies are prioritizing long-term contract deliveries, tightening market availability and supporting higher prices.
Valuation-wise, as of yesterday's close (October 27), the price-to-book ratio of the Chemical ETF's (516020) benchmark index stood at 2.26x, near a 10-year low at the 37.96th percentile, highlighting attractive long-term investment potential.
Looking ahead, China Galaxy Securities suggested focusing on four key investment themes amid the "15th Five-Year Plan" policy expectations: 1. Industry self-regulation to counter internal competition (e.g., polyester filament, silicone, pesticides). 2. Policy-driven exit of outdated capacity (e.g., refining, soda ash). 3. Supply chain enhancement (e.g., fluorochemicals, modified plastics, PEEK). 4. Global expansion (e.g., potash fertilizers, tires).
For investors seeking exposure to the chemical sector rebound, the Chemical ETF (516020) offers efficient access. The ETF tracks the CSI Segmented Chemical Industry Index, covering major sub-sectors with nearly 50% allocation to large-cap leaders like Wanhua Chemical and Salt Lake Co., alongside niche players in phosphate, fluorochemicals, and nitrogen fertilizers. Off-exchange investors can participate via the ETF’s feeder funds (Class A: 012537; Class C: 012538).
Data source: SSE, SZSE, as of October 28, 2025. Risk disclosure: The ETF passively tracks its benchmark index, which may adjust constituents per its rules. Past index performance (2020-2024: +51.68%, +15.72%, -26.89%, -23.17%, -3.83%) does not guarantee future results. Stock mentions are illustrative and not investment advice. The fund carries medium risk (R3), suitable for balanced (C3) or higher-risk investors.
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