Market reports indicate that since the US and Israel launched military strikes against Iran on February 28, Iran's comprehensive blockade of the Strait of Hormuz, the first such action in history, has had an epic-scale impact. The blockade, now nearly two months old as of April 2026, has severed a vital shipping route. Approximately one-fifth of global oil transportation, nearly one-third of methanol trade, and significant supplies of sulfur and ethylene glycol have been cut off. The supply chain for basic chemical raw materials is almost entirely dependent on passage through the Strait of Hormuz.
A recent Goldman Sachs report states that prices for basic chemical products have surged over 60% in recent weeks, marking the fastest rate of increase on record. The speed and magnitude of the price hikes are double those seen during the 2022 European energy crisis. Currently, about 20% of the global supply of chemical products has been disrupted. Supply is unlikely to recover in the short term, with the earliest potential relief for physical supply in Europe and Asia not expected until the third quarter of 2026, raising risks of further price increases.
Entering April and May, industry giants including Dow Chemical, Covestro, and Japan's Tosoh have successively announced price increases, covering core products such as polyethylene, MDI, HDI, and polyurethane system materials. This has intensified the upward price trend that began early in the year. On April 27, BASF issued another price increase announcement, declaring a further global price hike of up to 25% for antioxidants, processing stabilizers, and light stabilizers used in plastic applications. The company explicitly attributed this round of price adjustments to comprehensive increases in raw material, energy, and logistics costs resulting from the military conflict in the Middle East.
A CITIC Securities research report suggests that the introduction of carbon neutrality assessment measures provides another catalyst for the chemical supply side. The formal implementation of the "Carbon Peak and Carbon Neutrality Comprehensive Evaluation and Assessment Measures" specifies that starting from the 2026 assessment cycle, provincial-level Party committees and governments will undergo comprehensive evaluation. The assessment includes control indicators and support indicators. The results will serve as an important reference for the comprehensive evaluation, selection, appointment, and supervision of provincial-level leadership teams and relevant leading cadres. The move into the implementation phase of "Dual Carbon" goals signifies rising costs, accelerated capacity rationalization, and industry upgrading for the typically high-energy-consumption chemical sector.
A Guojin Securities report notes that against the backdrop of剧烈 oil price fluctuations, overall attention on the chemical industry has significantly increased, with the sector's allocation weight continuing to rise. Considering that the current sector expansion cycle is largely over, profitability for most sub-sectors remains at a relatively low point in the cycle, and the valuation attractiveness of some segments temporarily impacted by the oil price surge is beginning to emerge after adjustments, the report maintains a positive outlook on investment opportunities within the broad chemical sector.
Hong Kong-listed stocks related to the chemical industry chain include: China Petroleum & Chemical Corporation (00386), Shanghai Petrochemical Co., Ltd. (00338), SINOPEC Engineering (Group) Co., Ltd. (02386), CHINA SANJIANG (02198), CHINA RISUN GP (01907), Yip's Chemical Holdings Limited (00408), Wuhan Organic (02881), Liwayway Chemical (00746), Tiande Chemical (00609), among others.
Hong Kong-listed fertilizer-related stocks include: China XLX Fertiliser (01866), CNOOC Chemical (03983), Sinofert Holdings (00297).
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