The chemical sector experienced a deep correction on Thursday, June 18th. The Huabao Chemical ETF (516020), which reflects the overall performance of the chemical sector, briefly rose at the opening before rapidly declining. Its intraday price fell by as much as 2.74%, closing down 1.64%.
Among the constituent stocks, shares in segments like spandex, petrochemicals, and fluorine chemicals led the declines. By the close, Huafon Chemical shares plunged 9.87%, while Zhejiang Longsheng and Juhua Co., Ltd. fell over 7%. Rongsheng Petrochemical, Zhejiang Orient Holdings, and Sanmei Chemical Co., Ltd. all dropped more than 5%, dragging down the sector's performance.
On the news front, the US and Iran are set to sign a ceasefire agreement on the 19th, with traffic through the Strait of Hormuz gradually resuming. Some analysts point out that oil prices are expected to quickly return to the $70-$80 range after the agreement is signed. However, the current geopolitical conflict landscape remains unchanged, and the US-Iran agreement leaves many issues unresolved. If conflicts reignite, oil prices could surge again.
China Galaxy Securities stated that, on one hand, domestic chemical companies are currently cautious about capital expenditures, while outdated overseas production capacity is accelerating its exit, making the "East rising, West declining" trend in supply significant. On the other hand, policies continue to stimulate domestic demand, and the momentum for chemical product exports is being released. They are optimistic about the release of restocking demand for chemical products domestically and abroad in the second half of 2026 and an improvement in industry performance, suggesting attention to the allocation value of the chemical sector.
Looking ahead, Oriental Securities indicated that the market's previous core concerns about the chemical industry were the high volatility caused by the uncertain Middle East situation and the negative demand feedback from high oil prices. From the current standpoint, the fundamentals and valuations of the chemical industry have nearly returned to their bottom, potentially creating a window for actively positioning in the sector. They recommend focusing on sub-sectors and individual stocks with better second-quarter earnings expectations.
Sinolink Securities noted that market style may gradually shift from extreme concentration back towards balance, suggesting a focus on traditional cyclical products with rising prices, including spandex, among others. Regarding the AI direction, differentiation will continue, and attention should be paid to low-position and application-oriented areas.
How to Capture the Rebound Opportunity in the Chemical Sector? Utilizing the Huabao Chemical ETF (516020) may offer a more efficient approach. Public information shows that this ETF tracks the CSI Segmented Chemical Industry Theme Index, with constituent stocks covering popular themes like AI computing power, anti-involution, robotics, and new energy. Off-exchange investors can also access the chemical sector through the ETF's feeder funds (Class A: 012537, Class C: 012538).
Source: Shanghai and Shenzhen Stock Exchanges, etc., as of June 18, 2026.
Fee Structure Details: When investors subscribe for or redeem fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions. The Huabao Chemical ETF does not charge a sales service fee.
Institutional View Sources: China Galaxy Securities' "Chemical Industry Mid-2026 Strategy Report: Global Supply and Demand Reshaping, China Leading the Upswing" dated June 18, 2026; Oriental Securities' Basic Chemical Industry Weekly Report "Peace Dawn in Middle East Situation Brings Window for Chemical Sector Positioning" dated June 14; Sinolink Securities' Basic Chemical Industry Research "Market Style Pendulum Continues to Return to Balance, Suggesting Focus on Cyclical Price Increase Direction" dated June 13, 2026.
Subscription fee rates for Chemical ETF Feeder Fund Class A are: below 1 million yuan, 1%; 1 million yuan (inclusive) to 2 million yuan, 0.6%; 2 million yuan (inclusive) and above, 1,000 yuan per transaction. Redemption fee rates are: within 7 days, 1.5%; 7 days (inclusive) to 180 days, 0.5%; 180 days (inclusive) and above, 0%.
Redemption fee rates for Chemical ETF Feeder Fund Class C are: within 7 days, 1.5%; 7 days (inclusive) and above, 0%. The sales service fee rate is 0.2%.
Risk Disclosure: The Huabao Chemical ETF passively tracks the CSI Segmented Chemical Industry Theme Index, which has a base date of December 31, 2004, and was launched on April 11, 2012. The index's constituent stocks are adjusted according to its compilation rules, and its back-tested historical performance does not indicate future index performance. Individual stocks mentioned in this article are listed solely for the objective presentation of index constituents and do not constitute any stock recommendation or represent the investment direction of the fund manager or the fund. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice of any form to the reader, nor is there any liability for direct or indirect losses arising from the use of this content. Investors should carefully read the fund's legal documents such as the "Fund Contract," "Prospectus," and "Fund Product Key Facts Statement" to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance. The fund's past performance does not predict its future performance, and the performance of other funds managed by the fund manager does not guarantee the performance of this fund. According to the fund manager's assessment, the Huabao Chemical ETF has a risk rating of R3 (Medium Risk), suitable for Balanced (C3) and above investors. The suitability matching opinion should be based on the sales institution. Sales institutions (including the fund manager's direct sales channels and other sales institutions) conduct risk assessments of the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. Suitability opinions from various sales institutions may not necessarily be consistent, and the fund product risk rating results issued by fund sales institutions shall not be lower than the risk rating results issued by the fund manager. There may be differences in the description of the fund's risk-return characteristics and its risk rating in the fund contract due to different considerations. Investors should understand the fund's risk-return profile and choose fund products prudently based on their own investment objectives, investment horizon, investment experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of the above funds does not indicate a substantive judgment or guarantee of their investment value, market prospects, or returns. Fund investment involves risks.
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