The chemical sector continued its strong advance today (January 6th)! The Chemical ETF (516020), which reflects the overall performance of the chemical sector, opened higher and maintained high-level volatility, with its intraday price reaching a peak gain of 3.83%. As of this writing, it is up 3.15%.
In terms of constituent stocks, shares in sectors such as petrochemicals, phosphorus chemicals, and chlor-alkali led the gains. As of this writing, Hengli Petrochemical surged over 8%, while Xingfa Group, Cathay Biotech, and Junzheng Group rose more than 7%. Tongkun Group, Luxi Chemical, Wanhua Chemical, and several other stocks also climbed over 6%.
On the capital front, the basic chemical sector continued to attract substantial inflows. Data shows that, as of this writing, the basic chemical sector saw a single-day net main fund inflow of 12.4 billion yuan, ranking second among the 30 CITIC primary industries. Over the past 60 days, the sector has accumulated a massive inflow of 236.9 billion yuan, placing third in net inflows among the 30 CITIC primary industries.
Regarding market news, para-xylene (PX) prices rose in late December, with futures prices increasing by up to 800 yuan per ton and spot prices rising by approximately 340 yuan per ton. Orient Securities pointed out that as PX is a significant product in integrated refining and chemical projects, the price increase has boosted market expectations for the profitability of refining enterprises, thereby driving a stock rally. The extent of the stock gains suggests the market holds greater expectations for a profit recovery in refining companies. During periods of extreme industry downturn, major changes in leading enterprises are likely to bring about recovery opportunities for the sector.
Looking ahead, China Galaxy Securities stated that capital expenditures in the chemical industry have turned negative in 2024. With the wave of "anti-involution" and the accelerated exit of outdated overseas capacity, the supply side is expected to contract. The recommendations for the 15th Five-Year Plan, which emphasize "adhering to expanding domestic demand," set the tone for the next five years. Coupled with the start of the US interest rate cut cycle, demand space for chemical products is opening up. The firm believes that a bottom in both supply and demand is essentially established, with strong policy expectations acting as a catalyst. The chemical industry may see an upward cyclical turning point in 2026, initiating a "Davis Double Play" from valuation repair to earnings growth.
How can investors capture the rebound opportunities in the chemical sector? Utilizing the Chemical ETF (516020) may offer a more efficient approach. Public information shows that the Chemical ETF (516020) tracks the CSI Segments Chemical Industry Theme Index, providing comprehensive coverage across various chemical sub-sectors. Nearly half of its portfolio is concentrated in large-cap leading stocks, including Wanhua Chemical and Salt Lake Potash, allowing investors to benefit from the "strong get stronger" investment theme. The remaining half of the portfolio is allocated to leading stocks in sub-sectors such as phosphate fertilizers, phosphorus chemicals, fluorochemicals, and nitrogen fertilizers, offering a comprehensive grasp of investment opportunities within the chemical sector. Off-exchange investors can also participate through the Chemical ETF Connect Fund (Class A: 012537 / Class C: 012538).
Source: Shanghai & Shenzhen Stock Exchanges, etc., as of January 6, 2026.
Risk Warning: The Chemical ETF passively tracks the CSI Segments Chemical Industry Theme Index. The base date for this index is December 31, 2004, and it was launched on April 11, 2012. The composition of the index's constituents is adjusted according to its compilation rules, and its past performance does not indicate future results. Individual stocks mentioned are listed solely for the objective presentation of index constituents and are not recommendations, nor do they represent the investment direction of the fund manager. Any information appearing herein is for reference only, and investors are responsible for any independent investment decisions. Furthermore, no views, analysis, or forecasts constitute investment advice of any kind to the reader, and no liability is accepted for any direct or indirect losses arising from the use of this content. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance. Past performance of the fund does not predict future performance, and the performance of other funds managed by the fund manager does not guarantee the performance of this fund. Based on the fund manager's assessment, the Chemical ETF has a risk rating of R3-Medium Risk, suitable for investors with a Balanced (C3) or higher risk profile. Suitability matching opinions are subject to the sales institution. Sales institutions assess the risk of the above funds according to relevant laws and regulations. Investors should pay attention to the suitability opinions provided by the fund manager. Opinions on suitability may vary among sales institutions, and the risk rating results provided by fund sales institutions shall not be lower than those determined by the fund manager. There may be differences in the risk-return characteristics and risk ratings described in the fund contract due to different consideration factors. Investors should understand the fund's risk-return profile and carefully select fund products based on their investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of these 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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