Pacific Securities: "Anti-Involution" Catalyzes Cyclical Recovery, "New Economy" Drives Growth in New Materials

Stock News12-16

According to Pacific Securities' research report, looking ahead to 2026, the International Energy Agency (IEA) predicts a significant supply surplus in the global crude oil market. However, OPEC+ has slowed its production increase pace, while the U.S. dollar is in a rate-cutting cycle, providing support for commodity prices. With oil prices currently near the average of the past decade, Pacific Securities expects a gradual stabilization or even a modest rebound in oil prices. Key insights are as follows:

**2025 Industry Review: Divergence Within the Chemical Sector** As of December 12, 2025, the Shanghai Composite Index rose 16.04% year-to-date, the CSI 300 gained 16.42%, and the Shenzhen Component Index climbed 27.31%. The CITIC Basic Chemicals Index surged 32.16%, while the CITIC Oil & Petrochemical Index advanced only 6.59%, highlighting sector divergence. The basic chemicals industry outperformed the broader market, driven by rising demand for electronic chemical materials from robotics and AI computing sectors. In contrast, oil and petrochemicals faced pressure due to declining oil prices.

**2025 Sub-Sector Performance: Significant Divergence** Among CITIC’s primary industries, 29 sectors rose while only 2 declined by December 12, 2025. Oil & petrochemicals gained 6.59%, while basic chemicals jumped 32.16%. Within the chemical industry, 38 out of 39 CITIC tertiary sub-sectors posted gains, led by potash fertilizer (+85.87%), inorganic salts (+81.78%), and modified plastics (+75.99%). Refining (-8.99%), polyurethane (+0.46%), and nylon (+1.15%) lagged.

In 2025, resource commodities like potash, lithium, and phosphate ore remained robust. Domestic tech innovation and "new productive forces" spurred growth in robotics, lightweight materials, and modified plastics. Pacific Securities remains bullish on scarce resources and new chemical materials tied to emerging technologies for 2026.

**Energy & Chemicals Outlook for 2026: Stabilization or Modest Rebound** Wind data shows WTI and Brent crude averaged $65.05/bbl and $68.36/bbl in 2025, down from $76.10/bbl and $80.11/bbl in 2024. Natural gas prices rose year-to-date, while coal prices stabilized. The China Chemical Product Price Index fell below its 12-year average, signaling weak demand but recent signs of a bottoming out.

**Risk Factors** 1. Sharp declines in product prices. 2. Faster-than-expected capacity expansion. 3. Volatility in raw material markets. 4. Weaker-than-anticipated downstream demand.

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