Sinopec ETF Huaxia (159731) rose by over 3% in early trading, as the chemical product price center is expected to rise, and the profitability of related companies is expected to accelerate recovery in the future.

As of 10:25 on April 7, the Huaxia Petrochemical ETF (159731) is up 2.83%, having risen more than 3% at one point earlier in the session. Holdings including Hengyi Petrochemical and Shengquan Group hit the daily limit. Shares such as Hualu Hengsheng, Luxi Chemical, and Wanhua Chemical are among the top gainers.

In the news, the National Security Commission of Iran’s parliament has begun reviewing a control plan for the Strait of Hormuz. A spokesperson for Iran’s parliament’s National Security Commission said that strategic action plans to ensure security in the Strait of Hormuz and the Persian Gulf have been placed on the agenda.

Industry analysts believe it will be difficult for the conflict to end quickly in the short term. There still remains a relatively high risk of phased escalation. The persistence of the conflict’s impact on Middle East refineries and oil product supply also cannot be overlooked. Even if the war gradually calms down later and the situation shifts into a prolonged “fighting while negotiating” mode, restoring navigation through the Strait of Hormuz, restarting Middle East energy facilities, and restarting refinery/oilfield production may take weeks to months, making it difficult to fully return to pre-war levels.

Ping An Securities believes that domestic oil companies reduce their earnings sensitivity to oil prices through integrated upstream-and-downstream layouts. It recommends focusing on oil companies that have clear targets for intensifying domestic oil and gas resource exploration and increasing reserves and production. Going forward, as the Iran conflict becomes increasingly clear, raw materials are expected to be secured again. In addition, with the upward movement of the oil price center following this round and partial clearing on the supply side for chemical products, the chemical product price center may rise. The profitability of related companies in the future is expected to accelerate its recovery.

The Huaxia Petrochemical ETF (159731) and its feeder funds (017855/017856) closely track the CSI Petrochemical Industry Index. Based on the distribution across Shenwan first-level industries, the Basic Chemicals sector accounts for 60.19%, and the Petroleum & Petrochemical sector accounts for 32.70%, enabling them to capture profit recovery in downstream chemical products. With improvements to industry structure and adjustments to supply-and-demand relationships, the industry’s mid-to-long-term narrative is expected to improve.

Daily Economic News