The benefits of coal chemical industry with independent raw material advantages will significantly improve, focusing on petrochemical ETF Huaxia (159731) deployment opportunities.

As of 10:00 on April 2nd, the Sinopec ETF Huaxia (159731) increased by 0.2%, with leading holdings including Salt Lake Shares, Satellite Chemical, China Petroleum, China National Offshore Oil Corporation, and others showing gains.

On the news front, U.S. President Trump delivered a speech, claiming a “rapid, decisive, and overwhelming victory” in the Iran conflict. Trump stated that Iran’s missile and drone capabilities have been “greatly weakened,” and that weapons factories and rocket launch sites are “almost gone.” He also emphasized that no foreign assistance is needed in the strike against Iran.

With ongoing geopolitical tensions escalating, continued control of the Strait of Hormuz has generally depressed the Asian petrochemical industry chain. Under the “oil preservation and chemical reduction” strategy, the supply of basic chemicals such as propylene and ethylene has significantly tightened. About 35% of China’s propylene capacity comes from PDH processes, with over 60% dependence on Middle Eastern propane imports. This supply disruption has led to simultaneous reductions in both gas-based and oil-based propylene production, pushing the industry into shortages.

Huatai Securities believes that the cost of oil-based routes has risen sharply and supply is constrained, while coal chemical and light hydrocarbon cracking (gas-based) routes, which have raw material independence advantages, will see significant improvement in profitability. Not only will related companies benefit directly from wider product spreads, but their supply chain stability will also be more prominent.

Sinopec ETF Huaxia (159731) and its associated funds (017855/017856) closely track the CSI Petrochemical Industry Index. According to the first-level industry distribution in Shenwan, basic chemicals account for 60.19%, and the oil and petrochemical industry accounts for 32.7%. As supply-demand dynamics are reshaped and industry attributes upgrade, the industry cycle recovery is accelerating.

Daily Economic News