Guotou Securities: Geopolitical conflicts reshape the chemical industry landscape, focusing on sulfur, crude oil, strontium carbonate, and methanol.

Guotou Securities released a research report stating that the current geopolitical conflicts have indeed brought uncertainties to global energy and resource supply, and have also changed the supply and demand patterns and price logic of some chemical products. The report focuses on the core investment logic of sulfur, crude oil, strontium carbonate, methanol, and other four varieties in the current environment. The main points of Guotou Securities are as follows: Sulfur: A long-term bullish variety after geopolitical conflicts Sulfur, as a by-product of refining, has short-term supply side variables due to attacks on Russian refineries. According to Zhonglian Gold, it is estimated that the supply of 1 million tons of sulfur in Russia will be affected in the fourth quarter, and it is expected that the sulfur supply will still be difficult to recover in the first half of 26th year. Considering the long-term perspective, the demand for gasoline and diesel is approaching its peak and carbon costs are continually rising, global refining capacity is facing long-term structural adjustments, and the growth rate of sulfur supply is expected to gradually peak. In terms of demand, it is estimated that China's lithium iron phosphate production in 25th year may exceed 3.6 million tons, an increase of 1.1 million tons from 24th year, corresponding to an additional demand of 1.06 million tons of sulfur. In addition, in 26th year, Indonesia is expected to have a production capacity of approximately 658,000 tons of MHP, corresponding to an increased demand of 6.58 million tons of sulfur, further exacerbating supply shortages. In addition, the solid-state battery technology path is gradually converging to sulfide electrolytes, with sulfur accounting for as much as 82% of the cost of lithium sulfide, promising to open up long-term growth space for sulfur. Overall, in 25-27 years, sulfur is expected to form supply-demand gaps of -30/-513/-405 million tons, and prices may seek historical highs. It is recommended to pay attention to three major sources of sulfur: Sulfur pyrite: Guangxi Yuegui Guangye Holdings, Anhui Liuguo Chemical, Kunming Chuan Jin Nuo Chemical, Anhui Huilong Agricultural Means of Production, Anhui Sierte Fertilizer Industry, etc.; Large-scale refining: China Petroleum & Chemical Corporation, Petrochina, Rongsheng Petro Chemical, Hengli Petrochemical, etc.; Sulfur recovery: Shandong Sunway Chemical Group, Zhenhai Petrochemical Engineering, etc. Crude oil: The game between geopolitical premiums and loose fundamentals Loose fundamentals: The global oil market may maintain an oversupply situation in 2026. This is mainly due to the growth in production from non-OPEC+ countries (such as Brazil, Guyana) and the lack of strong global oil demand growth. Geopolitical premium: Despite loose fundamentals, geopolitical conflicts (such as in the Middle East and the US military intervention in Venezuela) will bring risk premiums, causing oil prices to fluctuate significantly in the short term. The bank believes that the surplus of oil is difficult to change but tends to moderate, and oil prices are expected to bottom out and rebound. On the supply side, attention should be paid to the actual implementation of OPEC+ production increases and the increase in production of US shale oil, while on the demand side, focus should be on the pace of China's strategic reserve filling. It is recommended to pay attention to: China Petroleum & Chemical Corporation, Petrochina, CNOOC Limited, etc. Strontium carbonate: A flexible variety in the game of US-Iran geopolitical conflicts Strontium carbonate raw materials are highly dependent on Iran. China's strontium mines are heavily dependent on imports, with 70% coming from Iran. Supply uncertainties under geopolitical risks have sharply increased. Considering the ongoing pressure from the US on Iran, the short-term supply uncertainties of strontium carbonate raw materials such as celestite have intensified, and if geopolitical risks further escalate, subsequent sea exports may be severely restricted, leading to a significant shortfall in China's supply of celestite. In terms of downstream consumption structure, it is mainly divided into strontium ferrite (66.0%), metallurgical industry (6.9%), electronic components (3.3%), fireworks industry (2.1%), and other strontium salts (21.7%). Based on the good conductivity and stability of strontium carbonate, as well as its properties as an additive to improve the refractive index, light transmittance, and UV resistance of glass, it has the potential in the field of manufacturing high-quality optical glass and even advanced packaging glass substrates. The bank believes that the trend of intelligence and high-end applications in the field of strontium carbonate may gradually emerge, accelerating the contribution of demand increments. It is recommended to pay attention to: Qinghai Jinrui Mining Development, Guizhou Redstar Developing, etc. Methanol: Significant increase in supply risk under Iranian geopolitical disturbances China is highly dependent on imported methanol from Iran. From January to November 2025, China imported a total of 814,700 tons of methanol from Iran, accounting for 6.4% of China's total methanol imports; if including transit trade from countries like the UAE, Iranian methanol accounts for about 34% of China's total methanol imports. Historical experience shows that political upheavals in Iran have a significant impact on domestic methanol prices. Taking the example of the Iran conflict in June 2025, during which Iran reduced the supply of methanol raw materials for two weeks, directly driving up Chinese methanol port prices by 300 yuan/ton, breaking through the 2700 yuan/ton mark. Under the current situation of Iran's escalating tensions, methanol port prices have also shown a relatively strong trend. It is recommended to pay attention to: Hebei Jinniu Chemical Industry, Shanghai Huayi Group Corporation, CHINA BLUECHEM, CHINA XLX FERT, etc. Risk warning: Risks of macroeconomic downturn, large fluctuations in raw material prices, lower-than-expected downstream demand, risks of significantly expanding production capacity, safety production and environmental risks, risks of enterprise operations, risks of policy uncertainties.