CITIC Securities' outlook for the chemical industry in 2026: "Anti-internal competition" accelerates, the turning point of the cycle is coming, and new materials remain a long-term strategic direction.

Citic Securities' research report indicates that in the 2026 chemical industry strategy, with the background of slowing industry capital expenditure and approaching the cyclical turning point, it is recommended to focus on varieties that are expected to benefit from "anti-internal competition" first, including the sectors of pesticides, urea, soda ash, filament, organosilicon, and spandex; in addition, during the interest rate reduction cycle, China's counter-cyclical policies will help stimulate domestic demand, so it is recommended to focus on sectors such as polyurethane, coal chemical industry, petrochemical industry, and fluorine chemical industry; furthermore, the development of new productive forces, independent controllable technologies, and industrial upgrading is a firm choice against the backdrop of great power competition, and new materials are still one of the main development directions of China's chemical industry, with a focus on the continuous development of semiconductor materials, OLED materials, COC materials, and other high value-added products; in addition, high shareholder returns will continue to be revalued, focusing on high-quality enterprises such as the three major oil companies representing the oil and gas petrochemical central enterprises, coal chemical industry, compound fertilizer industry, phosphorus chemical industry, and leading companies in the MSG/feed amino acid industry.