Huatai Securities: Geopolitical conflicts may highlight the resilience of China's petrochemical supply chain.

Huatai Securities research report pointed out that the recent uncertainty in the situation in Iran has led to concerns about global oil and gas as well as some energy and chemical supplies, driving a global price hike in the chemical industry. We believe that 1) in the crude oil market, with the risk premium and global strategic inventory adjustments to balance supply and demand, in the scenario of no long-term production obstacles in Middle Eastern oil fields, the average Brent price forecast for 2026 has been raised to $78 per barrel, benefiting oil and gas exploration and coal-to-olefin production; 2) China's chemical industry chain has strong resilience, with short-term supply being less impacted than overseas companies, and after the supply chain stabilizes, global inventory replenishment will help support the continued recovery of the chemical industry, focusing on leading enterprises with complete industry chains; 3) if international grain prices rise under cost transmission, domestic amino acid companies are expected to benefit, and overseas nitrogen urea companies will also reverse their predicament; 4) Demand for alternative product categories is expected to receive longer-term development opportunities, including wind energy storage, green hydrogen, bio-manufacturing, resource recycling, etc.