Huatai Securities: In the petrochemical sector for Q3, midstream demand was weak, while upstream and materials performed relatively well.

Huatai Securities research report states that due to factors such as repeated geopolitical conflicts, the average international crude oil price in the third quarter of 2026 is still at a high level. It is expected that the profitability of oil and gas exploration companies will increase year-on-year. Some refining companies will benefit from the relatively strong performance of refined oil/aromatics, inventory gains, and refined oil export profits, and their profitability in the third quarter of 2026 is expected to improve year-on-year. For midstream bulk chemicals, due to geopolitical disruptions and high crude oil prices, the demand suppression effect is gradually emerging. Under poor cost transmission and weak demand, the price spreads of most varieties weakened in the third quarter of 2026, and the profitability of related companies is expected to mainly decline quarter-on-quarter. Among them, leading energy and chemical companies such as coal chemical and gas-based chemical companies continue to benefit from high prices of crude oil/olefins, and their profitability is expected to remain at a high level. Leading companies with relatively good competitive landscapes in polyurethane, chemical fiber dyes, refrigerants, and other sectors have shown somewhat prominent profit resilience with the help of the industry's "anti-involution" efforts. Fine chemical products such as amino acids, additives, and tires are also facing dual pressures from demand and costs at this stage. AI and electronic upstream materials benefit from continued growth in downstream demand, combined with the support of domestic substitution, and the profitability of related companies in the third quarter of 2026 is expected to improve overall.