China Galaxy Securities: Performance diverges across chemical sub-sectors; recommend focusing on related cyclical elasticity investment opportunities.

China Galaxy Securities released a research report stating that on the cost side, the Brent crude oil price is expected to maintain wide-range fluctuations at a mid-to-high level in the short term. On the supply side, on the one hand, the pace of capital expenditure in China's chemical industry has become more cautious in recent years, and under-construction and existing capacity will be gradually absorbed; on the other hand, domestic supply-side self-discipline constraints have strengthened and overseas outdated capacity is accelerating its exit, and the supply side is expected to contract. On the demand side, the continued advancement of the shift between old and new growth drivers in China and the gradual return of overseas orders to China make chemical product demand growth foreseeable. The bank believes that supply-side contraction and demand-side momentum are expected to help the chemical industry's prosperity rise, and recommends paying attention to related cyclical elasticity investment opportunities.