Huatai Securities: Improvement in the downstream sector of the chemical industry is expected to continue, and the turning point of supply and demand in the midstream sector is approaching.

Huatai Securities research report stated that weak demand combined with new capacity release has led to overall weak price differences in the chemical industry. However, in the second half of 2025, with the recovery in demand and significant reduction in capital expenditure, coupled with autonomous adjustment on the supply side, the chemical cycle products are expected to reach a turning point in recovery. In the short term, oil prices face pressures from concerns about demand and weakening supply coordination, but cost reduction and demand improvement may help sustain the recovery trend in downstream sectors. In terms of sectors, oil prices have long-term bottom support, and leading companies are reducing costs and increasing output; bulk chemical products focus on optimizing varieties and opportunities for value recovery of leading companies; downstream products/fine chemicals see simultaneous improvement in demand and profit margin recovery, along with export/overseas sales and new technology drivers; high-quality heavy asset chemical companies are expected to improve cash flow and increase dividend intentions.