Huatai Securities: Profits of bulk chemical products may see improvement, downstream products may lead the recovery.

Huatai Securities research report indicates that by the end of August 2025, the CCPI-crude oil spread is approximately 480, which is below the 30th percentile since 2012. The global macro situation continues to be a game of chess, leading to high volatility in oil prices. Additionally, most downstream chemical products have entered the off-season for demand, resulting in chemical product spreads remaining at low levels. In August, price hikes mainly affected products with tight supply and strong overseas demand. In recent years, the profitability of the petrochemical industry has hit bottom. With the guidance of policies such as "anti-internal circulation," the supply side is expected to adjust rapidly, leading to a potential improvement in the profitability of bulk chemical products. In the medium to long term, with the exit of high-energy-consuming facilities in Europe and the United States and the growth in demand in Asia, Africa, and Latin America, overseas sales/export will become an important growth engine for the domestic chemical industry. The industry's capital expenditure growth rate has been continuously declining since June 2025. With accelerated adjustment on the supply side, the second half of 2025 may mark the starting point of recovery, with downstream sectors experiencing cost relief and improvement in demand leading the way in recovery.