Phosphate chemicals + lithium battery materials lead gains, chemical ETF rises over 2% with dual returns

In the news, Iran’s new Supreme Leader has issued his first statement since taking office. The Middle East controls nearly 30% of the world’s oil supply, and the Strait of Hormuz—known as the “world’s energy throat”—accounts for 20% to 30% of global oil shipping. About 90% of energy exports from major Middle Eastern oil-producing countries depend on this waterway. Brent crude oil prices remain volatile around $100 per barrel.

Institutions note that the ongoing US-Iran conflict, while unpredictable in pace, has indeed raised the oil price center expectations for 2026 due to continued Strait blockades. In 2025, Brent’s average price is expected to be below $70 per barrel. Against this backdrop, oil-related and other resource-based commodities (with less price volatility) are expected to benefit significantly.

(1) Coal Chemical Industry. Domestic methanol/synthetic ammonia and urea mainly use coal-based processes, while overseas they mainly use gas-based processes. Calculated based on oil and gas price increases, a $30 per barrel rise in oil prices increases costs for gas-based processes by 480 and 336 yuan per ton. Polyolefins and PVC domestically mainly use coal-based and oil-based processes; overseas mainly use oil-based processes. A $30 per barrel increase in oil prices raises oil-based process costs by 3,000 and 1,500 yuan per ton.

(2) Pyrite. Sulfuric acid downstream applications include phosphate fertilizers (agriculture), titanium dioxide (coatings), hydrometallurgical nickel extraction, and iron phosphate. Demand growth is accelerating. Sulfur, a key supply component, comes from refining byproducts (sulfur prices linked to oil prices) and copper smelting byproducts. Supply growth has been declining, entering a major supply-demand reversal cycle since 2024. Prices have risen from 1,000 yuan per ton to the current 4,650 yuan per ton. The price of pyrite, another sulfur source, has increased from 355 yuan per ton to 1,294 yuan per ton.

(3) Potash and Phosphate Fertilizers. Oil prices are highly correlated with grain prices through bioethanol and other factors. As grain prices rise, demand for fertilizers is expected to increase. Limited supply growth in potash and phosphate fertilizers provides price elasticity.

(4) Bio-based Materials. Raw materials include corn/starch/used oils, with costs not strongly linked to oil prices. Product prices are driven up by increased prices of petroleum-based competitors, enhancing competitiveness.

As of 09:55 on March 13, the Chemical ETF (159870.SZ) rose 2%, with its related index, the Diversified Chemical Industry (000813.CSI), up 1.91%. Major component stocks include Salt Lake Shares (+6.46%), Hualu Hengsheng (+5.19%), Tianci Materials (+4.46%), Enjie Shares (+6.26%), and Yuntianhua (+4.78%).

Related products:

Chemical ETF (159870), Connect Funds (A: 014942, C: 014943, I: 022792), Utility ETF (560190), ChiNext New Energy ETF Penghua (159261), Livestock ETF (159867), Sci-Tech Innovation Energy ETF (588830), Grain ETF (159698)

Related stocks:

Wanhua Chemical (600309), Salt Lake Shares (000792), Baofeng Energy (600989), Tianci Materials (002709), Zangge Mining (000408), Hualu Hengsheng (600426), Yuntianhua (600096), Juhua Shares (600160), Satellite Chemical (002648), Hengli Petrochemical (600346)