The Middle East situation continues to cause turmoil, and the chemical sector is once again hitting the daily limit.

Geopolitical tensions in the Middle East are continuing to escalate, with the supply side of the petrochemical industrial chain taking a direct hit. China A-share chemical and petrochemical sector and chemical commodities have then surged strongly.

On April 7, according to Xinhua News Agency, Israel launched airstrikes on Iran’s largest petrochemical integrated complex and claimed that it had severely damaged more than 85% of Iran’s petrochemical product export capacity. Meanwhile, according to reports from Iran’s Fars News Agency, an explosion also occurred in Saudi Arabia’s northeastern Jubail Industrial City—one of the world’s important petrochemical production bases—reportedly as a result of attacks on a large scale.

With both production areas attacked on the same day, market concerns about global petrochemical supply suddenly intensified. Today, domestic futures for chemical products such as ethylene glycol, methanol, and propylene saw their front-month contracts rise sharply one after another, with some reaching the daily limit-up. The A-share market responded in parallel: the chemical sector led the whole market, and sub-sectors such as chemical fibers, chemical raw materials, and petrochemicals all erupted.

Israel strikes Iran’s core petrochemical hubs, and supply shock directly targets the export lifeline

According to Xinhua News Agency, the Israel Defense Forces said in a statement on the 6th that that day its forces carried out airstrikes against a large petrochemical integrated facility in Iran’s southern Asaluyeh region. The facility is Iran’s largest petrochemical integrated complex. Israel’s Defense Minister Katz also confirmed the report.

In its statement, the IDF said the strike was the second round of attacks on Iran’s two major petrochemical integrated complexes following earlier operations, and in total it had severely damaged more than 85% of Iran’s petrochemical product export capacity.

According to reports from Iranian media, oil and chemical plants in Asaluyeh in Bushehr Province and in South Pars were “attacked by enemy forces,” with reports of multiple explosions. Tasnim News Agency quoted local officials as saying that petrochemical production installations in Asaluyeh were hit and damaged, and they are currently investigating the extent of the damage.

Saudi Jubail Industrial City is attacked, and 6% to 8% of global petrochemical capacity faces a threat

According to Xinhua News Agency citing Iran’s Fars News Agency in the early hours of the 7th, an explosion occurred that day in Saudi Arabia’s northeastern Jubail Industrial City, involving U.S. capital participation, and it was the result of a widespread attack.

Jubail Industrial City is one of the world’s important petrochemical production bases, with an annual output of about 60 million tons of petrochemical products, accounting for 6% to 8% of global total output.

A number of large petrochemical companies are concentrated in the area, including the Sadara project involving Saudi Basic Industries Corporation, and U.S. Dow Chemical Company, as well as a project jointly invested by Saudi Aramco and France’s TotalEnergies.

Analysts pointed out that with the two major production areas in Iran and Saudi Arabia being hit in succession within the same time window, market concerns about the stability of Middle East petrochemical supply have been significantly heightened.

Chemical commodity futures surge across the board, and ethylene glycol hits the daily limit-up

Geopolitical shocks rapidly transmitted to the commodities market.

Ethylene glycol, methanol, and propylene are all important basic chemical feedstocks, widely used in downstream industrial chains such as polyester, plastics, and synthetic fibers. The Middle East is an important export source of the above products, and uncertainty on the supply side directly drives the market to reprice.

This afternoon, Dalian Commodity Exchange’s ethylene glycol front-month contract hit the daily limit-up, quoted at 5706 yuan/ton, up about 11%; Zhengzhou Commodity Exchange’s methanol front-month contract rose 9%; and Zhengzhou Commodity Exchange’s propylene front-month contract at one point rose 7%.

At the same time, chemical shares became the leading sector on that day in China A-shares, with chemical fibers, chemical raw materials, and petrochemicals among the sub-sectors seeing higher gains. With the triple factors of supply shocks, expectations of price increases, and policy catalysts layered together, the chemical sector stood out in the market that day.

In addition, according to an article mentioned by Wall Street News, the impact of geopolitical tensions is gradually spreading from the energy sector to the chemical and high-end manufacturing industrial chains.

Several global chemical companies have already announced price-increase plans—U.S. chemical giant Dow Chemical increased its polyethylene price hike to twice the level previously announced; German Wacker Chemie comprehensively raised prices for polysilicon products, covering about 2,800 products.

Support is also forming at the policy level. Recently, seven departments including the Ministry of Industry and Information Technology jointly issued the 《Action Plan on Accelerating the Update and Renovation of Old and Obsolete Equipment in the Petrochemical and Chemical Industry (2026–2029)》, which proposed that by 2029, the update and renovation tasks for old and obsolete petrochemical and chemical equipment already identified in each locality will be completed across the board, providing policy backing for the industry’s medium-to-long-term demand.