Global sulfur supply tightens, titanium dioxide prices rise again, focusing on Petrochemical ETF (159731) and Huaxia's strategic opportunities

As of March 27th, 14:35, the Petrochemical ETF Huaxia (159731) rose by 1.92%, with top-performing stocks including Yara International, Salt Lake Co., Luxi Chemical, Lixia Technology, and Guangdong Hongda.

Recently, titanium dioxide has entered its third round of collective price increases this year. As of March 26th, 25 companies have quickly issued notices to adjust prices, with a general market increase of 1,000 yuan per ton.

Market analysts argue that the ongoing escalation of the situation in the Middle East has significantly increased uncertainty in shipping through the Strait of Hormuz, which is a core passage for global sulfur trade, directly leading to a tightening of global sulfur supply and pushing international spot prices sharply higher. The rapid surge in sulfur prices is quickly transmitted down the downstream chemical industry chain. As one of the core downstream products, the production cost of titanium dioxide has risen significantly, driving prices upward at a rate that exceeds reasonable industry expectations.

Industrial Securities believes that against the backdrop of geopolitical conflicts, China’s chemical companies have relatively diverse sources of energy and raw materials, and their operating costs are relatively lower with a higher degree of integration. This is expected to demonstrate a stronger ability to withstand fluctuations in the external environment amidst supply-side disruptions, thus benefiting from the reshaping of the global chemical industry’s supply structure.

The Petrochemical ETF Huaxia (159731) and its connected funds (017855/017856) closely track the CSI Petrochemical Industry Index, driven by both basic chemicals and oil & petrochemicals, while also encompassing high-dividend and high-growth assets. The development of emerging sectors such as energy storage, solid-state batteries, liquid cooling, robotics, and commercial aerospace is highly intertwined with the innovative development of chemical materials in the petrochemical industry. Alongside the release of policy dividends and optimization of supply-demand structures, the medium to long-term narrative of the industry is improving.

Daily Economic News

(Editor: Zhang Xiaobo)

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