Chemical products are beginning to present short-selling opportunities.

【Answer 1】 Fuel oil—the overall leader of this round of chemical product price increases—has begun to show signs of weakness. During the fuel oil rally following the National Day holiday, other chemical products failed to follow suit. Ethylene glycol inventories have accumulated; supply for PTA, plastics, styrene, methanol, and butadiene rubber has seen marginal improvement. These indicators collectively suggest that chemical products may undergo a downward correction.

Chemical raw materials and chemical products manufacturing: Policy leads the way; emerging sectors drive industry growth; strategic positioning in high-barrier, high-value-added areas builds a moat.

【Answer 2】 In the first half of 2026, China’s petrochemical industry achieved RMB 8.05 trillion in operating revenue, up 7.8% year-on-year; total profits reached USD 571.39 billion, up 54.9% year-on-year; and total import-export value amounted to USD 478.66 billion, up 7.3% year-on-year. Production remained stable across the domestic petrochemical sector in H1 2026, with improved economic performance and simultaneous growth in both volume and value of imports and exports—marking a solid, steady start. As the effects of pro-stability policies and capacity regulation—and efforts to curb ‘cutthroat’ domestic competition—become evident, the petrochemical market is expected to emerge from its prior phase of ‘bottoming out’ and enter a new upturn cycle in 2026. In the first half of 2026, enterprises across China’s petrochemical industry prioritized high-quality development, intensified innovation efforts, accelerated green, low-carbon transformation, and advanced digital upgrading. Industry operating performance improved notably: the chemical segment generated RMB 5 trillion in revenue, up 9.7% year-on-year, and RMB 312.63 billion in profit, up 65.2% year-on-year. 1.2 Policy objectives emphasize high-quality development of chemical industrial parks and expedite formulation and revision of standards for high-end and green development. As a vital foundational and pillar industry for China’s national economy, the petrochemical and chemical industry commands a large economic scale and high industrial interconnectivity—making it critical to industrial stability and macroeconomic equilibrium. After decades of development, China has become the world’s largest producer and consumer of petrochemical and chemical products. In 2025, seven ministries—including the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, and the Ministry of Emergency Management—jointly issued the ‘Petrochemical and Chemical Industry Stable-Growth Work Plan (2025–2026)’ (hereinafter referred to as the ‘Work Plan’). Its core targets stipulate that, from 2025 to 2026, the petrochemical and chemical industry’s added value should grow at an average annual rate of over 5%, economic performance should stabilize and rebound, industrial innovation capacity should significantly strengthen, fine-grained extension, digital empowerment, and intrinsic safety levels should continuously improve, pollution reduction and carbon mitigation synergies should become markedly more effective, and chemical industrial parks should transition from standardized construction toward high-quality development. Addressing new developments and challenges facing the petrochemical and chemical industry, the Work Plan outlines ten key tasks under five thematic pillars: strengthening innovation, enhancing efficiency, expanding demand, optimizing carriers, and promoting cooperation. Regarding expanding effective investment and facilitating transformation and upgrading, the Work Plan mandates implementation of the ‘Action Plan for Accelerating the Retrofitting of Aging Petrochemical and Chemical Installations’, establishes a robust standard system supporting scientific evaluation and benchmark-based retrofitting of aging facilities, conducts maturity assessments and technological upgrades for digital transformation across the industry, launches the ‘AI+ Petrochemical & Chemical Industry’ initiative, supports enterprises in intensifying energy-saving, water-saving, pollution-reduction, and carbon-mitigation retrofits, and expedites the formulation and revision of standards related to high-end, green, and digital development. 1.3 Fine chemicals represent a strategic priority for chemical industry development; surface-engineering chemicals see accelerating domestic substitution. Fine chemicals production constitutes a strategic priority for global chemical industry development—and one of the fastest-growing economic sectors worldwide. In recent years, central and local governments have introduced a series of industrial policies supporting the fine chemicals sector, including the ‘Implementation Plan for Innovation-Driven Development of the Fine Chemicals Industry (2024–2027)’ (hereinafter referred to as the ‘Implementation Plan’). In this domain, since its founding over two decades ago, JIHECHANG has consistently focused on research and development of fine chemicals for surface and interface treatment, as well as expansion into downstream application fields.

Asia Top Stories – Weekly Summary: Petrochemicals, Chemicals, and Polymers

Oct 19, 2026

ICIS Asia's weekly roundup highlights rising naphtha prices, chemical inflation in Japan, and shifting polymer supply dynamics across China, India, and the GCC amid geopolitical tensions.

icis

2026-07-06

ICIS Asia Weekly Roundup: Fatty Acids, Plastics, and Petrochemicals Market Trends

2026-07-13

Asia Top Stories – Weekly Summary

2026-10-19

Asia Top Stories – Weekly Summary: Petrochemicals, Chemicals, and Polymers

FAQ