Petrochemicals & Chemicals: October 2026 Strategy — Favor Segments Benefiting from Rising Energy Prices and Supply Constraints
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Guosen Securities' October 2026 investment strategy for petrochemicals argues that Middle East geopolitical conflict is curbing global crude supply, with low inventories amplifying price elasticity; it expects 2026 Brent and WTI price centers at USD 80-100 per barrel. Disruption to shipping through the Strait of Hormuz and the Bab el-Mandeb Strait tightens supply further, supporting upstream producers. China's chemical industry is exiting its large-scale capacity expansion cycle, the supply structure keeps improving, and supply-demand is shifting from surplus to structural tight balance; the domestic chemical product price index (CCPI) rose month over month, and domestic demand is steadily recovering while advanced-manufacturing demand is released. The report recommends oil, refining, dyes and organic silicon as key segments: methanol spot supply remains tight with prices likely to stay high; dye industry concentration is rising, benefiting top producers; organic silicon makers are coordinating output cuts, keeping supply-demand in tight balance with prices expected to rise further; and refined-product tightness should persist. Rated Outperform: CNOOC, PetroChina, Satellite Chemical, Guanghui Energy, Hengyi Petrochemical and Zhejiang Longsheng.
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