Focusing on some price spread repair opportunities after the compression of chemical valuation, Petrochemical ETF Huaxia (159731) rose over 1%

On July 29, the A-share market showed divergent performance in the morning session. The CSI Petrochemical Industry Index oscillated upward, rising over 1%, with constituent stocks showing mixed gains and losses. Zhejiang Longsheng, Xinfengming, Tongkun Shares, and Hualu Hengsheng led the gains. In terms of related ETFs, the Petrochemical ETF Huaxia (159731), which has the lowest fee tier, attracted capital inflows, with a net inflow exceeding 57 million yuan over the past five trading days.

CITIC Futures analysis stated that as China's refined oil inventory drops to a relatively low level compared to the same period last year, the drive to ensure supply has prompted a significant month-on-month increase in refinery operating rates. This will serve as an opportunity for growth in the production of olefins and other oil-chemical products. Regarding aromatics, PX imports will be constrained by high overseas gasoline crack spreads. Meanwhile, PTA and EB operating rates remain low. Due to the rapid surge in raw material prices compressing valuations, PX and BZ are expected to see a recovery in their price spreads relative to naphtha in the future. Investors can monitor some spread recovery opportunities following the compression of chemical valuations.

The Petrochemical ETF Huaxia (159731) and its feeder funds (017855/017856) closely track the CSI Petrochemical Industry Index. From the perspective of Shenwan Level I industry distribution, the basic chemicals sector accounts for 68.14%, and the petroleum and petrochemicals sector accounts for 29.29%. This not only allows investors to lock in the value of upstream energy resources but also to share in the profit recovery of downstream chemical products. Under the trend of "the East rises while the West falls," domestic enterprises benefit from the reshaping of the global chemical industry landscape.