Geopolitical conflicts impact the chemical sector through three stages of evolution. The Chemical ETF (159870) is currently in the early stages of recovery and rising prices driven by supply-demand restructuring.

Recently, geopolitical tensions have remained high, causing oil prices to rise and disrupting the chemical sector. The institution reviewed the overall evolution of the chemical sector during the Russia-Ukraine conflict, which showed a complete three-stage process: (1) a surge driven by sentiment, (2) supply chain risks and weak demand, and (3) supply-demand restructuring and recovery.

1. Sentiment-driven surge: In the early stages of the conflict, market panic was intense, and concerns over supply chain disruptions quickly pushed up energy and chemical prices.

2. Supply chain risk and market consolidation: As high prices suppressed demand and macroeconomic pressures increased, chemical products experienced a phenomenon of high prices but low trading volume, with prices falling back to 70% of pre-conflict levels, affecting corporate profitability.

3. Supply-demand restructuring: Energy prices gradually returned to fundamentals, accelerating the reshaping of the global chemical industry landscape. High-cost capacities in Europe, Japan, and South Korea exited faster, while China’s chemical industry leveraged cost and scale advantages to absorb transferred capacities.

The institution pointed out that the current chemical sector is at a critical turning point, transitioning from the second to the third stage. In the short term, focus on price spread recovery: as the industry shifts from “expectation-driven” to “supply-demand reversal,” downstream product spreads are improving first. In the medium term, capacity reshaping: overseas high-energy-consuming, high-cost capacities (such as ethylene plants in Europe and South Korea) are accelerating exit, while Chinese companies continue to expand their overseas market share. In the long term, industry upgrading: driven by global energy transition and domestic policies against internal competition, high-end and green transformation will become core growth drivers.

As of 13:03 on March 17, 2026, the CSI Sub-industry Chemical Index (000813) components showed mixed gains and losses, with Ruifeng New Materials leading at +4.17%, Hongda Shares up 3.32%, and Zhongjian Technology up 2.54%; Shengquan Group led the decline. The latest quote for the Chemical ETF (159870) is 0.92 yuan.

In terms of liquidity, the chemical ETF had a turnover rate of 3.53% during the trading session, with a transaction volume of 1.138 billion yuan. Looking at a longer period, as of March 16, the average daily trading volume of the chemical ETF over the past month was 1.991 billion yuan.

The chemical ETF closely tracks the CSI Sub-industry Chemical Index, which is composed of seven sub-industry indices, including non-ferrous metals and machinery. These indices select large-cap, liquid listed companies within relevant sub-industries to reflect the overall performance of listed companies in those sectors.

Data shows that as of February 27, 2026, the top ten weights in the CSI Sub-industry Chemical Index (000813) were Wanhua Chemical, Salt Lake Shares, Zangge Mining, Tianci Materials, Hualu Hengsheng, Yuntianhua, Juhua Shares, Hengli Petrochemical, Baofeng Energy, and Rongsheng Petrochemical, accounting for a total of 45.18% of the index.

The chemical ETF (159870) is connected to the over-the-counter market (A: 014942; C: 014943; I: 022792).