After the surge in oil prices, what else can you buy on the cyclical commodity price increase line?

Questioning AI · How can the Middle East conflict extend the cycle of commodity price increases?

1. Where is the cycle of commodity price increases currently? Is it still a good time to buy?

Recently, influenced by the geopolitical situation in the Middle East, oil prices have experienced an epic rollercoaster. After a sharp rise and subsequent fall, investors are asking: Is it still worth investing in the cycle of commodity price increases?

The answer is: The cycle of commodity price increases remains highly worth watching.

Based on the historical experience of multiple bull markets in cyclical commodities over the past 20-30 years (2005, post-2009 subprime crisis, 2020-2022), the price increase of cyclical commodities often follows the rhythm: Gold starts → Silver follows → Copper confirms → Oil ignites → Agricultural products conclude. This rotation logic essentially follows global economic laws and market sentiment: When risk aversion rises, precious metals serve as “safe havens”; then, as economic recovery and industrial activity pick up, industrial metals meet demand; with midstream production and manufacturing fully restarting, petrochemical materials, as the mother of materials, erupt; finally, upstream price increases transmit to the consumer side, with tight supply and demand in agricultural products completing the cycle.

Currently, it’s like a relay race: the first leg (non-ferrous metals) has already run out, the second leg (petrochemicals) is taking over, and the third leg (agricultural products) is warming up behind. The story of commodity price increases is not over yet; the market is looking for the next sector to take the baton. Now is not the time to chase the already far-run first leg but to position for the ongoing second leg and the upcoming third leg.

Table: E Fund Cyclical Commodity Price Increase Index Fund Products

2. Why can the cycle of commodity price increases still be bought?

Reason 1: PPI has not yet started to rise significantly, so the price increase cycle is not over. Historical patterns show that once the Producer Price Index (PPI) begins to rise steadily, upstream raw material companies (like petrochemicals) are likely to outperform the market. Currently, PPI shows signs of stabilization and rebound, which may confirm this pattern again.

Reason 2: There is still ample “ammunition” of incremental funds. Large funds such as public mutual funds have not yet heavily allocated to chemical and oil refining sectors, indicating no “front-running.” This means if the trend truly begins, more funds will come in to continue the rally, facing less resistance.

Reason 3: Macro narratives favor commodity price increases. The current market is unfolding a macro story—geopolitical tensions have strengthened resource security demands among nations. Countries are forming small circles, holding resource and key capacity “cards,” and not selling easily. With fewer resources available, prices are naturally more likely to rise.

3. What should be bought now in the cycle of commodity price increases?

Direction 1: Geopolitical risk trading tools—Oil

Reason 1: The Middle East conflict has dragged on longer than expected, and oil prices may continue to rise. Recently, the U.S. military targeted Iran’s oil export hub, Kharg Island. This event has extended the Middle East conflict beyond market expectations. Countries may preemptively scramble and stockpile oil to prevent supply disruptions, pushing prices higher.

Reason 2: Current oil prices have not yet priced in potential supply shortages. The current price increase does not fully account for the risk of nearly 20 million barrels per day of global transportation disruptions. If blockades persist for weeks, the global crude oil market could shift rapidly from surplus to shortage, making further price increases highly probable.

The representative index in the oil sector is the Guozheng Oil & Gas Index (399439.SZ), focusing on the entire upstream oil and gas industry chain in Shanghai and Shenzhen markets, with high weights in the “Three Big Oil” companies. As of February 13, 2026, the combined weight of the three oil giants in the index is about 39.95%, significantly higher than the China Securities Oil & Gas Resources Index (27.66%) and the China Securities Oil & Gas Industry Index (27.97%), indicating the highest beta exposure to upstream oil and gas prices.

The ETF tracking this index is the E Fund Oil & Gas ETF (159181), with a latest scale of 209 million yuan (as of March 11, 2026). It was launched on March 19, 2026.

Direction 2: Early-stage price increase varieties—Chemicals

Reason 1: Dual carbon policies have constrained chemical capacity supply. The 2026 government work report first proposed carbon emission intensity targets. During the 14th Five-Year Plan, the implementation of “dual control” of carbon emissions will be intensified, with local governments likely making carbon emission assessments a rigid constraint. This effectively draws a “capacity red line” for high-energy-consuming chemical industries, making new plants difficult to build and existing low-emission plants scarce. When demand recovers, prices will be easier to rise.

Reason 2: Chemical costs rise with oil prices, boosting price increase motivation. Oil is upstream of many chemical products. When oil prices go up, chemical factories’ costs naturally increase, providing strong incentives to raise product prices.

Reason 3: Cost pressures may lead to a “rise in the east and fall in the west,” with high export growth expected. After oil prices rise, energy costs in Europe, South Korea, and other overseas chemical producers surge, potentially accelerating global capacity clearing. China’s chemical industry, with strong risk resistance, is expected to leverage scale and cost advantages to meet the global restocking cycle.

Reason 4: The chemical industry’s position is not high, and price increases are still in progress. Most core chemical varieties are currently at the 20%-30% percentile over the past five years, with mainstream varieties like PTA and organosilicon below the 25% percentile. The China Chemical Products Price Index (CCPI), reflecting industry prosperity, is at the 23% percentile over the past five years, indicating room for further price increases.

The representative index in petrochemical and chemical sectors is the China Securities Petrochemical Industry Index (H11057.CSI), with a high concentration on upstream resources, with over 92% in basic chemicals and oil refining.

The largest ETF linked to this index is the E Fund Chemical Industry ETF (516570, with A/C: 020104/020105), with a latest scale of 2.952 billion yuan (as of March 13, 2026), a high-quality tool for capturing chemical chain price increase opportunities.

Direction 3: Bottom reversal of the cycle—Agriculture

Reason 1: Middle East conflict raises planting costs and risks supply disruptions, with imminent grain price increases. Oil is the source of fertilizers and agricultural fuel. Rising oil prices mean higher costs for fertilizers and farm machinery fuels, increasing production costs. Additionally, about one-third of global urea exports pass through the Strait of Hormuz. If this route remains blocked, global fertilizer supply will be severely impacted, possibly causing reduced crop yields. Meanwhile, the global grain stock-to-use ratio has fallen to a low of 23.8%, with fragile supply chains, putting upward pressure on grain prices and creating investment opportunities in planting.

Reason 2: Deep losses in the breeding industry, signaling industry bottoming out. The pig industry is experiencing a cold winter. Currently, pig prices in many regions have fallen below 5 yuan per jin (about 0.5 kg), the lowest in nearly two and a half years. More severely, costs for feed (soybeans, corn) are rising, and raising a pig now results in a loss of over 200 yuan. This deep and widespread loss has persisted for nearly six months, even the most profitable leading companies like Muyuan are losing money. Such extensive losses signal the industry’s bottom. Market expectations of losses may eliminate some farmers, reducing pork supply and supporting pig prices. Historically, 10-15 months of losses often trigger pig price rebounds. With nearly six months of losses, the cycle’s “midpoint” is near, and stock market rallies often lead pig prices by 8-10 months. Based on this, the expected turnaround point is within 3-6 months, making now the best window to position in the breeding sector.

The current representative index in agriculture is the China Securities Modern Agriculture Theme Index (930662.CSI), with holdings aligned with the agricultural price increase theme, including 50.1% in breeding (43.4% in pig breeding, 6.7% in meat chickens), 14% in planting, and 18% in feed, covering the three core sectors of pigs, planting, and feed.

The tracking ETF is the E Fund Agriculture ETF (562900), with a latest scale of 144 million yuan (as of March 11, 2026), an efficient tool to grasp this round of agricultural cycle reversal.