Huatai Securities: Improved price differences in the petroleum and chemical industry in January may help boost profit prospects.

Huatai Securities pointed out that by the end of January 26, the CCPI-raw material price difference was 2631, at the 15th percentile since 2012, an increase from 2500 points at the end of 25, affected by geopolitical conflicts in major oil-producing countries, international oil prices fluctuating upwards, overflow of sentiment on rising commodity prices, and increased demand for pre-holiday stockpiling before the Spring Festival, most chemical product price differentials improved over the previous period. In January, price increase products were mainly driven by expectations of growth in lithium batteries energy storage, support from rising oil prices, and the impact of cold waves in the northern hemisphere winter. We believe that industry profitability has already reached a bottom in recent years, and under the guidance of policies against "involution", supply-side adjustments are expected to accelerate, leading to a potential improvement in profitability for bulk chemical products. In the medium to long term, with the exit of high-energy-consuming facilities in Europe and America, economic growth in Asia, Africa and Latin America driving demand incrementally, overseas markets/exports have become important growth engines for the domestic chemical industry, and under supply-demand repair, the industry's outlook for 26 is expected to improve.