Middle East conflict sparks supply concerns; the chemical industry's price increase logic is expected to be further confirmed

LootboxPhobia · 2026-03-02T04:43:30+00:00

The escalation of the Middle East conflict has disrupted logistics through the Strait of Hormuz, leading to tight sulfur supplies and triggering bullish market sentiment, especially during the spring planting season when demand for phosphate fertilizers increases. At the same time, methanol imports may be affected, and prices face upward risk. Zhongtai Securities pointed out that changes in the situation will enhance the safe-haven logic of precious metals, and related resource sectors are expected to benefit.

LootboxPhobia

2026-03-02 04:43:30

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The conflict in the Middle East has escalated, disrupting logistics through the Strait of Hormuz, raising concerns over sulfur supply. Industry insiders told Caixin that this is a critical period for spring farming preparations, with a rigid demand for sulfur in phosphate fertilizers. Market expectations of shipping disruptions and rising freight rates may rekindle bullish sentiment in the sulfur market.

Additionally, the outbreak of conflict in the Middle East could impact methanol imports. “If import volumes decrease later, methanol prices could rise rapidly,” said a methanol industry professional in Shandong to Caixin.

CICC Securities pointed out that the situation in the Middle East further escalated over the weekend, strengthening the safe-haven narrative for precious metals. Meanwhile, the RMB exchange rate continues to appreciate, and the valuation of blue-chip equities is expected to rise. If the government work report at the Two Sessions emphasizes policies to expand domestic demand and stabilize growth more than expected, cyclical resource sectors will benefit most directly. The price increase logic for non-ferrous metals, chemicals, and steel is likely to be further confirmed.

According to Caixin’s thematic database, among related listed companies:

Rongsheng Petrochemical has an annual sulfur production capacity of 1.21 million tons, ranking third nationwide, only behind Sinopec and PetroChina.

Baofeng Energy is a leading coal-based methanol producer with a capacity of about 7.4 million tons per year. The company is promoting the “liquid sunlight” technology, with a production cost per ton below the industry average by 300-500 yuan.

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