CITIC Securities: Crude oil prices may 迎来 a turning point in supply and demand relationship, and the overall investment safety margin of the chemical sector is relatively high

According to the Zhitong Finance APP, CITIC Securities released a research report stating that in 2025, the energy and chemical sectors will still face significant challenges amid increasing policy uncertainties both domestically and internationally. In the energy sector, the firm believes that 2025 may see a turning point in the supply-demand relationship for crude oil. Due to slow global demand growth and rapid production increases from OPEC, the United States, and South America, it is expected that crude oil prices will fluctuate between $65 and $75 per barrel. The report also suggests paying attention to the impact of Trump's energy policies on U.S. production, changes in policies towards Russia, Iran, and Venezuela, as well as shifts in demand from major global economies like China and the United States, all of which will disrupt oil prices. In the chemical sector, the firm focuses on segments with good market structure, low costs, and incremental growth from overseas expansion. The new materials sector, driven by trends in AI and new energy, is unstoppable, with materials being a key support. For example, areas such as silicon-based anodes, composite current collectors, conductive carbon black, advanced packaging, high-frequency and high-speed resins, electronic skin, and SAF.

The main viewpoints of CITIC Securities are as follows:

Energy sector: Crude oil prices may reach a turning point in the supply-demand relationship, while natural gas prices fluctuate with demand.

The firm believes that 2025 may see a turning point in the supply-demand relationship for crude oil, as global demand grows slowly and production from OPEC, the United States, and South America increases rapidly. The firm expects crude oil prices to fluctuate between $65 and $75 per barrel. Attention should also be paid to the impact of Trump's energy policies on U.S. production, changes in policies towards Russia, Iran, and Venezuela, as well as shifts in demand from major global economies like China and the United States, all of which will disrupt oil prices. The firm expects natural gas prices in 2025 to range from €20 to €50 per megawatt-hour, with a focus on demand recovery and supply disruptions.

Chemical sector: The firm focuses on segments with good market structure, low costs, and incremental growth from overseas expansion.

At this point, the chemical sector is overall at the valuation bottom and profit bottom, with a high safety margin for investment. The firm is optimistic about investment opportunities in the sector after the macroeconomic fundamentals recover, especially with the expected growth in chemical product demand driven by consumption policies. The supply side is limited by capacity in the civil explosives sector, which is guided by policies to strengthen leading enterprises, leading to further industry concentration. The organic silicon industry is expected to end its capital expenditure phase in 2025 and enter a capacity digestion stage, with profits likely to improve. There may still be gaps in the supply and demand for viscose filament and short fibers. According to an announcement from the Ministry of Ecology and Environment, the third-generation refrigerants will officially enter the "quota era" in China in 2025, and these products have significant profit elasticity and are worth attention. The cost advantage of chemical products is one of the most competitive attributes, with coal-to-olefins and ethane cracking to ethylene maintaining a continuous cost advantage, likely to sustain profitability in 2025. China's chemical products for overseas markets are diverse, emphasizing cost-performance advantages while also having high added value. Against the backdrop of rising priorities for de-globalization and supply chain security in international trade, the urgency for products to go overseas is increasing. The firm is optimistic about leading enterprises in various sub-sectors enjoying excess profits through overseas capacity expansion, such as in the tire industry.

New materials sector: The industrial trends led by AI and new energy are unstoppable, with materials being a key support. The demand for silicon-based anodes is expected to enter a stage of rapid growth; the aluminum and copper foil sectors of composite current collectors are performing well, with cost and performance advantages gradually being released; the domestic substitution of conductive carbon black is underway; there is strong demand for advanced packaging, focusing on material transformation and domestic opportunities; breakthroughs in the localization of key materials for advanced packaging substrates, such as ABF film, continue; the resin material system is iterating, with high-frequency and high-speed resins developing rapidly; the development of AI terminals is expected to drive a new round of development opportunities for thermal management materials; the electronic skin sector has a long way to go, and carbon-based materials have a promising future; the development of controlled nuclear fusion will nurture related investment opportunities, with a focus on structural materials and superconducting materials; green low-carbon materials mainly focus on SAF, waste plastic cracking, and waste chemical fiber recycling.

Investment Strategy:

1. Focus on oil and gas dividends: Oil and gas companies have high profits and strong dividend attributes.

2. Focus on sectors with good patterns such as civil explosives, organic silicon, viscose short fibers, viscose filaments, and refrigerants.

3. Focus on coal-to-olefin companies with significant cost advantages.

4. Focus on going overseas: Strongly recommend leading tire companies as pioneers in the chemical industry going overseas, leading natural vanillin companies building factories in Thailand and focusing on the European and American markets, and suggest paying attention to leading plastic dining utensil companies with multiple projects blooming in the U.S. and Thailand.

5. Pay attention to investment opportunities in materials fields brought by lithium battery new energy, AI, and robotics, such as advanced packaging, thermal management materials, electronic skin, and commercialized controlled nuclear fusion, as well as green low-carbon materials like aviation fuel. The domestic substitution of conductive carbon black is continuously advancing. With the continuous advancement of AI technology, the consumer electronics industry is entering a new technological upgrade cycle. Against the backdrop of significant improvements in computing power, efficient thermal management is essential to keep chips and other electronic components operating within suitable temperature ranges, recommending graphite film suppliers; recommending mergers and acquisitions of etching component suppliers, and suggesting attention to companies that have achieved industrialization of ultra-thin VC heat spreaders; wholly-owned subsidiaries with etching component suppliers; companies in the high-frequency and high-speed resin field. The firm is optimistic about the new investment opportunities brought by the development of controlled nuclear fusion for related materials, suggesting attention to ITER component suppliers; superconducting material-related targets. In terms of green low-carbon, the firm believes that global market demand and scale for SAF will experience explosive growth in the coming decades.

Risk Factors:

Significant fluctuations in crude oil or natural gas prices; increasing turmoil in overseas political situations; domestic macro policies and economic recovery falling short of expectations; new technology research and development and application progress not meeting expectations; overseas development of products not meeting expectations; technology promotion and application not meeting expectations