The ongoing turmoil in the Middle East continues to disrupt, sparking another wave of limit-up rallies in the chemical sector.

Geopolitical conflicts in the Middle East continue to escalate, directly impacting the supply side of the petrochemical industry chain. As a result, chemical sector stocks and chemical commodities in the A-share market have surged strongly.

On April 7, according to Xinhua News Agency, Israel carried out an airstrike on Iran’s largest petrochemical complex, claiming that over 85% of Iran’s petrochemical export capacity has been severely damaged. Meanwhile, according to Iran’s Fars News Agency, an explosion occurred in the Jubail Industrial Zone in northeastern Saudi Arabia—one of the world’s major petrochemical production bases—having suffered extensive attacks.

Both major production areas were attacked on the same day, rapidly intensifying market concerns about the global petrochemical supply. Today, the leading futures contracts for domestic chemicals, including ethylene glycol, methanol, and propylene, have sharply rallied, with some reaching limit-up. The A-share market responded in tandem, with the chemical sector leading the gains across the board, while sub-sectors such as chemical fibers, chemical raw materials, and petrochemicals saw collective breakout performance.

Israel airstrikes the core of Iran’s petrochemical sector, supply shock hits export lifeline

According to Xinhua News Agency, the Israel Defense Forces declared on the 6th that they carried out an airstrike on a large petrochemical facility in the Asaluyeh region of southern Iran, which is Iran’s largest petrochemical complex. Israeli Defense Minister Katz also confirmed this news.

The Israeli military stated that this strike was the second round of attacks on two major Iranian petrochemical complexes, following previous actions, and has cumulatively resulted in over 85% of Iran’s petrochemical export capacity being seriously damaged.

According to Iranian media reports, oil and chemical plants in Asaluyeh and South Pars, Bushehr Province, were "attacked by enemy forces," with multiple explosions heard. Tasnim News Agency quoted local officials as saying that petrochemical production installations in Asaluyeh were damaged in the attack, with the extent of the damage currently under investigation.

Saudi Jubail Industrial Zone attacked, 6%-8% of global petrochemical capacity at risk

According to Xinhua News Agency citing Iran's Fars News Agency, in the early hours of the 7th, an explosion occurred in the Jubail Industrial Zone in northeastern Saudi Arabia, in which American capital participates, suffering large-scale attacks.

The Jubail Industrial Zone is one of the world's key petrochemical production bases, producing about 60 million tons of petrochemical products annually, which accounts for 6%-8% of global output.

The area is home to multiple major petrochemical companies, including Saudi Basic Industries Corporation (SABIC), the Sadara project involving American chemical giant Dow, and joint ventures between Saudi Aramco and French TotalEnergies.

Analysts point out that the simultaneous hit to both Iranian and Saudi major production areas has significantly increased market concerns about the stability of Middle Eastern petrochemical supply.

Chemical futures soar collectively, ethylene glycol hits limit-up

Geopolitical shocks have rapidly transmitted to the commodity markets.

Ethylene glycol, methanol, and propylene are important basic chemical raw materials, widely used in downstream industrial chains such as polyester, plastics, and synthetic fibers. The Middle East is a major export source for these products, and uncertainty on the supply side has prompted markets to repricing.

This afternoon, the leading ethylene glycol contract on the Dalian Commodity Exchange hit its limit-up, closing at 5,706 yuan/ton, up about 11%; the leading methanol contract on the Zhengzhou Commodity Exchange rose 9%; the lead propylene contract on the Zhengzhou Commodity Exchange rose as much as 7%.

Meanwhile, chemical stocks became the leading sector in the A-share market today, with chemical fiber, chemical raw material, and petrochemical sub-sectors posting the biggest gains. The combined forces of supply shocks, price hike expectations, and policy catalysts have together propelled the chemical sector to stand out in today’s market.

In addition, according to a Wallstreetcn article, the impact of geopolitical tensions is gradually spreading from the energy sector to the chemical and high-end manufacturing supply chains.

Multiple global chemical companies have announced price increases—American chemical giant Dow has doubled the previously announced polyethylene price hike; Germany’s Wacker Chemie AG has comprehensively raised prices for silicone products, involving approximately 2,800 products.

Policy support is also forming. Recently, seven departments including the Ministry of Industry and Information Technology jointly released the “Action Plan for Upgrading and Renovating Old Petrochemical and Chemical Facilities (2026–2029),” which aims to fully complete the upgrade task for old petrochemical and chemical facilities in various regions by 2029, providing policy backing for mid- and long-term industry demand.

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