Recently, the chemical market has continued to fluctuate and rise. As of mid-September, the current round of chemical market growth has lasted for about three months, creating the strongest growth performance of the year. The cost side of the recent rise in the chemical market is still relatively strong. Oil prices have closed higher on five days in the past week, and both oils have surged above US$90/barrel, showing that investors are bullish on oil prices, which is important for petrochemical products. The cost support is further enhanced. From a macro perspective, in addition to the real estate package boosting market confidence, in order to consolidate the foundation for economic recovery and maintain reasonable and sufficient liquidity, the central bank lowered the deposit reserve ratio of financial institutions by 0.25 percentage points on September 15. This reduction is expected to release more than 500 billion yuan of medium- and long-term liquidity. This reduction will guide social expectations and boost market confidence, and will also help improve macro expectations of the commodity market. On the supply side, the overall chemical industry start-up has been at a relatively low level recently. In addition, the industry has been in the process of destocking in the early stage, so the supply level also has support for some products. From the demand side, although the marginal recovery in consumption is limited, the market may be stocking up as the Mid-Autumn Festival and National Day holidays approach. The above factors will support the strong performance of the chemical market in the short term.
