Lithium carbonate continues to surge! Huabao Fund Chemical Industry ETF (516020) rises nearly 1% intraday against the trend! Institutions: Free cash flow in the chemical industry is expected to continue increasing

The chemical sector saw choppy trading and consolidation today (March 30), reflecting the overall trend of the chemical sector. After opening, the Huabao Chemical ETF (516020), which tracks the chemical sector’s performance, quickly surged. During the session, the in-market price once rose by nearly 1%, before later pulling back. As of the time of writing, it was up 0.53%.

On the constituent stocks side, shares in segments such as lithium batteries, coatings, and pesticides had some individual stocks leading in gains. As of the time of writing, Sanshu Tree surged by nearly 6%, Yangnong Chemical Industry jumped by more than 4%, while several other stocks—including Luxi Chemical, Huafen Chemical, and Satellite Chemical—were up by more than 3% each.

On the news front, the Dalian Commodity Exchange’s main lithium carbonate contract broke through 160,000 yuan/ton. A recent research report from Dongguan Securities stated that in March, the lithium battery industry chain’s production schedules showed a significant recovery, and the April pre-scheduled production is expected to continue increasing month-on-month, indicating strong downstream demand. At the resource end, the ban on lithium mine exports in Zimbabwe has not yet been lifted, which adds uncertainty to supply and may provide price-supporting pressure for upstream materials. Looking across the full year, the supply-and-demand situation across the industry chain is expected to continue improving, with both volume and price rising in tandem likely.

Looking ahead, Guohai Securities noted that in China’s chemical industry, the difficulty of approving future incremental capacity is expected to increase, the growth rate of new capacity will slow down, and supply will continue to be optimized. Free cash flow in the chemical industry is expected to keep strengthening. Over the long term, the chemical industry’s potential dividend-paying ability is set to improve significantly. This will reprice China’s chemical industry, with China’s chemical industry potentially shifting from a “cash-eating monster” to a “cash cow.” At the same time, changes at the supply end will bring a stabilization and rebound in cyclical sentiment and an upward shift in the long-term benchmark. Chemical sector targets are expected to benefit from the advantages of both high upside volatility and high dividend yields.

How to seize opportunities in the chemical sector? Taking the route through the Huabao Chemical ETF (516020) may offer layout efficiency that is even higher. Public information shows that the Huabao Chemical ETF (516020) tracks the CSI Fundamental Sub-Industry Chemical Industry Theme Index. The combined weight of the petroleum and petrochemical sector + the basic chemical sector accounts for over 80%. Off-exchange investors can also gain exposure to the chemical sector through the Huabao Chemical ETF Connect Fund (Class A 012537 / Class C 012538).

Source: Shanghai and Shenzhen Stock Exchanges, etc., as of 2026.3.30.

Note: When investors apply for subscriptions or redeem fund shares, the subscription/redemption agent brokers may charge commissions according to a standard of no more than 0.5%, which includes relevant fees collected by the securities exchanges, the registration institutions, and so on. The Chemical ETF does not charge a sales service fee.

Huabao Chemical ETF Connect A subscription fee rate is: below 1 million yuan, 1%; 1 million yuan (including) to 2 million yuan, 0.6%; above 2 million yuan, 1,000 yuan per order. Redemption fee rate is: within 7 days, 1.5%; 7 days (including) to 180 days, 0.5%; 180 days (including) or more, 0%.

Huabao Chemical ETF Connect C redemption fee rate is: within 7 days, 1.5%; 7 days (including) or more, 0%. Sales service fee rate is 0.2%.

Note: Wind data shows that, according to the Shenwan first-level industry classification, as of 2026.2.27, in the CSI Fundamental Sub-Industry Chemical Index, the weights for the basic chemical industry and petroleum and petrochemical industries were 71.57% and 11.7%, respectively.

Risk Warning: Huabao Chemical ETF passively tracks the CSI Fundamental Sub-Industry Chemical Industry Theme Index. The index base date is 2004.12.31, and it was released on 2012.4.11. The index constituents’ composition is adjusted in a timely manner according to the index compilation rules, and its backtested historical performance does not indicate the index’s future performance. Stocks mentioned in the article are only presented objectively as examples among the index constituents and do not constitute any recommendation for any individual stock. They do not represent the fund management company’s viewpoint or fund investment direction. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of statements, etc.) is only for reference. Investors must be responsible for any investment actions they make independently. In addition, any viewpoints, analyses, and forecasts in this article do not constitute any form of investment advice to the readers, nor do they assume responsibility for any direct or indirect losses arising from the use of the content of this article. Investors should read carefully the fund legal documents such as the “Fund Contract,” “Prospectus,” and “Fund Product Information Summary” to understand the fund’s risk and return characteristics, and select products that are appropriate for their own risk tolerance. Past performance of the fund does not indicate its future performance. The performance of other funds managed by the fund management company does not constitute a guarantee of performance for this fund. Based on the fund management company’s assessment, Huabao Chemical ETF’s risk level is R3—medium risk. It is suitable for investors with balanced profiles (C3) and above. For any suitability matching opinions, please refer to the sales institution. Sales institutions (including the fund management company’s direct sales channels and other sales institutions) conduct risk evaluations for the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund management company. Suitability opinions from different sales institutions do not necessarily agree, and the risk level evaluation results of the fund products issued by the fund sales institutions must not be lower than the risk level evaluation results made by the fund management company. Differences exist in the fund contract regarding the fund’s risk and return characteristics versus the fund risk level due to different considerations. Investors should understand the fund’s risk and return situation, make a prudent selection of fund products based on their own investment objectives, time horizon, investment experience, and risk tolerance, and bear all risks themselves. The China Securities Regulatory Commission’s registration of the above funds does not imply any substantive judgment or guarantee regarding the fund’s investment value, market prospects, or returns. Fund investment involves risks and should be undertaken with caution.

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Responsible editor: Yang Ci