Supply shortages lead to higher sulfur prices; focus on the petrochemical ETF Huaxia (159731) for bottom-up investment opportunities.

SadMoneyMeow · 2026-04-03T09:02:09+00:00

As of April 3rd, the Petrochemical ETF Huaxia (159731) decreased by 0.9%, but the holdings performed strongly. In 2023, China's sulfur prices continued to rise due to supply shortages, with industry analysis attributing the trend mainly to the "Nord Stream" pipeline incident and international conflicts. Huatai Securities pointed out that the reasons for the supply decline include Russia's production cuts and low sulfur content in North America. Additionally, the Petrochemical ETF closely tracks the CSI Petrochemical Industry Index, which includes several leading domestic companies.

SadMoneyMeow

2026-04-03 09:02:09

Abstract generation in progress

As of 2:00 PM on April 3, Huaxia Petrochemical ETF (159731) is down 0.9%. Its holdings, including Shengquan Group, Haohua Technology, Hengyi Petrochemical, Tongcheng New Materials, and Hangyang Shares, are leading gains.

Since the middle of 2023, China’s sulfur prices have continued to rise. According to Bairun Yinfufu, on March 27 the domestic sulfur quotation was 5,415 yuan/ton, which is up 681% from the low point in July 2023. Industry analysts say that unlike in 2007 and 2021, this round of sulfur price increases is mainly caused by insufficient supply, with downstream production units being forced to accept it passively. By-products from crude oil refining and natural gas processing are the main sources of global sulfur supply.

Huatai Securities believes that the main reason for the decline in sulfur supply this round is that after the explosion of the “Nord Stream” pipeline, Russia’s western-region sour natural gas production was reduced, and at the same time, Russia’s crude oil—affected by sanctions—saw a decline in processing volumes; this is compounded by the fact that North American shale oil and shale gas have lower sulfur content. After the outbreak of the conflict between the U.S. and Iran, the global sulfur supply gap was further exacerbated.

Huaxia Petrochemical ETF (159731) and its linked funds (017855/017856) closely track the CSI Petrochemical Industry Index. Driven by both basic chemicals and petroleum & petrochemicals with two-wheel drive, they also cover high-dividend and high-growth assets. The constituent stocks include Wanhua Chemical (global MDI leader), China National Petroleum (domestic oil and gas leader), Sinopec (domestic refining and petrochemicals leader), Salt Lake Shares (domestic potash fertilizer leader), among others.

Daily Economic News

(Editor: Guo Jiandong)

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