The Middle East situation continues to cause turmoil, and the chemical sector is once again hitting the daily limit.

Middle East geopolitical tensions continue to escalate. The petrochemical industry’s upstream supply side has taken a direct hit, and China’s A-share chemical sector and chemical commodities have surged strongly in response.

On April 7, according to a report by Xinhua News Agency, Israel carried out an airstrike on Iran’s largest petrochemical integrated complex and claimed that it severely damaged more than 85% of Iran’s petrochemical product export capacity. At the same time, Iran’s Fars News Agency reported that an explosion also occurred in the Jubail Industrial Zone in northeastern Saudi Arabia—a major global petrochemical production base—due to a large-scale bombardment.

The two production areas were attacked on the same day, sharply increasing market concerns about global petrochemical supply. Today, in China, futures for chemical products such as ethylene glycol, methanol, and propylene saw major upward jumps, with some reaching the daily limit. The A-share market responded in tandem: the chemical sector led the entire market, and sub-sectors including chemical fibers, chemical feedstocks, and petrochemicals collectively surged.

Israel’s airstrike hits Iran’s petrochemical core; the supply shock directly targets the lifeline of exports

According to Xinhua News Agency, in a statement made on the 6th, the Israeli Defense Forces said that on the same day, Israeli forces carried out an airstrike on a large petrochemical integrated facility in the Assaluyeh area in southern Iran. The facility is Iran’s largest petrochemical integrated complex. Israel’s Defense Minister Katz also confirmed the report.

The Israeli military statement said the strike was the second round against Iran’s two major petrochemical integrated complexes following earlier actions, and that cumulatively it has severely damaged more than 85% of Iran’s petrochemical product export capacity.

According to reports from Iranian media, oil and petrochemical plants in Assaluyeh in Bushehr Province and in South Pars were “attacked by enemy forces,” and reports said multiple explosions were heard. Tasnim News Agency cited local officials as saying that petrochemical production installations in Assaluyeh were hit and damaged, and investigations are currently underway into the extent of the damage.

A strike on Saudi Arabia’s Jubail Industrial Zone threatens 6% to 8% of global petrochemical capacity

According to a report by Xinhua News Agency citing Iran’s Fars News Agency in the early hours of the 7th, a large explosion occurred that day in the Jubail Industrial Zone in northeastern Saudi Arabia, involving U.S. capital, and it was the result of a large-scale bombardment.

The Jubail Industrial Zone is one of the world’s important petrochemical production bases. Its annual output is about 60 million tons of petrochemical products, accounting for 6% to 8% of global total output.

A number of large petrochemical enterprises are concentrated in the area, including the Sadara project involving Saudi Basic Industries Corporation and U.S. Dow Chemical Company, as well as projects jointly invested in by Saudi Aramco and French energy company TotalEnergies.

Analysts noted that Iran and Saudi Arabia’s two major production regions were hit sequentially within the same time window, significantly intensifying market concerns about the stability of Middle East petrochemical supply.

Chemical commodity futures surge across the board; ethylene glycol hits the daily limit

Geopolitical shocks quickly transmitted to the commodities market.

Ethylene glycol, methanol, and propylene are all important basic chemical feedstocks, widely used in downstream industry chains such as polyester, plastics, and synthetic fibers. The Middle East is a key source of exports for these products, and uncertainty on the supply side directly pushes the market to reprice.

This afternoon, Dalian Commodity Exchange’s benchmark ethylene glycol futures contract hit the daily limit, quoted at 5706 yuan/ton, up about 11%. Zhengzhou Commodity Exchange’s benchmark methanol futures contract rose 9%. Zhengzhou Commodity Exchange’s benchmark propylene futures contract was up as much as 7% at one point.

Meanwhile, chemical stocks became the A-share market’s leading sector that day, with sub-sectors such as chemical fibers, chemical feedstocks, and petrochemicals posting relatively strong gains. With the combination of supply shocks, expectations of price increases, and policy catalysts, the chemical sector stood out in that day’s market.

In addition, according to an article from Wall Street Insights (Wall Street Seen and Heard), the impact of heightened geopolitical tensions is gradually spreading from the energy sector into the chemical and high-end manufacturing industry chains.

Several global chemical companies have already announced price increase plans—U.S. chemical giant Dow Chemical raised its polyethylene price increase to twice the level it previously announced; Germany’s Wacker Chemie increased prices across its organosilicon products comprehensively, covering about 2,800 products.

Support also came from the policy level. Recently, seven departments including the Ministry of Industry and Information Technology jointly issued the “Action Plan for Accelerating the Replacement and Upgrading of Old and Obsolete Installations in the Petrochemical and Chemical Industry (2026–2029),” which proposed that by 2029, all replacement and upgrading tasks for old and obsolete petrochemical and chemical installations identified in each region would be completed comprehensively, providing policy backing for the industry’s medium- to long-term demand.

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