Chemical stocks strengthened during Tuesday's trading session, with lithium battery, potash, and petrochemical sub-sectors leading the gains. Senior Technology Material Co Ltd climbed over 6% by the close, while Zangge Mining Co Ltd, Oriental Iron Tower Co Ltd, Asia Potash International Investment Co Ltd, and Rongsheng Petrochemical Co Ltd each advanced more than 4%. Hangzhou Hangyang Co Ltd, Junzheng Group Co Ltd, and Lomon Billions Group Co Ltd were also among the notable gainers.
On the news front, production scheduling in the lithium battery supply chain continues to recover, with industry data indicating that domestic lithium battery production schedules for September are expected to grow 9.2% month-over-month. Overseas energy storage orders are being released in concentration, with multiple battery manufacturers securing large-scale international storage contracts. Some cell prices are showing early signs of stabilization and recovery.
Analysts suggest that with robust energy storage demand both domestically and overseas, combined with the year-end export peak season, production schedules across the supply chain are likely to keep rising in the second half of the year. The energy storage and power battery segments hold room for both volume and price recovery.
Some institutions also note that demand in the photovoltaic industry is gradually bottoming out, while supply-side backward production capacity is accelerating its exit. Industry competition is shifting toward technological prowess, and leaders with strong technology and market position advantages are expected to see profitability recover first.
From a valuation perspective, data as of Monday's close shows that the benchmark index for the Huabao Chemical ETF (516020) — the Sub-Chemical Industry Index — carries a price-to-book ratio of 2.46 times, sitting at the 45.4th percentile of the past decade, a relatively reasonable level that offers solid medium-to-long-term allocation value.
The Sub-Chemical Industry Index's returns over the past five full calendar years were: 41.09% in 2025, -3.83% in 2024, -23.17% in 2023, -26.89% in 2022, and 15.72% in 2021. Its volatility over the same periods was 20.43% in 2025, 30.05% in 2024, 15.07% in 2023, 24.99% in 2022, and 32.02% in 2021.
Looking ahead, analysts believe the chemical sector has entered a prime investment zone, favoring the global supply anti-involution cycle and the global AI demand cycle. As the industry's peak season approaches, rising demand will become the key marginal variable, enhancing profitability for chemical companies. Investors should focus on opportunities where demand, value, and supply improvements align simultaneously.
For investors seeking to capture the chemical sector's rebound, the Huabao Chemical ETF (516020) may offer a more efficient route. Public information shows the fund tracks the CSI Sub-Chemical Industry Theme Index, whose constituents span popular themes including AI computing power, anti-involution, robotics, and new energy. Off-exchange investors can also participate through the Huabao Chemical feeder funds (Class A: 012537, Class C: 012538).
Risk disclosure: The Huabao Chemical ETF (516020) passively tracks the CSI Sub-Chemical Industry Theme Index, which uses a base date of December 31, 2004, and was published on April 11, 2012. Index constituent composition adjusts according to the index methodology, and historical back-tested performance does not indicate future index returns. Companies mentioned in this article are merely objective displays of index constituents and do not constitute stock recommendations or represent fund manager or fund investment directions. Any information appearing herein is for reference only, and investors bear sole responsibility for their independent investment decisions. Views, analyses, and forecasts in this article do not constitute investment advice of any form, and no liability is assumed for direct or indirect losses arising from use of this content. Investors should carefully read fund legal documents including the fund contract, prospectus, and fund product summary to understand risk-return characteristics and select products matching their risk tolerance. Past fund performance does not predict future returns, and performance of other funds managed by the manager does not guarantee this fund's performance.