Chemical sector stocks have been on a sustained upward trajectory since November, driven by rising prices of lithium battery materials and industry-wide efforts to curb excessive competition. Despite a broader market decline in A-shares today, the chemical sector continued its rally. As of November 11, over 60% of the 432 chemical stocks tracked by Tonghuashun posted gains, with notable performers including Liaoning Oxiranchem, Inc (300082.SZ), Swancor Advanced Materials Co.,Ltd. (688585.SH), Changhua Chemical Technology Co.,Ltd. (301518.SZ), Zhejiang Realsun Chemical Co.,Ltd. (301212.SZ), and Longkou Union Chemical Co.,Ltd. (301209.SZ), all hitting the daily limit-up.

The phosphorus chemical sub-sector (index: 885863) stood out, rising for five consecutive trading days since November 5 and closing 0.97% higher on November 11. Nearly 70% of stocks in this segment advanced, with Henan Qingshuiyuan Technology Co.,Ltd. (300437.SZ), Hubei Hongyuan Pharmaceutical Technology Co.,Ltd. (301246.SZ), and Tonze New Energy Technology Co.,Ltd. (002759.SZ) gaining over 5%. Fluorochemical and organic silicon concepts also showed strength, exemplified by Sunvim Group Co.,Ltd. (002083.SZ) hitting the limit-up and Tangshan Sunfar Silicon Industries Co.,Ltd. (603938.SH) surging 9.99%.

Phosphorus and fluorochemicals supply critical raw materials for lithium batteries, particularly for lithium iron phosphate (LFP) cathode production. Lithium hexafluorophosphate (LiPF6), a core battery material, saw its midpoint price rebound to 119,800 yuan/ton on November 11—a 140% increase from July’s low of under 50,000 yuan/ton, according to Shanghai Steel Union data. This recovery aligns with booming energy storage demand, which drove Q3 2025 China’s energy storage lithium battery shipments to 165 GWh (up 65% YoY), per Green Globe International, Inc. (GGII) estimates. Full-year shipments are projected at 580 GWh, growing over 75%.

Liaoning Oxiranchem, Inc (300082.SZ), today’s sector leader with a 20.04% gain, has pivoted toward lithium battery materials like polyglycols for cathode applications, supplying firms such as Fulin Precision Industrial. Other battery-linked gainers included Zhejiang Realsun Chemical Co.,Ltd. (301212.SZ), which produces propyl propionate for electrolytes, and Zhejiang Yongtai Technology Co.,Ltd. (002326.SZ), active in lithium salts and electrolytes.

Industry-wide "anti-overcapacity" measures are further supporting the sector’s rebound. At a November 5 caprolactam industry meeting, producers agreed to cut output by 20% temporarily and raise prices by 100 yuan/ton. Earlier, regulators convened forums to address polytrimethylene terephthalate (PTA) and bottle-grade chip oversupply risks. A seven-ministry September 2025 policy aims for 5%+ annual growth in petrochemical value-added output through 2026, emphasizing controlled capacity expansion in refining, ethylene, and paraxylene.

Analysts highlight valuation potential in fluorine, silicon, and phosphorus segments, citing limited supply growth and demand tailwinds from semiconductors and AI materials. The China Chemical Product Price Index (CCPI) remained depressed at 3,958 points as of September 30, down 10% YoY, while Q1-Q3 2025 industry profits fell 4.4% despite 1% revenue growth, per National Bureau of Statistics data—underscoring the sector’s cyclical trough and nascent recovery prospects.