The acceleration of overseas chemical production capacity withdrawal highlights the reliability of China's supply chain. Investors should pay attention to low-cost chemical industry ETFs like E Fund (516570) for investment value.

As of the close, the CSI Petrochemical Industry Index rose 3.3%, while the CSI Rare Earth Industry Index rose 2.2%. Wind data shows that the chemical industry ETF by GF Fund (516570, feeder fund A/C: 020104/020105) applies the lowest management fee of 0.15% per year within the ETF tier, the lowest tier among its peers.

On the news front, energy prices surged sharply in Europe, Japan and South Korea, pushing up production costs and driving faster exit of overseas chemical production capacity. Leveraging a diversified raw-material sourcing system, mature replacement processes, economies of scale, and cost advantages, China’s chemical industry remains the stronger-resilience segment within the global chemical supply chain. The potential acceleration of overseas chemical production capacity exits will be beneficial for China’s chemical industry to increase its market share across the world.

Daily Economic News

(Editor: Liu Chang)

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