The long-term logic of biodiesel entering a phase of rising volume and price holds; focus on the long-term layout window for the Petrochemical ETF Huaxia (159731).

As of 10:50 on July 22, the CSI Petrochemical Industry Index rose strongly by 2.26%, with more gainers than losers among its constituent stocks. Tongkun Shares, Zangge Mining, Hengli Petrochemical, and Arkan International led the gains.

On local time July 21, U.S. President Trump stated that the United States would soon launch strikes against the underground "Hao Mountain" facility south of Natanz in Iran, describing the anticipated attacks as "very intense." On the same day, Iran's Khatam al-Anbiya Central Command issued a statement declaring that if the U.S. attacks Iranian nuclear facilities, Iran would retaliate against U.S. interests. Iran stated that any U.S. attack would be viewed as an escalation of war.

Huaxin Securities noted that current U.S.-Iran negotiations have reached a deadlock, and the geopolitical conflict landscape remains unchanged. Brent and WTI crude oil prices saw weekly gains exceeding 15%. It is expected that oil prices will fall back to $70-80 per barrel after a ceasefire agreement is signed between the U.S. and Iran; however, if conflicts resume, oil prices are likely to surge again. Affected by Middle East tensions, helium will face a global shortage for at least 2-3 months. Biodiesel is entering a long-term phase of rising volume and price. Rising oil prices and geopolitical conflicts are driving up food prices, suggesting that a major cycle for agrochemicals will arrive in 1-2 years, with widening fertilizer spreads and increased pesticide demand being highly probable.

The Huaxia Petrochemical ETF (159731) and its feeder funds (017855/017856) closely track the CSI Petrochemical Industry Index. According to Shenwan Level I industry distribution, chemical products account for 28.8%, refining and trade account for 24.6%, and agrochemical products account for 20.6%. A new round of industry prosperity has begun, and profit recovery and improvement for downstream chemical products are in sight.