Geopolitical Conflict Boosts Chemical Prices: Methanol Hits Limit-Up Multiple Times, Iran Accounts for 22.86% of International Capacity

The impact of Middle East geopolitical Conflicts on gas-based chemical products is spreading throughout the industry chain. On March 3, the domestic chemical futures market saw collective sharp increases, with the main methanol contract hitting the limit-up for two consecutive days. Plastic and polypropylene main contracts also hit limit-up, while the pure benzene main contract rose 6.76%.

The core logic behind this price surge is supply risk: Iran, as a major global chemical producer, faces uncertainty regarding both its plant operations and transportation routes. According to data from Longzhong Information, as of February 2026, Iran's methanol plant capacity totaled 17.39 million tonnes per year, accounting for 59.78% of total Middle East methanol capacity and 22.86% of international methanol capacity excluding China.

For urea, Iran exported approximately 4.5 million tonnes in 2024, ranking third globally. Ongoing tensions in the Middle East have pushed up international fertilizer prices, with Middle East urea FOB prices rising sharply week-on-week, posing a potential threat to the global food supply chain.

Sulfur shows even higher import dependence—approximately 56.2% of China's sulfur relies on imports, while about half of global sulfur exports must pass through the Strait of Hormuz. If transportation remains disrupted, domestic downstream industries such as phosphate fertilizers and sulfuric acid will face significant cost pressures.

Analysts point out that based on Iran's abundant oil and gas resources, the country has industrial advantages in certain bulk chemical sectors, holding a pivotal position in the global supply chain. Brokerages believe that against the backdrop of escalating geopolitical situations, the market worries on one hand that Iranian domestic plant operations may be affected, causing actual output damage, while on the other hand transportation disruptions may also lead to actual import volume reductions and related expectations, likely pushing product prices upward.

On the A-share market, over 30 listed companies are involved in products such as methanol, urea, and sulfur. Baofeng Energy is projected to achieve net profit attributable to parent company of RMB 11-12 billion in 2025, a year-on-year increase of 73.57% to 89.34%; Eastern Petrochemical has sulfur production capacity of 600,000 tonnes per year.