Chemicals: Industry Reshuffling also Gaining Steam amid an AI-driven Market

Research evidence excerpt

Chemicals: Industry Reshuffling also Gaining Steam amid an AI-driven Market

Foundation

June 24, 2026 09:25 AM GMTM

Investor Presentation | Japan Morgan Stanley MUFG Securities Co., Ltd.+ Takato Watabe

Equity Analyst

Chemicals: Industry Reshuffling also Gaining Takato.Watabe@morganstanleymufg.comRyoichi Watanabe +81 3 6836-5436

Ryoichi.Watanabe@morganstanleymufg.com +81 3 6836-8929

Steam amid an AI-driven Market Kayoko Shoji

Research Associate

Kayoko.Shoji@morganstanleymufg.com +81 3 6836-5437

Kano Fujita

Kano.Fujita@morganstanleymufg.com +81 3 6836-8932

l Petrochemical majors (Industry View: Attractive): Expecting continued weak petrochemical demand and ethylene

utilization rates, but in addition to China’s anti-involution policies, there are signs of naphtha cracker downsizing in South

Korea; believe the overall mood is improving. Asia petchem prices and spreads unlikely to fall further, but probably lack

recovery momentum. Added impetus for industry reorganization. Petchem prices surged, given the situation in the Petrochemical Majors

Middle East. Investment indicators remain low and shares look generally undervalued. Investment appeal in Sumitomo Japan

Industry View Attractive

Chemicals, as it focuses resources on accelerating growth in the agrochemicals and IT-related sectors, coupled with a V- Electronic Chemicals

shaped recovery in earnings from its pharmaceutical subsidiary. OW on Sumitomo Chemical (4005), Mitsui Chemicals Japan

Industry View In-Line

(4183), Asahi Kasei (3407); EW on Mitsubishi Chemical (4188), Tosoh (4042). Fine Chemicals

Japan

l Electronic chemicals (Industry View: In-line): In addition to the expansion of AI semiconductors, demand for legacy

semiconductors is also gradually recovering, and a steady growth trend continues.