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

July 14, 2026 12:06 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. Investment indicators remain low and shares look Petrochemical Majors

generally undervalued. Investment appeal in Sumitomo Chemicals, as it focuses resources on accelerating growth in the Japan

Industry View Attractive

agrochemicals and IT-related sectors. OW on Sumitomo Chemical (4005), Mitsui Chemicals (4183), Asahi Kasei (3407); Electronic Chemicals

EW on Mitsubishi Chemical (4188), Tosoh (4042). Japan

Industry View In-Line

Fine Chemicals

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

semiconductors is also gradually recovering, and a steady growth trend continues. For silicon wafers, although user

inventory levels remain high, the recovery trend continues, centered on 300mm wafers. We are OW on Zeon (4205),