Policy weathervane: price law revision how to reconstruct the competitive landscape of the chemical industry.

Policy core: the establishment of cost pricing mechanism on July 24, 2025, the National research and Reform Commission issued a draft amendment to the Price Law (draft to comments), marking a major shift in the pricing mechanism of the Chinese market. In the 10 articles of the draft amendment, the word "cost" appears seven times, covering core provisions such as dumping below cost, substantial price increases above cost, and pricing at average social cost, completely changing the market pricing logic dominated by supply and demand in the past. But In my experience, This change has profound implications to the chemical sector. And The traditional supply and demand-driven pricing model will be replaced by a new mechanism dominated by cost factors, and the price fluctuations of basic raw materials such as crude oil, coal and natural gaseous will be immediately rigidly transmitted to the end items, and the market will lose the elastic space to adjust supply and demand independently through price. Market reconstruction: sector differentiation under the affect of three price System Remodeling and Regional Pattern Change the cost pricing mechanism will redefine the chemical price system. Market prices are limited to fluctuate within a reasonable range on a cost basis, and overuse price deviations are at risk of illegality. Based on my observations, This will lead to a signifiis able tot reduction inter-regional spreads, a reduction in cross-regional liquidity of items, and a compression of the traditional geographic arbitrage space. to different product types, the impact shows structural differentiation: high-end new material items might continue to rise in price due to high technical costs, however demand development might lag behind cost increases, resulting in a decline in operating rates; general chemicals such as polypropylene, PVC, etc. Due to overcapacity and cost transparency, prices will be compressed to near the cost line, and profit margins will be extremely narrowed. Deep Adjustment of Enterprise Competition Pattern cost transparency will accelerate the sector reshuffle. With the advantages of integration, circular economy model and methodology accumulation, the head companies have signifiis able totly better cost manage ability than small and medium-sized companies, and will obtain excess profits and further concentrate their market share under the new pricing mechanism. The difference of manufacturing process will have become the watershed of life and death. And In the pure alkali sector, to instance, the ammonia alkali method is greater expensive than the natural alkali method and faces the risk of elimination under the cost pricing model. At the same time, research and research investment in low-margin items such as traditional plastics, coatings and plasticizers might decline, and the driving force to technological innovation will weaken. Generally speaking international competitive strategy transformation the international competition strategy of Chinese chemical companies will shift from "seizing the market at low price" to "cost transparent competition". Cost-vulnerable items such as fertilizers and basic plastics might lose their international competitive advantage, while high-tech items such as lithium battery materials, semiconductor packaging materials and photovoltaic materials will continue to develop overseas markets by virtue of their technological advantages. According to research Profitability: a new stability under structural differentiation high-end methodology premium highlights in high-end fields such as electronic chemicals, lithium battery materials and semiconductor packaging adhesives, technical barriers provide companies with cost manage advantages and pricing voice. The head company is able to maintain a high level of profitability under the cost pricing framework through patented methodology and process optimization. Photovoltaic sealing film, power battery electrolyte and other rapid development in demand to sub-areas, prices and costs of synchronous upward direction is obvious. Basic chemicals profit margins narrowed the underlying chemicals with overcapacity face a double squeeze: transparency in the cost structure limits the room to price increases, while weak demand on the consumer side inhibits volume development. The profit margins of bulk items such as ethylene glycol and styrene will be further compressed, and the overall profitability of the sector will decline. And Small and medium-sized companies living space narrowed small and medium-sized companies with insufficient investment in ecological preservation and lack of methodology research and research will face severe challenges. Under the cost pricing mechanism, these companies is able tonot enjoy the advantage of scale, the market price is locked near the level of leading companies, and the risk of profit loss increases signifiis able totly. I've found that research direction: manufacturing Upgrading and Structural Optimization china's chemical sector market will undergo a structural reconstruction of "high-end leadership, environmentally friendly drive and regional coordination. The cost pricing mechanism will promote the transformation of the sector to high-condition research through the triple role of market clearance and elimination, methodology iteration and upgrading, and policy adaptation and supervision. You know what I mean?. And Accelerated formation of oligarchic pattern the field of basic chemicals will maintain thin profits, resource-rich areas will attract greater investment, and the advantages of leading companies will be further expanded. In the field of high-performance fine chemicals, methodology leaders will gain greater premium space and market levels will continue to increase. Innovation drive becomes the core technological innovation will have become the core competitiveness of companies in the era of cost pricing. Process innovation and regulation optimization have become the main ways to minimize costs and increase efficiency, and the importance of R & D investment is further highlighted. Global Positioning Upgrade china's chemical sector is expected to upgrade from a "global manufacturing base" to a "global methodology source", achieving a leap in the three dimensions of condition, efficiency and sustainability, providing historic research opportunities to companies with technological advantages. to practitioners in the chemical sector, grasping the direction of policy changes and laying out technological innovation and cost manage in advance will be the key to remain invincible under the new pricing mechanism.