Outlook of Vietnamese chemical stocks amid Middle East tensions
Geopolitical tensions in the Middle East have turned chemical stocks into a standout sector in the stock market, but not all companies in the industry are beneficiaries.
Chemical stocks shine
Following the Iran-Israel conflict, chemical stocks have emerged as a bright spot. According to data collected by The Investor, even on June 13 - when the VN-Index dropped 7.5 points - many chemical stocks saw strong inflows. For instance, DDV rose by 3.5%, CSV by 2.82%, NFC by 1.92%, DPM by 1.42%, and SFG by 1.28%.
The positive momentum continued in the following days. From June 13 to June 20, several stocks in the sector posted solid gains: QBS (up 16.67%), HVT (11.6%), BFC (8.43%), PSE (7.89%), and DPM (7.72%).
Since the beginning of 2025, performance in the sector has been mixed. NFC stood out with a surge of 212%, while others like DDV, PSE, BFC, PMB, PCE, PLC, and SFG also recorded double-digit growth. In contrast, DGC fell by 16.98%, while QBS, CSV, and HVT declined by 14.29%, 22.65%, and 24.09%, respectively.

Chemical stocks have emerged as a bright spot following the Iran-Israel conflict, Photo courtesy of Landcare Research.
Many brokerage firms view chemicals as a sector worth watching. Experts at MB Securities recommend prioritizing chemical stocks - alongside oil & gas and container shipping - due to supply disruptions stemming from Middle East tensions.
A seasoned investor noted that sectors such as banking, real estate, and fertilizers/chemicals are currently showing intrinsic strength. “These sectors are attracting bottom-fishing capital and have the potential to lead the market’s rebound,” the investor said, declining to be named.
From a more cautious standpoint, analysts at Agriseco Securities warn that rising oil prices, driven by Middle East tensions, could lead to higher logistics and production costs. This may compress profit margins in sectors like exports, transportation, consumer goods, fertilizers, and steel.
Fertilizer-chemical group: a bright spot
According to analysts, geopolitical developments will create divergent prospects within the chemical sector. The fertilizer segment, in particular, is expected to benefit from the surge in commodity prices, including urea. TradingEconomics reported that urea prices rose over 20% in June alone.
Tien Thanh, board member and CEO of Ca Mau Petroleum Fertilizer JSC (DCM), said the conflict in the Middle East could affect both gas supplies and oil transportation through the Gulf, which accounts for 20% of global oil output.
“When oil prices rise, gas prices follow - and that directly impacts fertilizer supplies. Fertilizer prices are closely tied to gas costs,” Thanh noted.
Thanh also pointed to additional pressures on supply. Rising demand and tighter export controls from Chinese authorities, such as stricter customs and quality checks, have reduced China’s export volumes. Meanwhile, fertilizer shipments from the Baltic region and the Middle East have also been constrained.
Analysts believe the recent uptick in urea prices will boost the performance of companies like DCM and DPM. According to Vietcap Securities, both are benefiting from higher average urea selling prices and lower gas input costs. There’s also slight improvement in NPK profit margins due to increased volumes and selling prices, along with advantages stemming from a 5% VAT rate.
Additionally, DPM and DCM are insulated from the U.S. government's reciprocal tariffs since they do not export to the U.S. However, Vietcap cautions that DCM may still be indirectly affected, as rising global tariffs could push Chinese and Middle Eastern producers to divert exports to Southeast Asia, intensifying competition.
On the other hand, rising urea prices may pose challenges for companies like BFC, where urea accounts for 50% of input material costs. At the company’s 2025 AGM in April, CEO Ngo Van Dong warned shareholders about the risks associated with raw material volatility, noting that BFC’s input costs spiked 30% in just one month.
Diverging fortunes in the chemical sector
BFC continues to face headwinds stemming from both soft demand and indirect impacts of ongoing trade tensions. In response, the company has adopted a cautious outlook for 2025, forecasting total revenue of VND7,438 billion ($284.67 million), a 22% decline from 2024, and pre-tax profit of approximately VND281 billion ($10.75 million), down 47%. The company also lowered its dividend payout from 30% to 20%.
DDV benefits from rising DAP prices
DDV, Vietnam’s leading DAP (di-ammonium phosphate) fertilizer producer, is poised to benefit from a significant rise in DAP prices. As of June 18, 2025, DAP prices reached $720 per ton, according to TradingEconomics - up 9.92% month-over-month and 35.21% year-over-year.
The surge is attributed to supply shortages in major agricultural markets like Ethiopia and India, which are reportedly short by around 2 million tons, as well as increased demand in Southeast Asia for upcoming planting seasons.
DAP accounts for over 95% of DDV’s revenue from 2019 to 2024, and the company holds roughly 30% of Vietnam’s market share in this segment.
Vietcap Securities forecasts strong support for DDV’s performance from elevated DAP prices, particularly as China - Vietnam’s largest fertilizer supplier - continues to restrict exports of urea, nitrogen-based fertilizers, and phosphates.
These export curbs, in place since July 2024, are not expected to ease before mid-2025, according to the Ministry of Agriculture and Environment.
Like DPM and DCM, DDV also benefits from the application of a 5% VAT rate. After deducting input VAT, DDV’s production costs are expected to decrease by 7.5%. In a bid to remain competitive and support local farmers, the company has committed to reducing its fertilizer prices by 2-2.5%.
DGC gains from strong fertilizer prices and diversification
Similarly, DGC is benefiting from elevated DAP and MAP (mono-ammonium phosphate) prices. Mirae Asset Securities attributes this price strength to continued export restrictions by key global suppliers such as China and Russia.
In a tight global supply environment, fertilizer prices are expected to remain elevated, helping DGC improve its gross margin in this segment - particularly due to its in-house phosphorus supply and a recovery in selling prices.
Beyond fertilizer, DGC is expanding its product portfolio. In February 2025, it broke ground on the Nghi Son caustic soda plant, with a projected capacity of 50,000 tons per year. The plant is slated to begin operations in Q2/2026 and will serve as a strategic asset for long-term revenue diversification.
Another growth catalyst for DGC is its Duc Giang real estate project, which has been selected as a pilot housing development under Hanoi's Resolution 171. The project includes plans for 1,000 apartments and 60 townhouses, with estimated revenue of VND5 trillion ($191.36 million) and post-tax profit of VND1 trillion ($38.27 million). The company anticipates launching construction within 2025.
PLC and LAS: Margin pressures from raw material volatility
For PLC, lubricants and asphalt remain its two primary revenue drivers, significantly shaping the company's financial performance from 2011 to 2024.
While chemicals and other products contribute about 32% of revenue, their profit contribution remains modest. Nevertheless, this segment is crucial in supplying solvents and chemical inputs for PLC’s production of asphalt and lubricants.
Vietcap analysts caution that PLC’s heavy reliance on refined crude oil products, accounting for 60% of annual costs and peaking at 80% in 2019. This makes the company vulnerable to oil price fluctuations. Recent surges in Brent crude prices may negatively impact PLC’s profit margins.
LAS, another player in the fertilizer space, faces rising costs due to price volatility in raw materials, especially apatite ore, which comprises 52% of its input materials.
Ongoing geopolitical conflicts, including the Russia-Ukraine war and tensions between Hamas and Israel, are expected to continue disrupting raw material supplies and inflating prices. Due to recent shortages, LAS has had to procure additional apatite ore externally, raising input costs and pressuring profit margins.
The impact of Middle East tensions on Vietnam's chemical sector has been uneven. While some stocks stand to benefit from price increases and supply chain shifts, others are grappling with rising input costs and demand uncertainty.
As such, investors should prioritize companies with strong fundamentals and resilient business models rather than chasing sector-wide momentum. Caution is advised against jumping into stocks that have already experienced significant run-ups driven by short-term trends.
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