We anticipate sustained trade conflicts for some China commodities players over the next two years due to abundant supply in the global market and tepid domestic demand. Most of the commodities China produces are consumed in the domestic market. This makes soft domestic demand the largest obstacles for the sector. Nonetheless, exports of key commodities have been rising from a low base. Export hurdles and trade retaliation will add to tough conditions for some of the Chinese commodities companies we rate. China's chemical companies are the most prone to changes in demand as new projects from the past three years increase capacity. The steel industry, in contrast, has been limiting capacity for several years.