Rubber prices showed notable strength on Monday as geopolitical concerns escalated. Domestic full-cream latex climbed 100 yuan to 18,350 yuan per tonne, while Thailand's No.20 blended rubber held steady at 17,850 yuan per tonne. Feedstock costs moved higher across the board, with Thai rubber latex rising 0.30 baht to 78.00 baht per kilogram and Thai cup rubber advancing 0.20 baht to 70.70 baht per kilogram. Domestic supplies from Yunnan and Hainan each gained 0.1 yuan per kilogram to 16.9 and 15.6 yuan per kilogram respectively.
Inventory data from Qingdao as of August 30 showed total bonded and general trade stocks falling 0.6% to 627,700 tonnes. Bonded warehouse inventories rose 10.01% to 76,800 tonnes, while general trade inventories declined 1.92% to 550,900 tonnes. Bonded warehouse inbound rates increased 3.88 percentage points and outbound rates dropped 6.42 percentage points, whereas general trade saw inbound rates rise 0.52 percentage points and outbound rates climb 0.99 percentage points.
The persistent nighttime rainfall across Thailand's northeast region and domestic Yunnan growing areas continues to disrupt tapping activities, creating firm short-term supply constraints that pricing cannot resolve. Downstream processors have moderated purchasing after the recent sharp price surge, though production levels remain steady with inventories rotating between raw materials and finished goods. The supply-demand balance sheet now shows its clearest near-term driver in some time, with sustained overnight precipitation supporting continued gains in RU and NR contracts. Weather remains unpredictable until the rainy season concludes, suggesting elevated price ranges ahead. However, the seasonal nature of rainfall guarantees supply disruptions will eventually ease, establishing clear boundaries to any price advances.
PX markets are experiencing simultaneous supply and demand expansion. Chinese operating loads rose 4.8 percentage points to 72.5%, still near five-year lows, while Asian PX loads increased 2.7 percentage points to 64.1%. With the current maintenance cycle drawing to a close, most planned turnarounds will be completed this year, allowing August-September operating rates to rise and intensifying supply pressure. PTA loads continue recovering on the demand side, with September PX expected to remain in destocking mode though at a slower pace. The U.S. response to Iranian missile attacks could bring further strikes, keeping markets volatile amid fragmented diplomatic signals while crude prices advance. U.S.-Iran relations remain in a phase of low-intensity military friction without full escalation, and with dark fleet vessels continuing ship-to-ship crude transfers and multiple producers increasing exports, sustained crude price surges appear unlikely. Rising freight rates and marine insurance costs have driven domestic SC crude futures to correct their price differentials. Meanwhile, approaching delivery month for September contracts, mismatched positions versus warrants have forced shorts to abandon positions, lifting most chemical product prices. Near-term PX November contracts should follow domestic crude recovery, with a buy-on-dips stance and resistance in the 8,500-8,700 area.
An additional 2-million-tonne PX unit at an East China facility restarted production on August 30 and is currently raising loads, representing 4.6% of national capacity.
PTA fundamentals show supply increasing amid declining demand. Dushan Energy has normalized operations, Honggang and Weilian Chemical are raising loads after restart, and Yisheng Dahua experienced unplanned downtime. Industry loads rose 4.9 percentage points to 63.8%, still at five-year lows for the period, with spot liquidity recovering and basis weakening. Weaving orders remain partially healthy with fall-winter fabrics being ordered in multiple small batches. Composite operating rates across Jiangsu-Zhejiang show localized improvement, while polyester industry loads fell 2.6 percentage points to 78.1% mainly from bottle chip and staple fiber production cuts. September PTA likely concludes its destocking phase, transitioning to balanced or modest accumulation. Low upstream raw material inventories and tight spot supply support near-term prices, but supply recovery expectations and weak end-demand constrain upside for deferred contracts, which face pressure near prior highs. The market adopts a near-strong, far-weak profile. January PTA contracts should track domestic crude recovery with buy-on-dips strategy and resistance at 5,900-6,100.
A 2.5-million-tonne PTA unit in East China is restarting after July maintenance, while a 4.5-million-tonne South China facility also restarts following late-June shutdown, together representing 7.6% of national capacity. A new 250,000-tonne polyester line in Siyang commenced operations on August 30 focusing on filament production, while several Jiangsu facilities began maintenance on August 31 affecting approximately 530,000 tonnes of chip capacity, with phased restarts planned. These changes encompass 8.5% of national capacity. Monday's polyester filament sales in Jiangsu-Zhejiang were partially healthy, averaging just below 100% by midafternoon.
EG fundamentals reflect supply expansion alongside demand contraction. Industry loads rose 6.3 percentage points to 69.3%, driven primarily by oil-based production increases, while syngas-based loads gained 3.6 percentage points to 69.9%. Previously idled facilities including Xinjiang Tianye and Zhengdakai plan sequential restarts in September. Actual supply increases from imported ethylene glycol will only materialize after mid-October. Social inventory destocking continues through the third quarter. High margins are stimulating domestic operating rates, while downstream negative feedback emerges with bottle chip and staple fiber producers cutting output and selling spot EG. September spot tightness will ease compared to August but remains far from loose. If imported cargoes successfully transit the Strait of Hormuz, forward supply normalizes gradually, pressuring deferred contracts and maintaining the near-strong, far-weak structure. Monday's position-warrant mismatch forced shorts to exit, even triggering limit-up in EG futures. October contracts likely remain firm through September with resistance at 5,600-5,650.
Port inventories at major East China harbors stand at approximately 143,000 tonnes, down 31.9% from the prior period.
PF fundamentals show supply reduction with stable demand. Direct-spun polyester staple loads for spinning fell 3.1 percentage points to 76.1%, with September production cuts expected to continue bringing industry loads to yearly lows. Localized orders are emerging, but actual volumes remain limited with large orders scarce, insufficient demand momentum, slow overall progress, and cautious downstream stocking. Near-term demand improvement is unlikely, with spinning mill loads flat at 53.0%, still at five-year lows for the period. Increasing staple fiber production cuts should improve the supply-demand balance month-over-month. With cost-side stabilization, October PF contracts may shift into range trading with resistance at 7,900-8,000.
Monday direct-spun staple fiber sales improved broadly, averaging 88% by 3:00 PM.
PR fundamentals show simultaneous supply and demand contraction. Bottle chip industry loads fell 9.8 percentage points to 62.3%, reaching new yearly lows, with September maintenance affecting approximately 8.3% of total capacity and further supply decline possible. Domestic peak-season order purchasing has essentially concluded, with beverage and other sectors entering traditional consumption downturns. Major downstream soft drink manufacturers have largely locked September supply, leaving minimal restocking room. The bottle chip fundamental picture should see marginal improvement, with cost stabilization likely shifting November contracts into range trading with resistance at 7,600-7,700.
Soda ash futures surged Monday while spot prices declined marginally, with Shahe heavy alkali quoted at 987 yuan per tonne. Commodity markets showed broad gains with optimistic sentiment. Last week's light maintenance schedule boosted production by 20,000 tonnes to 766,000 tonnes. Boyuan Yingen Chemical began load reductions this week with duration undetermined. Weak downstream demand and modest midstream-downstream purchasing persist, with alkaline plant inventories rising 36,000 tonnes from Thursday to 1.908 million tonnes and delivery warehouse stocks up 81,000 tonnes week-over-week to 573,000 tonnes. One float and one photovoltaic glass line underwent cold repair last week, joined by two photovoltaic glass cold repairs this week. Combined float and PV glass melting capacity continues declining, keeping heavy alkali demand weak while light alkali remains stable-weak. July soda ash imports rose to 29,700 tonnes with exports climbing to 282,300 tonnes. Domestic real estate sales improved sequentially to near year-ago levels, with external macro factors turning positive as the dollar index declines. Short-term demand remains soft with inventories building, though reduced operations at leading natural alkali producers provide support. Soda ash positions declined 1,037 lots Monday to 7,013 lots. Futures maintain range trading with SA2701 reference range at 1,040-1,070.
Glass futures edged higher Monday with spot prices stable, as North China market prices held at 970 yuan per tonne. Shahe sales ratio reached 114% while Hubei slipped to 84%, with overall sales ratios declining. Near-term fundamentals show weakness on both supply and demand sides with low valuations. Operating rates improved last week with output stable, while downstream purchasing remained cautious. Inventories edged down 18,000 tonnes to 3.702 million tonnes, up 18.4% year-on-year. Float glass lines saw no changes last week, with melting capacity stable at 142,215 tonnes per day, down approximately 10.8% annually. January-July domestic building completion area fell 23.2% year-on-year with the decline narrowing slightly. Recent real estate sales improved sequentially to near year-ago levels. Mid-August deep-processing orders increased 0.8 days to 10.3 days, down 0.9% annually. Near-term glass market shows weak supply-demand dynamics with low valuations, increasing macro disturbances, and attention focused on supply-side changes. Prices maintain bottom-range trading with dips suggesting long opportunities, FG2701 reference range at 920-950.
Polyolefins are trading firm amid cost-driven momentum. L2701 settled at 8,098 yuan per tonne Monday, up 378 yuan, while PP2701 advanced 378 yuan to 8,366 yuan. East China LLDPE basis stood at 665 yuan with PP raffia basis at 916 yuan, both weakening substantially. Domestic maintenance remains elevated with no significant profit recovery, tempering expectations of substantial operating rate increases. Downstream operating rates recover seasonally, particularly in PE agricultural film, while PP downstream weighted loads remain stable. Inventories continue declining, with month-spread perspectives showing January contracts pricing in forward supply recovery and lower cost premiums. U.S. forces attacked two Iranian rocket launchers in the Strait of Hormuz on Sunday, the first publicly acknowledged strike since late July, driving short-term risk premiums higher. Polyolefin spot and futures prices should maintain firm range trading.
L2701 reference trading range stands at 7,600-8,400 yuan per tonne with PP2701 at 8,000-8,800 yuan per tonne.
Caustic soda主力SH2611 rose 15 yuan to 1,924 yuan per tonne Monday. Shandong 32% ion-exchange membrane alkali traded at 605-720 yuan per tonne, down 5 yuan from the prior day's average, with one major alumina plant purchasing at 570 yuan. 50% membrane alkali in Shandong ranged 1,020-1,060 yuan, falling 15 yuan. Downstream demand remains average with chlor-alkali plants operating at moderate rates but adequate supply, creating selling pressure. Weekend purchase price cuts at a major alumina producer pushed 32% alkali prices lower, while 50% alkali faces flat demand with ongoing delivery pressure. Supply continues its heavy maintenance schedule from June-August with marginal restarts alongside new turnarounds, keeping weekly maintenance losses elevated and operating rates below year-ago levels. Liquid chlorine prices weakened, likely remaining pressured long-term and dampening restart willingness. Non-alumina demand shows neutral conditions with excess profit suppression, while high inventories cap rebound potential despite low-valuation cost support.
SH2611 reference trading range at 1,800-2,050 yuan per tonne.
PVC主力V2701 rose 213 yuan to 4,791 yuan Monday. Sustained coking coal and coke price gains lifted semi-coke and calcium carbide production costs. With the calcium carbide industry loss-making and PVC plants operating at low loads, cost-push dynamics and supply contraction provide strong support. Monday's sharp PVC rally reflects heightened expectations for cost gains, supply reduction, and traditional autumn demand improvement. However, no substantive demand reversal has occurred, and inventory plus warrant pressures persist. Near-term prices remain firm, though gains reflect expectations and cost drivers more than realized fundamentals. If spot follows higher and inventories continue drawing, momentum could extend toward 5,000 yuan; disappointing demand would limit upside.
V2701 reference trading range at 4,300-4,600 yuan per tonne.
International crude advanced Monday with Brent November gaining 2.7% and WTI October up 3.44%. U.S. strikes on two Iranian launch sites at Larak Island drew Iranian retaliation against U.S. bases in Jordan and the UAE, reigniting geopolitical concerns. September crude maintains its 80-95 dollar Brent range-bound pattern, but with global oil stocks, product inventories, and crude onshore tanks at five-year lows, sustained Hormuz restrictions will push total inventories below key levels by mid-September. Upside risks are intensifying, with triggers focused on Asia-Pacific demand countries experiencing growing supply-deficit awareness as inventories deplete.
Bullish crude options should be maintained.
Singapore high and low sulfur fuel oil spot premiums fell 4.45 and 0.39 dollars per tonne respectively Monday. Tight overseas diesel markets keep low sulfur fuel oil relatively firm. Rekindled U.S.-Iran military tensions and elevated Hormuz logistics risks should shift fuel oil markets from range-bound to firmer bias alongside crude.
Watch-and-wait stance recommended.
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