Rubber continues its high-level sideways movement on Thursday, with domestic whole milk rubber quoted at 18,100 yuan per tonne, up 250 yuan from the previous trading day, while Thailand's TSR20 mixed rubber rose 180 yuan to 17,700 yuan per tonne. On the raw material side, Thai cup lump rubber held steady at 70.00 baht per kilogram, matching the prior session, and Yunnan latex remained flat at 16.8 yuan per kilogram, with Hainan latex also unchanged at 15.5 yuan per kilogram.
As of August 23, 2026, China's total natural rubber social inventory stood at 1.142 million tonnes, down 11,700 tonnes or 1% month-on-month. Dark-colored rubber inventories fell 0.65% to 779,000 tonnes, with Qingdao physical stock down 1.65%, Yunnan up 4.6%, Vietnam SVR10 up 5.8%, and NR inventory down 2.5%. Light-colored rubber inventories declined 1.7% to 363,000 tonnes, with old whole milk rubber down 0.6%, SVR3L up 2%, and RU inventory down 3.3%.
The key driver stems from persistent nighttime rainfall in Thailand's northeast and China's Yunnan产区, which continues to disrupt tapping activities, creating a relatively strong short-term supply constraint that pricing cannot offset. On the demand side, after the recent sharp price surge, downstream purchasing has slowed, yet production remains steady with ongoing rotation between raw material and finished goods inventories. The supply-demand balance sheet is finally showing tangible momentum, as sustained overnight precipitation limits supply, pushing RU&NR into a short-term rebound. Looking ahead, weather remains unpredictable, and until the rainy season concludes, RU&NR may trade with a firm bias. However, what is more certain is that the rainy season will eventually end, meaning supply-driven price gains have boundaries, and upside potential should be viewed rationally.
PX faces a supply-demand dynamic of both sides increasing. China's operating load rose 4.8 percentage points to 72.5%, still at a five-year low, while Asia's PX load increased 2.7 percentage points to 64.1%. Following this round of maintenance, most planned turnarounds for the year will be completed, with PX loads expected to improve during August-September, adding supply pressure. On the demand front, PTA loads are recovering, and PX is expected to destock overall in August-September. Reports indicate the Trump administration has repeatedly told mediators it has no intention of reviving the memorandum of understanding reached between the U.S. and Iran in June, complicating this week's intensive diplomatic efforts. Meanwhile, Iran's Supreme National Security Council secretary Rezaei stated Tehran has prepared a list of conditions for Washington and has allowed temporary passage for vessels through specific lanes in the middle of the Strait of Hormuz. Oil prices ultimately closed higher on this news, though the broader picture remains one of easing negotiations, with dark fleet ship-to-ship transfers and increased exports from producers capping upside. Geopolitical tensions are showing marginal improvement, prompting a revaluation of chemical products as markets quickly shed risk premiums before entering a phase of balancing restocking expectations against supply recovery. In the near term, the PX November main contract is expected to track oil prices lower, with resistance in the 8200-8400 range, favoring a sell-on-rallies approach. Should a phased ceasefire agreement materialize, chemical prices may retreat to pre-conflict levels, and industrial clients are advised to seize short hedging opportunities.
On the plant front, one 800,000-tonne line at Fugang Petrochemical has been shut since late April with another 800,000 tonnes down since mid-to-late June, with one line restarting and expected to produce by month-end and the other targeted for late August to early September. Shenghong Refining's 4 million-tonne unit, offline since late June to early July, has one line restarted with another in progress but no output yet. These changes affect 12.8% of national capacity. In Asia, Thailand's Map Ta Phut PTTG 770,000-tonne unit has been down since July 7 and is restarting, while India's Panipat Indian Oil 400,000-tonne unit has been offline since early July with a planned restart in early September, impacting 1.5% of global capacity.
PTA's supply-demand balance shows supply rising and demand falling. Dushan Energy has returned to normal operations, Honggang and Weilian Chemical are restarting and ramping up, while Yisheng Dahua has an unplanned outage. PTA industry load increased 4.4 percentage points to 63.3%, still at a five-year low for the period, with spot liquidity gradually recovering and basis pressure building, though typhoon disruptions remain limited. On the demand side, weaving orders for grey fabric are partially improving, mainly with repeated small-lot orders for autumn-winter fabrics. Jiangsu-Zhejiang integrated operating rates are recovering locally, but polyester load fell 2.6 percentage points to 70.1% due to reductions in bottle chips and staple fiber. PTA is expected to destock in August-September. The TA09 contract is in a rollover phase, with the higher basis expected to converge through steeper spot declines than futures. With Middle East geopolitical tensions easing significantly and oil prices falling sharply, cost support for energy chemicals is weakening, and valuations face downward risk. The TA01 main contract is expected to track oil prices lower, with resistance at 5700-5850, favoring sell-on-rallies.
PTA plant updates include Honggang Petrochemical's 2.5 million-tonne unit down since July 3 with no clear restart date, its Phase 3 2.5 million-tonne unit restarting on August 23 and ramping up, Fuhaichuang's 4.5 million-tonne unit down since late June and preparing to restart, Yisheng Dalian's 2.25 million-tonne unit shut around August 26 for about a week, Jiaxing Petrochemical's 1.5 million-tonne unit down since July 1 with a planned near-term restart pending feedstock, Dushan Energy's 2.5 million-tonne unit resuming over the weekend and running normally, and Shandong Weilian Chemical's 2.5 million-tonne unit restarting around August 27 with output ramping. These changes affect 17.1% of national capacity. Polyester plants seeing maintenance in late August include Jinlun Staple Fiber 200,000 tonnes, Shanli Staple Fiber 250,000 tonnes, Sanfangxiang Bottle Chips 750,000 tonnes, Fuhai Bottle Chips 300,000 tonnes, and Yisheng Bottle Chips 1.4 million tonnes, while Guxian Changsi 250,000 tonnes and 100,000 tonnes plus Zhongtai Staple Fiber 250,000 tonnes are restarting, covering 3.8% of national capacity. Thursday's polyester filament sales in Jiangsu-Zhejiang were sluggish, with average sales around 20% by 3:30 PM.
EG shows supply increasing and demand decreasing. Domestic ethylene glycol load rose 6.3 percentage points to 69.3%, driven mainly by oil-based units ramping up, while synthetic gas-based load increased 3.6 percentage points to 69.9%. Previously idled units such as Xinjiang Tianye and Zhengdakai are expected to restart in September. Import disruptions from the Middle East are unlikely to fundamentally improve in the near term, and social inventory destocking is set to continue through Q3. High profits are incentivizing domestic EG operating rates higher, while downstream negative feedback sees bottle chip and staple fiber producers reducing output and selling EG feedstock, significantly easing September's supply tightness compared to August. With Middle East geopolitical tensions easing, EG, which has high import dependence and elevated valuations, is leading the chemical sector lower. If imported cargoes successfully navigate the Strait of Hormuz, forward supply will gradually normalize, pressuring far-month prices. Opportunities exist to short November and January contracts on rallies, with industrial clients advised to hold short hedging positions. Mid-term, consider building EG 1-5 reverse spreads in batches.
EG plant details show oil-based units including Yangzi BASF 340,000 tonnes and Zhenhai Refining 800,000 tonnes modestly ramping up, Gulei Petrochemical 700,000 tonnes slightly higher, Sanjiang Petrochemical 1 million tonnes running with updates to follow, Sierbang 40,000 tonnes modestly increased, Hengli 1.8 million tonnes operating on two lines with short-term load increases, Zhejiang Petrochemical Phase 1 750,000 tonnes and Phase 2 1.6 million tonnes running with higher loads, Shenghong Refining 900,000 tonnes producing this week and ramping, Yulong Petrochemical 900,000 tonnes increasing load, and BASF 800,000 tonnes successfully restarted this week. Synthetic gas-based units include Tongliao Jinmei 300,000 tonnes down since August 18 for over 20 days, Xinjiang Tianye Phase 3 600,000 tonnes in maintenance since August 15 for about a month, Yangquan Shouyang 200,000 tonnes near full load, Tianying 150,000 tonnes restart postponed to end-September, Shanxi Woneng 300,000 tonnes temporarily shut on August 26 with restart pending, Jianyuan 260,000 tonnes reducing load this week with planned maintenance from September to mid-October, Huayi 200,000 tonnes ramping, Meijin 300,000 tonnes down since August 20 with restart undetermined, Yuneng Chemical 400,000 tonnes on rotating maintenance across two lines for about 40 days, Zhong Chemical 300,000 tonnes ramping, Zhengdakai 600,000 tonnes in maintenance since end-July with restart expected early September, and Changyi 200,000 tonnes restarted and producing at full load this week. These changes impact 44.8% of national capacity.
PF sees supply declining and demand stable. Spinning-grade direct-spun polyester staple fiber load fell 4.0 percentage points to 79.2%, with spot processing spreads at five-year lows. August capacity cuts at staple fiber plants account for about 8.8% of national capacity, mainly cotton-type staple fiber, bringing industry loads to yearly lows. Terminal demand remains weak with no clear recovery in domestic or foreign orders, and market观望 sentiment prevails. Spinning mill loads held flat at 53.0%, still at five-year lows for the period. Despite increased production cuts, weakening cost support suggests the PF October contract should be sold on rallies, with resistance at 7600-7800, while long PF processing spread opportunities are worth monitoring. Thursday's direct-spun staple fiber sales varied widely, averaging 33% by around 3:00 PM.
PR shows both supply and demand declining. Bottle chip industry load fell 2.5 percentage points to 72.1%, at neutral historical levels for the period, entering a downward trajectory with August-October maintenance affecting about 18.8% of capacity, signaling further supply reductions ahead. Domestic peak-season order procurement is largely complete, with major terminal manufacturers shifting to Q4 and Q1 next year orders. Demand support is weakening with cautious restocking intentions, likely limited to essential purchases in the near term. Bottle chip fundamentals are expected to improve marginally, but weaker cost support suggests the PR November main contract should be sold on rallies, with resistance at 7300-7500, while long PR processing spread opportunities merit attention.
Polyolefins are trading in a wide range. As of the August 27 daytime close, the L2701 contract settled at 7,595 yuan per tonne, up 34 yuan, while PP2701 closed at 7,851 yuan, up 82 yuan. LLDPE East China basis was 980 yuan per tonne, weakening 22 yuan, and PP raffia East China basis was 1,292 yuan, down 83 yuan. Near-term passage resumption expectations exist, but negotiations remain unresolved, leaving oil prices without clear directional momentum. Domestic maintenance stays at relatively high levels, and with no significant profit recovery, expectations for large-scale operating rate increases are subdued. Downstream operating rates are recovering seasonally, mainly visible in PE agricultural film, while PP downstream weighted operating rates hold steady, with overall momentum driven by feedstock price fluctuations. Wide-range trading is expected, with L2701 reference range of 7400-8000 yuan per tonne and PP2701 at 7600-8200 yuan per tonne.
Caustic soda's SH2611 contract fell 31 yuan to 1,893 yuan per tonne on the day. In Shandong, 32% ion-exchange membrane alkali mainstream prices held steady at 615-720 yuan per tonne, with a major downstream alumina plant purchasing liquid alkali at 580 yuan per tonne. Shandong 50% ion-exchange membrane alkali prices were stable at 1040-1070 yuan per tonne. Regional demand is moderate with cautious downstream buying, while most chlor-alkali plants operate steadily with ample supply and some inventory pressure, leading some producers to trim prices slightly within the unchanged 32% price band. The 50% segment sees subdued demand with stable prices. Supply maintains the elevated maintenance pace seen from June to August, with marginal restarts balanced against new turnarounds, keeping weekly maintenance losses high and operating rates below year-ago levels. Liquid chlorine prices are weakening and expected to remain under pressure long-term, dampening restart incentives. Non-alumina demand, constrained by squeezed margins, offers limited support for caustic soda, and high inventories cap rebound potential, though low valuations provide cost support, resulting in wide-range trading. Strategy: wide range, with SH2611 reference at 1800-2050 yuan per tonne.
PVC's V2701 contract rose 7 yuan to 4,473 yuan per tonne as of the August 27 close. Within the chlor-alkali chain, both caustic soda and PVC operating rates are weakening, with overall supply continuing at year-over-year low levels. The core long-term driver remains insufficient demand improvement expectations, as weakening property data and soft peak-season downstream operating rates sustain a bearish domestic demand outlook. July statistics confirm export weakness, with near-term export inquiries subdued. Overall demand momentum is insufficient, making high social inventory destocking difficult and keeping prices under pressure. Strategy: wide range, with V2701 reference at 4300-4600 yuan per tonne.
Crude oil rebounded overnight, with Brent October up 2.21% and WTI October up 1.99%. Iran is preparing a list of conditions for the U.S., while Washington states it is not negotiating with Tehran, and the Strait of Hormuz closure alongside U.S. maritime blockade remains in place until American conditions are met. Overall, this week's Middle East easing reflects avoidance of large-scale military escalation, but strait reopening remains deadlocked. The view that Brent will trade in the 80-95 USD per barrel range until the U.S. midterm elections on November 3 remains valid for now, with downside limited until strait passage resumes. As global crude inventories fall to the lowest level for the period by mid-September, upside risks persist. Strategy: stand aside.
Fuel oil and low-sulfur fuel oil saw Singapore spot premiums fall by 1.65 USD and 1.05 USD per tonne respectively yesterday, with inventories increasing at both Singapore and Europe's ARA ports this week as higher arbitrage cargo supplies ease market tightness. Middle East geopolitical risk has seen limited de-escalation this week, but Iran's stance on not opening the strait until U.S. commitments on lifting the blockade are fulfilled remains unchanged, and Washington continues its maritime blockade. Downside for oil products is constrained until passage resumes, with fuel oil expected to maintain high-level sideways trading. Strategy: stand aside.
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