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Rubber: Short-Term Rebound Expected
On Wednesday, domestic whole latex rubber was priced at 18,000 yuan/tonne, down 250 yuan/tonne from the previous day, while Thailand's No. 20 mixed rubber stood at 17,680 yuan/tonne, a decrease of 70 yuan/tonne. On the raw material front, Thai cup lump and latex prices both inched up by 0.50 baht/kg each, settling at 78.50 and 71.50 baht/kg respectively. Yunnan latex held steady at 17.1 yuan/kg, while Hainan latex dipped 0.2 yuan/kg to 15.6 yuan/kg.
As of August 30, 2026, China's natural rubber social inventory was 1.144 million tonnes, a modest increase of 0.18% week-on-week. Deep-colored rubber inventory totaled 781,000 tonnes, up 0.3%, with Qingdao physical stocks down 0.6%, Yunnan up 6.8%, Vietnam SVR10 down 4.7%, and NR inventory decreasing 13.3%. Light-colored rubber inventory stood at 363,000 tonnes, down 0.1%.
Persistent nighttime rainfall in Thailand's northeast and China's Yunnan producing areas continues to hamper tapping, creating a firm near-term supply constraint. While downstream procurement has slowed following recent sharp price gains, production remains resilient, with ongoing rotation between raw material and finished goods inventories. The supply squeeze from sustained rainfall supports continued short-term rebounds in RU and NR contracts. Until the rainy season concludes, prices are likely to remain elevated, though the potential for weather-driven supply-driven rallies has its limits, as the wet season will eventually end.
PX: Rising Supply and Demand
Chinese PX operating rates climbed 4.8 percentage points to 72.5%, still near five-year lows for this period, while Asian rates rose 2.7 percentage points to 64.1%. With the current maintenance wave concluding, most scheduled turnarounds for the year are now complete, meaning August-September load factors should improve, adding supply pressure. On the demand side, PTA operating rates are recovering, and September should still see inventory drawdowns, albeit at a slower pace.
Meanwhile, US private payrolls added just 37,000 jobs in August, the weakest monthly gain since January. Weekly EIA crude inventories drew down more than expected. President Trump indicated the latest strikes on Iran would be brief, while also preparing further action. According to CNN, the US military escorted 40 tankers carrying 18 million barrels of oil through the Strait of Hormuz on Tuesday, a wartime record. Core OPEC+ members are likely to keep October output quotas unchanged at this weekend's meeting, according to two delegates. Brent ultimately settled higher. Low inventories and rising costs remain the core drivers of strength across the energy-chemical complex. While bullish sentiment persists, chasing prices is risky given potential pullbacks. Near-term upside for domestic crude price differentials is limited, with the PX November contract likely to shift into a consolidation phase with resistance at 8800-9000. Rolling PX10-1 long spreads on dips.
PTA: Supply Up, Demand Down
With Dusun Energy back to normal operations, Honggang and Weilian ramping up, and Yisheng Dahua experiencing unplanned downtime, PTA industry load factors increased 4.9 percentage points to 63.8%, still a five-year seasonal low. The rise in unplanned outages has firmed spot basis slightly. Downstream, new orders for greige fabrics are patchy, with some autumn/winter materials ordered in small, repeated lots. Integrated operating rates in Jiangsu and Zhejiang are ticking up, while polyester load factors fell 2.6 percentage points to 78.1%, mainly due to reduced bottle chip and staple fiber output. PTA is likely to conclude its destocking phase in September, shifting to balance or mild accumulation. Near-term support from low upstream inventories and tight spot supply contrasts with restricted upside from supply recovery expectations and weak end-demand. The market is expected to remain stronger in the near months versus far months. The PTA January contract should trade sideways with resistance at 5900-6100. Re-enter TA10-1 positive spreads on pullbacks.
Related: Hengli Petrochemical plans to shut a 2.2 million-tonne PTA unit in Dalian for maintenance, with load reductions starting September 2 (2.4% of national capacity). Wednesday's polyester filament sales remained weak overall, with average estimated sales at 30-40% by 3:30 pm.
EG: Supply Up, Demand Down
Ethylene glycol load factors rose 6.3 percentage points to 69.3%, driven by oil-based units ramping up. Synthetic gas-based load increased 3.6 percentage points to 69.9%, with previously idled units such as Xinjiang Tianye and Zhengdakai expected to restart through September. The actual supply increase from Chinese imports won't be felt until mid-October at the earliest. Social inventory drawdowns will continue through Q3. High profits are incentivizing domestic operating rates, while downstream negative feedback is emerging, with bottle chip and staple fiber producers cutting output and selling spot EG. While September spot tightness eases compared to August, conditions remain far from loose. If imported cargoes successfully transit the Strait of Hormuz, longer-dated supply normalizes, pressuring far-month prices. The market structure remains more robust in the near months. With both fundamentals and costs strong, funds are returning to the October contract, leaving ample room for upside. Reiterate buying EG October dips before end-September, though be mindful of sensitivity to bearish headlines near highs, particularly regarding vessel movements from the Middle East to China.
PF: Supply Reduced, Demand Stable
Direct-spun polyester staple load factors decreased 3.1 percentage points to 76.1%, with September cuts expected to drive rates to yearly lows. Demand remains limited, with some local order start-ups but few large contracts, and overall momentum sluggish. Downstream restocking is cautious, with yarn mill load factors holding at 53.0%, a five-year seasonal low. With increased staple fiber production cuts, the supply-demand balance improves month-on-month. With costs stabilizing and bouncing, the PF November contract should trade sideways, with opportunities to go long PF processing margins. Wednesday's direct-spun staple sales ranged widely, averaging 57% by 3:00 pm.
PR: Supply and Demand Both Reduced
Bottle chip load factors declined 9.8 percentage points to 62.3%, a new annual low, with September maintenance units accounting for roughly 8.3% of total capacity, suggesting further output declines. Demand-side support is weakening as the domestic peak-season purchasing wraps up and the beverage sector enters its traditional off-season. Major beverage makers have largely locked in September supplies, leaving little room for additional purchases. Fundamentals should improve marginally, and with costs recovering, the PR November contract should see range-bound trading, with opportunities to go long PR processing margins.
Soda Ash: Prices Dip
Wednesday saw modest futures declines and spot price weakness, with Shahé heavy soda ash offered at 996 yuan/tonne (down 24). Weekly production increased 20,000 tonnes to 766,000 tonnes on reduced maintenance. Starting this week, Boyuan Yingen Chemical has reduced run rates, with duration unspecified. Downstream demand remains soft, with lackluster procurement interest. Alkali plant inventories rose 36,000 tonnes week-on-week to 1.908 million tonnes, while exchange warehouse stocks increased 81,000 tonnes versus the prior week to 573,000 tonnes. Last week saw one cold repair line each in flat glass and photovoltaic glass; this week, two PV glass lines have been idled. Combined flat and PV glass melting volumes are declining, weighing on heavy alkali demand, while light alkali demand is steady but weak. July imports rose to 29,700 tonnes with exports at 282,300 tonnes. Macro sentiment is mixed. Overall, near-term demand is weak and inventories are building, though reduced output from leading natural alkali producers offers support. SA2701 is likely to trade between 1040-1080 intraday.
Glass: Sideways Movements
Wednesday saw modest futures declines with stable spot prices. North China glass averaged 970 yuan/tonne, with Shahé sales at a healthy 128% of production. Operating rates ticked up last week while output held steady, and inventories eased slightly to 3.702 million tonnes, up 18.4% year-on-year. Melting volume is stable at 142,215 T/D, down roughly 10.9% year-on-year. The market remains structurally weak on both ends with low valuations. Near-term supply is slightly recovering, demand is seasonally increasing, and macro and cost-side disruptions are adding volatility. Glass prices are expected to fluctuate with a bullish bias; consider shorting on dips with FG2701 trading between 950-980 intraday.
Polyolefins: Cost-Driven, Range-Bound with Firm Bias
As of September 2's close, the L2701 contract settled at 8,279 yuan/tonne (up 154), while PP2701 finished at 8,536 yuan/tonne (up 176). Domestic maintenance remains elevated, and with no significant profit recovery, expectations of sharp output increases are limited. Downstream operating rates are recovering seasonally, particularly for agricultural film, while PP downstream rates hold steady. Inventories continue to decline, and the recent escalation in US-Iran tensions provides strong cost support and risk premium. Near-month strength prevails. Expect firm trading: L2701 range 7800-8800 yuan/tonne; PP2701 range 8000-9000 yuan/tonne.
Caustic Soda: Range-Bound
SH2611 fell 50 yuan/tonne to 1,891 yuan/tonne. In Shandong, 32% ion-exchange membrane alkali traded in a 605-720 yuan/tonne range, stable from the previous session, while a major downstream alumina producer kept its purchasing price at 570 yuan/tonne. 50% alkali prices eased 30 yuan/tonne to 980-1020 yuan/tonne. Demand is lackluster, production steady, and inventory pressure persists. Maintenance remains at elevated levels overall, keeping operating rates below historical averages. Liquid chlorine prices are expected to stay under pressure. Weak non-alumina demand, high inventories, and low valuations suggest wide-range fluctuation. SH2611 reference range: 1800-2050 yuan/tonne.
PVC: Cost & Sentiment Support
V2701 rose 18 yuan/tonne to 4,906 yuan/tonne. Rising coking coal and coke prices are lifting semi-coke and calcium carbide costs. With carbide producers at a loss and PVC units running at reduced loads, cost-push and supply contraction are providing solid support. The market has priced in higher costs, supply cuts, and seasonal demand improvement expectations for the September-October peak season. However, demand has yet to fundamentally reverse, and inventory and warehouse receipt pressures persist. Continued stock drawdowns and spot gains could extend gains toward 5,000 yuan/tonne, but weak demand would cap upside. Range: 4600-5100 yuan/tonne.
Crude Oil: Geopolitical Risks Persist
International oil prices were broadly flat on Wednesday after Brent and WTI broke above 95 and 90 USD/barrel respectively. The renewed US-Iran military conflict this week has reignited concerns over Middle East export logistics, while last week's refinery utilization increase saw commercial crude inventories fall more than expected by 4.45 million barrels. September is expected to see continued range-bound trading between 80-95 USD/barrel for Brent, but with global inventories at five-year lows for this period, there is upside risk if Hormuz transit remains restricted, potentially leading to a downside break by mid-September. The oil price is likely to remain firm in the short term. Monitor US inflation concerns and potential pressure from President Trump on geopolitical risks. Strategy: Maintain long call options.
Fuel Oil & Low-Sulfur Fuel Oil: Relative Strength
Singapore high-sulfur fuel oil cash premiums fell 4.91 USD/tonne, while low-sulfur premiums rose 2.03 USD/tonne, with LSFO supported by tight international diesel markets. Expectations for arbitrage inflows into Asia are weak, and the six-month supply disruption from the Middle East shows no signs of easing. Global fuel oil inventories have dropped to seasonal lows. Restricted export logistics and refiners prioritizing diesel output constrain both high- and low-sulfur supply. Short-term, fuel oil will track crude's firm trend. Strategy: Stand aside.
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