Rubber: Geopolitical Expectations Intensify Market Divergence
On Thursday, domestic full-crepe rubber was priced at 17,200 yuan per metric ton, up 100 yuan from the previous trading day. Thailand's 20-grade mixed rubber was quoted at 16,780 yuan per metric ton, also up 100 yuan.
On the raw material side, Thai rubber latex was reported at 76.00 baht per kilogram, a decrease of 1.00 baht from the prior day. Thai cup rubber stood at 68.00 baht per kilogram, unchanged. Yunnan latex was at 16.0 yuan per kilogram, and Hainan latex at 15.1 yuan per kilogram, both unchanged.
As of July 12, 2026, China's natural rubber social inventory was 1.21 million metric tons, a decline of 11,000 metric tons or 0.9%. Deep-colored rubber inventory was 827,000 metric tons, down 1.1%. Within this, Qingdao spot inventory fell 0.86%, Yunnan fell 2.3%, and Vietnam 10 was flat. NR inventory decreased 3.6%. Light-colored rubber inventory was 383,000 metric tons, down 0.36%, with old full-crepe rubber down 1%, 3L down 3.2%, and RU inventory up 0.8%.
Analysis indicates that recent weather conditions in major producing areas like Thailand have not worsened. Some regions, such as Vietnam and domestic areas Yunnan and Hainan, have seen short-term tapping disruptions due to rainfall, but this has not created sustained supply pressure. The seasonal recovery of global production is proceeding normally. On the demand side, many domestic tire factories are undergoing maintenance, primarily for semi-steel tires with weaker order books, but inventory depletion suggests demand has not deteriorated further. The short-term balance sheet shows no prominent contradiction. Looking ahead, global production is entering its seasonal growth phase. Without significant weather anomalies in producing regions, supply-side drivers are likely limited. While demand performance is weak, it has not worsened. Despite high daily volatility, a clear trend is unlikely, and RU and NR are expected to trade in a short-term range.
PX: Stable Supply and Growing Demand
China's industry operating rate remained flat at 60.0%, still at a five-year low. Asia's PX operating rate increased slightly by 0.1 percentage point to 57.6%. July PX maintenance volumes are expected to hit a historical record. After this round, most of the year's planned maintenance will be completed. On the demand side, high PTA maintenance is temporarily suppressing PX demand. PX will be in a destocking phase during July and August. The US announced tariffs of 10% and 12.5% on 60 economies, replacing expiring global import tariffs. President Trump stated he is seriously considering restarting major military operations in Iran, surpassing the scale of the previous "Epic Anger" operation, and emphasized full military readiness. Meanwhile, Iran rejected the US ceasefire proposal on Thursday. Iranian military sources claim to have simulated multiple US attack scenarios and prepared for a ground invasion. Geopolitical risk premiums are rising, with crude oil spreads and prices continuing to climb. Focus is on the $100 per barrel resistance level for Brent crude. Overall, the Strait of Hormuz shipping disruption has left the chemical sector fundamentals driven by supply. The ongoing US-Iran negotiations create significant volatility and uncertainty for international oil markets. Domestic chemical prices are lagging behind crude oil gains. The market holds a bearish view on increased PX supply pressure from higher operating rates in August-September. However, strong oil prices keep petrochemical production costs high, raising the possibility of cost-push rallies. A buy-on-dips strategy is recommended for PX September contracts.
Related market news (source: Chemical Fiber Information Network): Liaoyang Petrochemical's 700,000-ton unit has a one-week maintenance plan in late July. Sinopec Jinling's 1.6-million-ton unit has been shut since late May, with a potential restart in late July or early August. These changes involve 5.3% of national capacity.
PTA: Stable Demand and Increasing Supply
Zhongtai Petrochemical restarted, pushing PTA operating rates up 2.5 percentage points to 59.2%. Future load changes are mainly from Yisheng Dalian's unit replacement, limiting further declines. However, July maintenance volume could still reach a record high. On the demand side, some domestic autumn-winter stocking and export orders have been released, though raw material inventories at end-user factories have slightly decreased. The polyester industry operating rate fell 0.2 percentage points to 82.1%. The load inflection point for polyester units precedes that of end-users. PTA is expected to be in overall destocking in July-August. Given the Strait of Hormuz disruption, fundamentals are still crude oil-driven. With increased PTA supply expectations and active short hedging by the industry, PTA spot basis is weakening. The TA9-1 spread has entered a back-month bearish trend, with strong resistance above 200. A bearish spread strategy is advisable. Under a strong oil price environment, petrochemicals are prone to cost-push rallies. A buy-on-dips strategy is recommended for TA September contracts.
Related market news (source: Chemical Fiber Information Network): Zhongtai Petrochemical's 1.2-million-ton unit was shut for maintenance on July 1 and is restarting, expected to produce soon, representing 1.3% of national capacity. Sales for Jiangsu-Zhejiang polyester filament yarn showed slight divergence on Thursday, with average sales estimated at 70-80% around 4 PM.
EG: Reduced Supply and Stable Demand
Domestically, the ethylene glycol industry operating rate decreased 2.2 percentage points to 61.1%. The syngas-based load fell 2.9 percentage points to 68.6%. Planned maintenance at Xinjiang Tianye, Zhengdakai, and other facilities suggests domestic EG supply will remain low in July-August. The disruption to Middle East import shipments is unlikely to improve in the short term. The destocking pattern in social inventory will extend into the third quarter. Spot tightness is being transmitted to the futures market. The EG 09 contract faces significant resistance in the 4,750-4,900 range, but strong support exists near 4,500. A buy-on-dips approach is recommended.
Related market news (source: Chemical Fiber Information Network): On the oil-based side, Sinopec Wuhan's 280,000-ton unit is running at low load. Gulei Petrochemical's 700,000-ton unit started up smoothly on July 19. Yuandong Union's 500,000-ton unit load has moderately increased. Hengli No.2's 900,000-ton unit began a one-month maintenance early this week. Zhejiang Petrochemical's 750,000-ton (Phase 1) and 1.6 million-ton (Phase 2) units saw slight load decreases this week. Shenghong Refining's 900,000-ton unit is shut, expected to restart around late August. On the syngas side, Xinjiang Tianye Phase 3's 600,000-ton unit load slightly decreased, with a one-month maintenance planned for August. Yangquan Shouyang's 200,000-ton unit started maintenance mid-July for about three weeks. Hongsifang's 300,000-ton unit is increasing load. Shanxi Woneng's 300,000-ton unit is running, with a planned shutdown from late July to August 20. Zhong Chemical's 300,000-ton unit is restarting, expected to produce early next week. Changyi's 200,000-ton unit had a temporary short stoppage mid-week, expected to last one week. These changes involve 25.1% of national capacity.
PF: Stable Supply and Decreasing Demand
The operating rate for direct-spun polyester staple fiber for spinning remained flat at 89.2%. Spot processing margins are expected to continue being compressed. The industry's 20% coordinated production cut may be expanded. On the demand side, end-user demand is weak with no significant recovery in foreign orders. Market sentiment is cautious, transactions are weak, and restocking is cautious. Short-term demand is unlikely to improve. The yarn mill operating rate fell 0.8 percentage points to 52.9%, a five-year low for the period. Overall, PF fundamentals are weak. The PF 09 contract price is expected to follow cost-side fluctuations. A high-selling-low-buying strategy is recommended.
Related market news (source: Chemical Fiber Information Network): Sales for polyester staple fiber factories were mixed on Thursday. Average sales were around 68% as of 3:00 PM.
PR: Increasing Supply and Stable Demand
On the supply side, the bottle-grade chip industry operating rate increased 3.2 percentage points to 80.0%, nearly returning to pre-joint production-cut levels from the second half of last year. New production from Fuhai, Kesen, and the previously long-shut Anhua unit will come online, increasing supply pressure. On the demand side, the end-user market is in its consumption peak season, but overseas market trading sentiment is average. Spot processing fees are under pressure, and the spot basis is weak. Overall, bottle-grade chip fundamentals are marginally weakening. The main PR 09 contract is expected to follow cost-side fluctuations. A high-selling-low-buying strategy is recommended.
Soda Ash: Slight Decline
Soda ash futures fell slightly on Thursday, and spot prices edged down. Heavy soda ash in Shahe was quoted at 1,027 yuan per metric ton (down 6 yuan). Commodity markets were broadly higher on Thursday with positive sentiment. Soda ash maintenance was low this week, with production increasing 12,000 metric tons to 762,000 metric tons. Last Thursday, Lengshuijiang began maintenance. Last Sunday, Qinghai Fatou began and ended maintenance this week. Downstream demand slightly decreased, with weak purchasing enthusiasm. Latest factory inventory increased 9,000 metric tons from Monday to 1.781 million metric tons. Latest delivery warehouse inventory decreased 43,000 metric tons from the previous week to 448,000 metric tons. Last week, photovoltaic glass lines were unchanged, while two float glass lines were shut down (Hunan Yanxiang Xiangshi, 1,000 T/D; Zhongbo Weihai, 500 T/D). This week, three photovoltaic glass lines were shut (Guangxi CSG, 1,200 T/D; Zhaotong Kibing, 1,200 T/D; Shaanxi Tuori, 250 T/D), and three float glass lines were shut (Hebei Xinli, 700 T/D; Shanxi Lihu, 600 T/D; Guangdong Yufeng, 700 T/D). The combined float and photovoltaic glass daily melting capacity is falling, decreasing heavy soda ash demand. Light soda ash demand is weak, and mid-to-downstream purchasing enthusiasm is low. June soda ash imports rose to 20,500 metric tons, while exports fell to 240,700 metric tons. Macro-wise, domestic real estate sales data slightly increased, near last year's levels. Foreign macro influences are bearish (rising US dollar index). Domestic macro influences are bearish (continued real estate downturn, weak consumption data). Overall, short-term soda ash supply is high and demand weak, but valuations are clearly low. Prices are expected to consolidate at low levels. Soda ash warrants increased by 800 to 2,360 on Thursday.
Short-term soda ash futures will likely consolidate at low levels. SA2609 intraday reference range is 990-1,010.
Glass: Weak Supply and Demand
Glass futures fell slightly on Thursday, with spot prices stable to lower. North China glass market price was 1,010 yuan per metric ton (down 10 yuan). Central China glass market price was 1,000 yuan (unchanged). Shahe sales rate was 76%, Hubei sales rate was 94%, both declining.
Short-term glass fundamentals show weak supply and demand, with demand being a major drag. Glass production decreased this week. Downstream purchasing enthusiasm was moderate. Inventory decreased slightly, down 41,000 metric tons to 3.765 million metric tons, up 21.6% year-on-year. Two float glass lines were shut last week (Hunan Yanxiang Xiangshi, 1,000 T/D; Zhongbo Weihai, 500 T/D) and three this week (Hebei Xinli, 700 T/D; Shanxi Lihu, 600 T/D; Guangdong Yufeng, 700 T/D). Daily melting capacity is decreasing. The latest in-production daily melting capacity is 143,515 T/D, down about 9.7% year-on-year. Domestic building completions area from January to June decreased 23.7% year-on-year (a slightly wider decline). Recent real estate sales data slightly increased, near last year's levels. The latest (mid-July) glass deep processing order index increased 0.1 days to 8.3 days, down 10.6% year-on-year. Short-term glass is weak on both supply and demand. Under weak demand, futures prices will continue a weak consolidation. Current valuations are at historically low levels. Focus on supply-side changes.
Short-term glass futures will likely consolidate at low levels. Valuations are low. Long positions can be exited. FG2609 intraday reference range is 890-910.
Polyolefins: Cost Support Drives Strong Performance
As of the July 23 day session close, LDPE futures L2609 closed at 7,997 yuan per metric ton (up 187 yuan for the day), and PP futures PP2609 closed at 8,470 yuan (up 131 yuan). LLDPE East China basis was 516 yuan per metric ton (weakening 149 yuan for the day). PP East China basis was 602 yuan (weakening 86 yuan).
The escalating Middle East geopolitical situation is disrupting crude oil supply and pushing up international oil prices, providing strong cost support for the domestic polyolefin market. Combined with low overall polyolefin inventories and strong petrochemical company willingness to support prices, short-term market prices are fluctuating upwards with upward momentum. On the demand side, it is the traditional consumption off-season. Downstream industries like plastic weaving and film operate at low rates with compressed processing profits. Just-in-time procurement is cautious with no concentrated restocking, preventing volume growth. The restart of previously maintained units and the return of imported cargoes depend on the effective restoration of strait traffic. Overall, short-term polyolefins are driven by geopolitical costs and are expected to trade firmly at high levels.
View: Short-term geopolitical factors will drive volatile strength. L2609 contract reference range is 7,600-8,400 yuan per metric ton. PP2609 contract reference range is 8,000-8,800 yuan per metric ton.
Caustic Soda: Low-Range Consolidation
Caustic soda futures SH2609 rose 2 yuan per metric ton to 1,877 yuan. In Shandong, the main transaction price for 32% ion-exchange membrane caustic soda was 625-730 yuan per metric ton, stable from the previous day. The local large alumina plant's liquid caustic soda purchase price was 590 yuan. The main transaction price for 50% ion-exchange membrane caustic soda in Shandong was 1,000-1,030 yuan, stable. Shandong demand is average. Chlor-alkali plants are not fully operating. Sales are acceptable. Some companies adjusted prices based on their own supply-demand, prices slightly up. The 32% liquid caustic soda market price range was unchanged. Demand for 50% liquid caustic soda is flat, with average downstream purchasing enthusiasm. Prices were stable.
The caustic soda market is currently fluctuating in a low range, with a pattern of strong supply and weak demand. On the supply side, industry capacity continues to be released, with stable plant operations and ample supply, capping spot price upside. On the demand side, support is weak. Core downstream alumina has limited growth. Terminal demand from printing, dyeing, and papermaking is stable with no boost. Export volumes have increased but cannot offset the domestic demand shortfall. Current chlor-alkali company comprehensive profits are at low levels, with industry expectations of production cuts, limiting downside price risk. Short-term prices will continue low-range fluctuations.
Strategy: Wide fluctuation range. Main contract SH2609 reference price range is 1,800-2,100 yuan per metric ton.
PVC: Cost Support from Geopolitical Risks
As of the July 23 day session close, PVC futures V2609 rose 53 yuan per metric ton to 4,618 yuan.
Short-term geopolitical risk premiums are supporting domestic chemical prices. Stronger ethylene prices provide cost support. On the supply side, calcium carbide-based PVC operating rates are down, while ethylene-based rates are up. Overall supply is low. The slight rebound in calcium carbide costs has alleviated earlier supply surplus pressure. Market inventory is slowly destocking. On the demand side, it remains weak. The real estate recovery is insufficient. Terminal product orders are flat. Just-in-time demand drives market transactions. Short-term geopolitical factors cause concerns about Asia-Pacific ethylene supply, pushing costs higher. However, considering current ethylene-based PVC operating rates are already at historically low levels, the potential for further cost-driven production cuts is limited. Short-term prices will be volatile and slightly stronger, but gains may be limited.
Strategy: Wide fluctuation range. Main contract V2609 reference price range is 4,400-4,800 yuan per metric ton.
Crude Oil: Further Gains, Brent Breaks $100
International oil prices rose further overnight. Brent crude September contract surged 5.8% to break through $100 per barrel. WTI September contract rose 6.8%. The Middle East situation continues to escalate. The Strait of Hormuz and Bab-el-Mandeb Strait are simultaneously blocked. After Yemen's Houthi group announced a maritime blockade on Saudi Arabia on July 20, at least five ships changed course in the Red Sea. The Houthis claimed to have attacked two Saudi tankers. Since this escalation, Trump has not frequently used TACO moves and stated yesterday he is considering restarting large-scale operations against Iran. Calculations suggest that Brent above $95 and WTI above $90 will reignite US inflation concerns. Focus on the possibility of the dollar strengthening and the resumption of US-Iran diplomatic channels after Brent breaks $95. Long positions should be held cautiously.
Operating strategy: Hold long positions cautiously.
Fuel Oil & Low Sulfur Fuel Oil: Following Crude Oil Higher
Singapore high and low sulfur fuel oil spot premiums fell $1.92 per metric ton and rose $1.22 per metric ton, respectively, yesterday. Singapore fuel oil inventories increased 1.8% last week. Profit-taking from high levels weakened both high and low sulfur fuel oil crack spreads. There is no sign of de-escalation in US-Iran mutual attacks. The US has struck Iran for 13 consecutive nights. If the dual blockage of the Strait of Hormuz and Bab-el-Mandeb Strait continues, the tight oil inventory situation will be more severe than the first conflict that began on February 28. Short-term fuel oil markets will follow crude oil in volatile strength. Focus on the potential reversal of oil prices due to inflation pressure after Brent breaks $95.
Operating strategy: Hold long positions cautiously.
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