Here is a summary of the latest developments and outlooks for key energy and chemical commodities.
Rubber: Market Expectations May Align with Reality
On Thursday, the price of domestic full latex rubber was 17,100 yuan per ton, down 250 yuan from the previous day. The price of Thai RSS3 20# mixed rubber was 16,650 yuan per ton, down 230 yuan from the previous day.
On the raw material front, Thai rubber latex was quoted at 80.3 baht per kilogram, unchanged from the previous day, while Thai cup lump was quoted at 68.7 baht per kilogram, up 0.2 baht. In China, Yunnan rubber latex was quoted at 16.1 yuan per kilogram, unchanged, and Hainan rubber latex was quoted at 15.2 yuan per kilogram, up 0.1 yuan.
As of July 12, 2026, China's natural rubber social inventory stood at 1.21 million tonnes, a decrease of 11,000 tonnes or 0.9% month-on-month. The total social inventory of dark rubber was 827,000 tonnes, down 1.1% month-on-month. Within this, Qingdao physical inventory fell by 0.86%, Yunnan inventory fell by 2.3%, Vietnamese 10# inventory was flat, and NR inventory decreased by 3.6%. The total social inventory of light-colored rubber was 383,000 tonnes, down 0.36% month-on-month. Old full latex rubber inventory fell by 1%, 3L inventory fell by 3.2%, while RU inventory increased by 0.8%.
Outlook: Since June, global authoritative agencies have reported approximately nine times on the progression of El Niño from warning to confirmation to intensity revision. However, despite sustained high temperatures in major producing regions like Thailand, rainfall has not decreased further. Therefore, during the seasonal production increase period, supply is expected to be relatively stable. On the demand side, recent maintenance at domestic tire factories and simultaneous inventory destocking suggest demand has not continued to deteriorate. The supply-demand balance is stable, with no prominent short-term contradictions, leading to a pullback after a recent rebound. Looking ahead, considering that this year's demand growth for tires is primarily driven by the domestic market—which has stronger risk resilience—the conclusion remains unchanged even as geopolitical conflicts resurface. If the prices of RU & NR touch the lows seen in April and March, it could present a low-risk opportunity to participate in a potential future reversal.
Soda Ash
Soda ash futures saw a slight decline on Thursday, with spot prices also edging lower. The quoted price for heavy soda ash in Shahe was 1,024 yuan per ton, down 17 yuan.
The broader commodity market was mixed on Thursday, with overall sentiment subdued. Soda ash production saw little change in maintenance schedules this week, with output decreasing by 5,000 tonnes to 750,000 tonnes. Maintenance began at Hunan Lengshuijiang last Tuesday and at Qinghai Fadou last Sunday. Downstream demand weakened slightly, with mid-to-downstream purchasing enthusiasm remaining low. The latest plant inventory increased by 4,000 tonnes from Monday to 1.754 million tonnes, while the latest delivery warehouse inventory increased by 1,000 tonnes from the previous week to 491,000 tonnes. Last week, three photovoltaic glass production lines underwent cold repairs (Jiangxi Rainbow, 1000 T/D; Anhui Xinyi PV Glass, 1000 T/D; Flat Glass, 600 T/D), with no changes in float glass lines. This week, two float glass lines began cold repairs (Hunan Yanxiangxiang Industrial, 1000 T/D; Zhongbo Weihai, 500 T/D). Recent daily melting capacity for float and photovoltaic glass has declined, leading to a slight drop in demand for heavy soda ash. Demand for light soda ash remains weakly stable, with continued low purchasing enthusiasm. In May, soda ash imports rose to 16,700 tonnes, while exports slightly decreased to 263,000 tonnes. Macro factors: recent domestic real estate sales data has declined month-on-month, approaching last year's levels; international macro influences are bearish (strengthening US dollar index); domestic macro factors are also bearish (continued downturn in the property sector, weak consumption data). Overall, short-term soda ash faces rising supply, weak demand, and subdued market sentiment, with poor demand and pessimistic expectations weighing on prices. On warehouse receipts, soda ash receipts held steady at 3,297 lots on Thursday.
Short-term soda ash futures are expected to trade weakly, with valuations on the low side. Short positions may consider reducing exposure or exiting. The SA2609 contract is referenced within the 1020-1040 range for intraday trading.
Glass
Glass futures experienced a minor decline on Thursday, with spot prices steady to lower. The market price in North China was 1,020 yuan per ton (unchanged), while Central China's price was 1,000 yuan per ton (down 10 yuan). The sales-to-production ratio in Shahe was 83%, and in Hubei it was 127%, showing a slight improvement.
The short-term glass market fundamentals show both weak supply and demand, with demand being a clear drag. Production declined week-on-week, downstream purchasing activity was average, and inventory increased slightly. The latest glass inventory rose by 5,000 tonnes to 3.805 million tonnes, up 17.2% year-on-year. This week, two float glass lines began cold repairs (Hunan Yanxiangxiang Industrial, 1000 T/D; Zhongbo Weihai, 500 T/D). Recent daily melting capacity has decreased slightly, with the latest in-operation daily capacity at 144,515 tonnes per day, down approximately 8.4% year-on-year. Domestic completed floor space from January to June fell by 23.7% year-on-year (a slight widening of the decline). Recent real estate sales data has declined month-on-month, nearing last year's levels. The latest (late June) glass deep-processing order book increased by 0.1 days to 8.3 days, but was down 10.6% year-on-year. In the short term, with both supply and demand weak and lacking strong upward momentum, futures prices are expected to continue their weak consolidation amid the soft demand backdrop. Multiple production lines are scheduled for cold repairs in July, and their implementation should be closely monitored.
Short-term glass futures are expected to trade in a weak consolidation pattern. The FG2609 contract is referenced within the 920-950 range for intraday trading.
Polyolefins: Geopolitical Volatility Drives Significant Cost Premium Increase
As of the close on July 16, the main L2609 linear low-density polyethylene (LLDPE) contract settled at 7,697 yuan per ton (down 51 yuan on the day), while the main PP2609 polypropylene contract settled at 8,058 yuan per ton (up 37 yuan on the day). The LLDPE basis in East China was 602 yuan per ton (strengthening by 16 yuan on the day), and the PP homopolymer basis in East China was 869 yuan per ton (strengthening by 96 yuan on the day).
Geopolitical volatility has pushed the cost benchmark, with WTI crude oil nearing the $80 per barrel mark. Recent statements from various parties suggest potential for further escalation of conflict, providing short-term support for a significant rebound in polyolefin prices. A secondary impact is the renewed closure of the Strait of Hormuz, delaying expectations for a resumption of normal shipping. This is expected to lead to a slower recovery in domestic supply and weaker-than-expected arrivals of overseas imports, keeping supply tight. Current inventories are at historically low levels for this period, and with insufficient time before the September contract expiry, the market is expected to remain firm in the short term.
Outlook: Short-term prices are expected to be firm with volatility driven by geopolitical factors. The L2609 contract is referenced within the 7400-8200 yuan per ton range, and the PP2609 contract within the 7600-8400 yuan per ton range.
Caustic Soda
The main SH2609 caustic soda contract fell by 2 yuan per ton to 1,906 yuan. In Shandong, the mainstream transaction price for 32% ion-exchange membrane caustic soda was 625-730 yuan per ton, stable from the previous working day. A major local downstream alumina plant's liquid caustic soda purchase price was executed at 590 yuan per ton. The mainstream transaction price for 50% ion-exchange membrane caustic soda in Shandong was 1000-1020 yuan per ton, also stable. Demand for liquid caustic soda in Shandong is subdued, overall operating rates at chlor-alkali enterprises are not high, and sales pressure varies among firms, with some raising prices while the 32% liquid caustic soda price range remains unchanged. Recent demand for 50% liquid caustic soda is lukewarm, with relatively stable shipments and steady prices.
The caustic soda market has recently been trading in a low, volatile range, characterized by a pattern of strong supply and weak demand. On the supply side, continuous industry capacity additions and stable plant operations have kept overall supply ample, capping the upside for spot prices. Demand-side support is soft, with limited incremental demand from the core downstream alumina sector. Terminal demand from sectors like printing & dyeing and papermaking is steady but offers no boost. While exports have increased, they are insufficient to offset domestic demand weaknesses. Current integrated profits for chlor-alkali enterprises are at low levels, leading to industry expectations of production cuts, which may somewhat limit downside price movement. The short-term market is expected to continue its low-range consolidation.
Strategy: Expect wide fluctuations. The main SH2609 contract is referenced within the 1800-2100 yuan per ton range.
PVC
As of the close on July 16, the main V2609 PVC contract fell by 8 yuan per ton to settle at 4,590 yuan per ton.
The PVC market has recently stabilized at low levels with a slight recovery, showing clear characteristics of bottom consolidation. On the supply side, operating rates for the calcium carbide process have declined while those for the ethylene process have increased, keeping overall supply low. Combined with a slight rebound in calcium carbide costs, this has alleviated previous oversupply pressure, leading to a slow inventory drawdown. Demand remains weak, with insufficient strength in the property market recovery and平淡 order intake for finished products, meaning market transactions are dominated by rigid demand. Short-term geopolitical volatility has raised concerns about ethylene supply in the Asia-Pacific region, manifesting as cost-push support. However, considering that current ethylene-based PVC operating rates are already at historically low levels, the potential for further cost increases to drive rates lower may be limited. The market is expected to trade in a wide range in the short term.
Strategy: Expect wide fluctuations. The main V2609 contract is referenced within the 4400-4700 yuan per ton range.
Crude Oil
International oil prices were volatile overnight. Brent crude for September delivery fell 0.24%, while WTI crude for August delivery fell 0.82%. On Thursday, the US conducted its sixth consecutive night of strikes against Iran and threatened to bomb Iranian bridges and power plants next week if Iran did not return to negotiations. Reuters reported that Iran has informed Yemen's Houthi rebels that if the US attacks Iran's power grid, the Houthis will block the Bab el-Mandeb Strait. The US and Iran remain in a phase of mutual threats. However, the market has lowered its expectations for a full-scale restart of US-Iran war based on former President Trump's actions regarding the TACO transit fee. Crude oil's recent rebound has already met the previously estimated Brent target of $85 per barrel. Focus is now on whether the geopolitical situation will escalate further. Previous long positions can be partially reduced. Declining traffic through the straits continues to support the market. It is anticipated that oil prices will shift from a sustained uptrend to a consolidating pattern.
Operational Strategy: Adopt a wait-and-see approach.
Fuel Oil & Low-Sulfur Fuel Oil (LSFO)
Yesterday, Singapore spot premiums for high-sulfur fuel oil (HSFO) and low-sulfur fuel oil (LSFO) fell by $0.4 per barrel and $2 per barrel, respectively. Singapore fuel oil inventories fell for the third consecutive week due to lower imports and higher exports, but bullish sentiment in the Singapore fuel oil market has moderated. We had previously suggested适度减持 (moderately reducing) long positions in FU and LU. Although the US-Iran conflict persists, judging from Trump's previous stance on the TACO transit fee for the strait, the possibility of a full-scale US-Iran war restart appears limited. It is anticipated that fuel oil prices will follow crude oil into a consolidating pattern.
Operational Strategy: Adopt a wait-and-see approach.
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