International crude oil markets rebounded sharply on 6 August. NYMEX light sweet crude for September delivery rose USD 2.07 to settle at USD 77.29 per barrel, a gain of 2.75%, while ICE Brent for October delivery climbed USD 3.04 to close at USD 82.49 per barrel, up 3.83%. In the preceding week, oil prices had plunged more than 14% on news of a breakthrough in US-Iran diplomatic talks and the prospect of the Strait of Hormuz reopening, with WTI touching a three-week low of USD 74.24 per barrel.
Market participants attribute the rebound primarily to the gap between optimistic expectations and the actual pace of progress on reopening the Strait of Hormuz, combined with technical buying after an excessively steep decline. On 6 August, Fitch Ratings said it was maintaining its base-case forecast for 2026 Brent crude at an average of USD 87 per barrel, an assumption that already incorporates a high geopolitical risk premium for renewed escalation in the Middle East, hostilities and even short-term conflict. Fitch cautioned, however, that risks have now shifted to the downside, projecting that the global oil market will return to surplus from September and that Brent could fall to USD 70 per barrel in the fourth quarter of 2026.
Violent swings on the cost side produced a clearly divided performance across Chinese plastics futures and spot markets. On 6 August the front-month polypropylene futures contract settled at CNY 7,976 per tonne, down a steep 2.00%; the front-month polyethylene (LLDPE) contract finished at CNY 7,629 per tonne, off 0.03%; while the front-month PVC contract bucked the trend to gain 0.79% at CNY 4,493 per tonne. In the spot arena, the composite plastics industry price index stood at 8,210 points, down 0.38%. The PE price index was 9,061 points, down 0.29%; LLDPE 8,212 points, down 0.65%; PP 9,038 points, down 0.85%; PVC 4,618 points, up 0.43%; and ABS 10,280 points, down 0.39%.
Industry analysts note that sharp volatility in crude costs is unlikely to be transmitted effectively downstream in the short term. The plastics chain is in its traditional seasonal lull, converter operating rates remain low, procurement is confined to immediate needs, and polyolefin supply pressure is still pronounced. Higher feedstock costs are therefore lifting sentiment rather than providing genuine price support.
Looking ahead, if the global oil market swings into surplus from September as expected, the centre of gravity for plastics feedstock costs should drift lower, potentially redistributing margins along the value chain. Converters are advised to track Middle East geopolitical developments and the pace of new domestic capacity start-ups closely, and to manage raw material purchasing and inventory flexibly to avoid one-way price risk.
