On July 24, 2026, international crude oil prices surged dramatically, with Brent crude futures settling up 7.04% at $100.69/barrel, reclaiming the critical $100 mark. WTI crude oil September contract rose 6.17% to $92.19/barrel. The domestic commodity futures market opened broadly higher, with crude oil main contract up more than 6%, fuel oil and benzene up more than 3%, providing a clear boost to the entire energy and chemical sector.
1. Background and Drivers of the Crude Oil Surge
This round of crude oil rally was driven by multiple factors: First, escalating geopolitical tensions in the Middle East, with the Strait of Hormuz facing navigation disruptions, intensifying market concerns over potential supply disruptions. Second, peak summer energy demand season in major global economies accelerating inventory drawdown. Third, a weaker US dollar supporting commodity prices. The convergence of these bullish factors pushed crude oil bulls to drive the largest single-day gain this year for both WTI and Brent.
2. Impact on Commodity Plastics (PE/PP/PVC) Markets
Polyethylene (PE) Market
On the cost side, the crude oil surge directly pushed up ethylene cracking costs, significantly increasing production costs for PE manufacturers. On the supply side, domestic PE plant maintenance losses this week (July 17-23) were approximately 119,100 tons, down 2.65 tons week-over-week, indicating the maintenance peak has passed and domestic supply is expected to increase. Demand remains weak, with linear futures running soft recently, dampening market sentiment. Downstream procurement enthusiasm is low, with mostly rigid small orders. LLDPE mainstream quotes at 7,800-8,100 yuan/ton, LDPE at 9,000-9,600 yuan/ton. Short-term PE market is expected to fluctuate amid cost support and supply-demand tug-of-war.
Polypropylene (PP) Market
PP futures have been oscillating narrowly recently, with traders cautious and spot prices largely stable with minor adjustments. Oil-based PP margins continue to be squeezed, providing market floor support. However, downstream factory orders are recovering slowly, procurement appetite is weak, and the off-season demand characteristics remain evident. Fu Lian T30S mainstream quotes at 7,100-7,400 yuan/ton. Overall, cost support versus weak demand continues to play out, with short-term PP likely to maintain range-bound consolidation.
PVC Market
The PVC market faces dual pressure from costs and demand. Spot market prices mostly declined, with traders selling flexibly based on their own costs and inventory, offering slight discounts to move goods. Guangzhou market calcium carbide process 5-type PVC mainstream quotes at 5,580-5,680 yuan/ton, Shantou market around 5,780 yuan/ton. Currently in PVC's traditional off-season, downstream profile and pipe manufacturers have low operating rates, with weak procurement willingness and slow social inventory drawdown. Short-term PVC market is expected to remain weak and range-bound.
3. Outlook and Risk Alerts
Currently, the plastics market presents a differentiated pattern of "strong feedstock, weak finished goods," with industry chain profits tilting toward the upstream. Crude oil is expected to maintain strength in the short term supported by geopolitical risks, but investors should watch for downstream negative feedback accumulation. If commodity plastics prices continue to rise following costs, it will further compress profit margins for product manufacturers, potentially suppressing demand release in the medium term. Key watch points: Strait of Hormuz situation developments, domestic PE/PP new capacity release pace, and changes in end-product manufacturer orders.
(Data sources: Longzhong Information, Zhuochuang Information, JLC, CLS, for reference only)
