[Key Event]
On July 20, 2026, crude oil prices surged sharply as weekend tensions between the US and Iran escalated, lifting plastic futures higher. At the open, most domestic commodity futures rose, with crude oil up more than 6%, propelling the plastic main contract up 3% to 7,913 CNY/ton — near recent highs.
I. International Crude Oil Market
- WTI crude oil futures rose 2.28% to $83.644/barrel
- Brent crude broke above $91/barrel for the first time since June 11
- Domestic SC crude oil futures surged more than 6% at open
The weekend ceasefire agreement between the US and Iran proved non-binding, dramatically raising transport risks in the Strait of Hormuz. Geopolitical premiums are concentrated and supporting continued oil strength.
II. Domestic Plastic Futures
- Plastic main contract: +3%, at 7,913 CNY/ton
- Methanol, Benzene: +4%
- Asphalt, PTA, Styrene: +3%
Strong crude oil cost support combined with bullish domestic chemical sentiment drove plastic futures higher with increasing open interest. Technical levels broke through multiple moving averages, sustaining a short-term bullish structure.
III. Spot Market Impact
Upstream ethylene cost support persists. Spot market sentiment has slightly improved, with traders showing stronger reluctance to sell at lows. However, downstream procurement pace remains slow, and genuine demand recovery is still pending. PVC market fundamentals show slight improvement with upstream dispatch improving and terminal restocking enthusiasm rising.
IV. Market Outlook
- Bullish factors: Ongoing geopolitical tensions, firm crude oil prices, strong cost support
- Bearish factors: Slow downstream demand, cautious terminal purchasing, sluggish inventory digestion
- Overall: Crude oil strength is expected to persist in the near term, supporting plastic futures in a range-bound uptrend. Watch for downstream negative feedback accumulation. Mid-term focus: August maintenance schedules and pre-September restocking.
V. Key Data Snapshot
| Product | Price Range (CNY/ton) | Note |
|---|---|---|
| Plastic (LLDPE Futures) | 7,913 | Main contract |
| PP Raffia | 7,750-7,950 | Spot market |
| HDPE | 8,200-9,200 | Spot market |
| PVC (carbide method) | 6,600-6,680 | South China, tax incl. |
| WTI Crude | $83.64/bbl | +2.28% |
| Brent Crude | >$91/bbl | First breach since Jun 11 |
VI. Key Watch Points
⚠️ US-Iran developments and Strait of Hormuz passage status; ⚠️ August PE/PP maintenance schedules; ⚠️ Domestic macro policy easing pace; ⚠️ Downstream plastic woven bag and film order trends.
Disclaimer: This content is for reference only and does not constitute investment advice. Market involves risk, decisions should be made cautiously.
