As September arrives, China’s chemical sector steps into the traditional "Golden September" peak season. Affected by global geopolitical tensions, crude oil prices fluctuate at high levels and push up quotations of basic chemicals. The industrial chain shows a pattern of strong upstream performance and divergent downstream demand. Driven by higher costs, prices of propylene and carbon black have climbed. Nevertheless, end buyers remain cautious, creating obstacles for cost pass-through.
On the supply side, Zhenhai Development announced that its 300,000 tons/year PVC unit will be temporarily shut down for maintenance starting September 19. The outage is expected to last no more than four months, tightening PVC supply in the short run. Meanwhile, new high-end chemical material projects keep rolling out in China. Carbon-based new material and long-chain dibasic acid projects in Lanzhou New Area have entered trial production successively, accelerating the industry’s shift toward green and high-value products.
Overseas markets also face pressure. Surging natural gas prices in Europe have forced some fertilizer producers to suspend ammonia and urea facilities. Tight supply of petrochemical feedstock across the Asia-Pacific region is likely to persist. Industry insiders believe chemical prices will be backed by crude oil and plant maintenance in the near term. However, weak demand for real estate-related chemicals casts uncertainty over the sustainability of the peak-season rally. Enterprises should watch out for raw material volatility and risks in global supply chains.
