The petrochemical complex faced renewed headwinds on Wednesday, with futures contracts for key polymers on the Dalian Commodity Exchange extending losses amid persistent concerns over demand recovery. Polypropylene, linear low-density polyethylene (LLDPE), and polyvinyl chloride (PVC) futures all closed lower, dragging down sentiment across the wider value chain.
Polypropylene contracts settled at CNY 7,021 per ton, slipping by CNY 51 from the previous session, while LLDPE fell to CNY 7,364 per ton, a decline of CNY 63. PVC futures bore the heaviest pressure, retreating to CNY 4,949 per ton, a drop of CNY 77. Parallel weakness was also evident in upstream feedstocks, with paraxylene, purified terephthalic acid (PTA), and monoethylene glycol (MEG) all registering losses, underlining the depth of bearish sentiment.
Traders note that the decline reflects a broader retreat in risk appetite as Chinese industrial demand continues to underperform expectations despite earlier hopes of a seasonal rebound. Local sellers have been reluctant to lower physical offers, attempting to stabilize margins after recent restocking, but the persistent slide in futures suggests mounting strain that could spill into the spot market in the days ahead.
This latest downturn in Asia coincides with stability in the United States and European olefins markets, where ethylene and propylene assessments held largely flat earlier in the week. In the US Gulf, ethylene was last assessed at 24.00–24.50 cents per pound, unchanged from Friday, while polymer grade propylene remained steady at 35.00–35.50 cents. European benchmarks mirrored this pattern, with subdued trading activity keeping prices flat, though industry sources highlighted muted buying interest.
The divergence between Asian futures weakness and Western price stability underscores the global petrochemical sector’s fragile equilibrium. For producers, the challenge is now twofold: containing costs in the face of slipping monomer benchmarks while navigating the risk of further demand deterioration. For buyers, the futures-driven slide presents an opportunity to secure material at more favorable terms, though the timing of when physical prices realign with derivatives remains uncertain.
Market observers warn that unless signs of demand revival emerge in China’s downstream sectors, the futures-led correction could extend into September, pressuring global sentiment. The outlook therefore hinges not only on the trajectory of crude and naphtha inputs but also on the pace of industrial consumption recovery, particularly in packaging, automotive, and construction segments that rely heavily on PP, LLDPE, and PVC.
The sharp retreat in Dalian contracts serves as a reminder of the volatility still embedded in global polymers. As one analyst remarked, “Stability in the West does not shield the market from Asia’s gravity. Futures weakness in China sets the tone for the entire value chain.”
