Core Focus
The US and Iran remotely signed a memorandum of understanding, opening a 60-day negotiation window. The US pledged to lift maritime blockades within 30 days, while Iran would negotiate strait management with Oman. However, the US military launched strikes on the same day, with both sides accusing each other of breaching the agreement. Iran’s Parliament Speaker stated that the strait “will not return to its former state”. Analysts commented that the signing of the memorandum marks a major breakthrough, yet its implementation outlook remains highly uncertain, and market optimism over peace talks should be treated with caution.
PP Supply
The operating rate of PP pellet plants stood at 66.25% (flat week-on-week), and that of PP powder plants hit 26.56% (flat week-on-week). Total PP inventory kept declining. The first line of Zhongjing Phase I (500,000 tons/year) is scheduled to restart this Saturday, and the second line (500,000 tons/year) will resume operation next Wednesday. PP facilities of Yan’an Refinery and Yan’an Energy & Chemical are set to undergo maintenance next week. Coal-to-chemical auctions saw strong sales, with all wire drawing-grade PP fully sold out. The new 450,000 tons/year facility at Dushanzi Tarim completed trial feeding and will run at full capacity in mid-month.
PE Supply
PE overall operating rate reached 77.59%. Inventories at PE manufacturers continued to build up, and traders’ inventories edged up. The average operating rate of downstream enterprises was 34.31%. The price of 7042 LLDPE from North China Petrochemical in Linyi stood at 8,300 yuan/ton, up 50 yuan/ton. LLDPE prices in East China fluctuated within a range of 50 yuan/ton. LDPE remained the top gainer with narrowed price hikes, while HDPE prices stayed stable.
Demand
The downstream operating rate of PP was 45.52%. The off-season persisted for plastic woven bags, BOPP films and daily-use injection molding sectors. The downstream operating rate of PE fell by 0.47% month-on-month. Driven by price hike expectations, rigid demand purchasing picked up slightly, yet restocking turned cautious amid elevated prices. Downstream manufacturers showed growing resistance to current price levels.
Profit Margins
Coal-to-PP gross profit reached 1,520 yuan per ton (high profit level). PDH-based PP recorded a loss of 252.62 yuan per ton, and PP produced from externally purchased propylene lost 409.43 yuan per ton. Oil-to-PE posted a loss of 675 yuan per ton, while coal-to-PE maintained a profit of 1,182 yuan per ton. Propylene price in Shandong held firm at a high level of 9,000 yuan per ton. High profit margins of coal-based routes boosted production willingness, whereas PDH and oil-based production routes remained under sustained pressure.
Post time: Jul-17-2026