In early March 2026, the domestic chemical market experienced significant fluctuations, showing a pattern of "more rises than falls" with a notable product differentiation. The main driving factor was the supply chain risks and cost increases caused by the tense geopolitical situation in the Middle East. 1
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Recent market performance: Futures and spot markets are linked, with increased volatility
The futures market experienced a "roller coaster" pattern: On March 9th, due to the sharp rise in international oil prices and the disruption of shipping in the Strait of Hormuz, the main contracts of domestic energy and chemical commodities futures witnessed a wave of涨停 (涨停 means "stall price" or "limit-up" in Chinese, referring to a situation where a stock or futures contract reaches its upper limit and stops rising). More than ten varieties, including methanol, styrene, and ethylene glycol, reached the涨停. However, on March 10th, as international oil prices rapidly dropped from their peak, the energy and chemical futures all declined, with significant drops in crude oil, methanol, and ethylene glycol among others. This reflects that market sentiment is highly sensitive and rapidly changes under short-term stimulation. 2
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The spot market has generally risen, and the prices of some products have increased significantly: On March 10th, among the commodities listed in the price fluctuation chart, there were 74 types of chemicals that rose compared to the previous month. Among them, 21 types had an increase of more than 5%. The top three rising commodities were benzaldehyde (31.70%), PX (23.26%), and diethylene glycol (15.74%). At the same time, due to cost-push factors and expectations of tight supply, the prices of many products such as TDI, PX, pure benzene, and phenol have risen by more than 10% in the recent period, with some exceeding 20%. 1
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Increased attention to funds: The strong performance of the futures market has been transmitted to the A-share market. According to Wind data, as of March 4th, the basic chemicals (Shenwan) index has received net inflows of funds recently. 1
Core driving factor: Supply chain risks driven by the situation in the Middle East
The fundamental reason for the recent sharp fluctuations in the market lies in the escalation of the geopolitical situation in the Middle East. Its impact on the global chemical industry chain is mainly reflected in the following aspects:
Critical shipping route disruption: The Strait of Hormuz handles more than a quarter of the global maritime oil trade. The tense situation has led to a sharp reduction in the number of ships passing through the strait from 138 per day to just 8, with a 94% drop in traffic. This has directly affected the maritime logistics of crude oil, liquefied natural gas, and chemical products. 3
Raw material costs have soared sharply: The international crude oil price has risen significantly due to this factor, and as the "source material" for the chemical industry, its price increase has directly pushed up the production costs of numerous downstream chemical products. 3
The risk of "raw material supply disruption" has intensified: As a major global importer of chemical products, China sources over 50% of its methanol and sulfur products from the Middle East and Iran. The disruption of shipping has led many refineries in Asian countries to consider reducing their operating rates, and there is a risk of a concentrated cancellation of import orders for naphtha. If the strait remains closed, the inventory of naphtha in Asia may be exhausted within four weeks, forcing more chemical plants to reduce production or shut down. 1
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Leading enterprises declare force majeure: The chemical industry giant Wanhua Chemical, due to the disruption of logistics caused by the situation in the Middle East, officially announced on March 7th that it would activate the force majeure clause for all its products in the Middle Eastern countries. This move further intensified market expectations of supply shortages. 3
The price trends of major chemical products are diverging.
Although the market as a whole has risen, the price movements of different products vary significantly due to supply and demand factors:
Leading products in terms of increase:
Phthalic anhydride, PX, diethylene glycol: They ranked among the top three in terms of increase during the monitoring on March 10th. 5
TDI (a key raw material for polyurethane) : Due to the force majeure situation of Wanhua Chemical and the maintenance of the production facility, there is a strong expectation of tight market supply, and the price has risen significantly. Cangzhou Dazhao raised the payment price of TDI to 20,000 yuan per ton on March 9th. 3
Graphite electrodes: Due to the continuous increase in the prices of core raw materials such as petroleum coke and needle-like coke, the industry has decided to uniformly raise the price by 1,000 yuan per ton. 7
Products with significant declines:
Toluene, pure benzene, phenol: They ranked among the top three in terms of decline during the monitoring on March 10th. It is worth noting that phenol experienced a sharp increase from March 1st to 9th, but the price saw a correction on March 10th, reflecting the high volatility of the market. 5
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Lithium carbonate: The reference price of battery-grade lithium carbonate dropped by 7.51% from March 1st to 10th. This trend is contrary to that of most chemical products, indicating the independence of its market logic. 8