Geopolitical factors boosted oil prices, driving the pyrolysis C9 market to strengthen.

Lead: The ongoing US-Iran conflict continues to escalate, raising the supply risk of Middle Eastern crude oil. Brent crude surged over 10% in a single week, strongly supporting the cracker C9 industrial chain from the cost side. Domestically, Gulei Petrochemical concluded maintenance and restarted operations, while multiple units increased their operating loads, resulting in a slight increase in market supply, which constitutes a minor bearish factor. The two major downstream products, industrial aromatic solvents and C9 thermal polymerization petroleum resin, saw prices rise simultaneously, with processing profits doubling and recovering. End-user inquiries and stockpiling demand were released intensively. The strong cost support from crude oil, combined with improvements in downstream demand and profitability, forms the core bullish factors. The moderate supply increase only slightly offsets this bullishness. Consequently, national C9 cracker prices rose across the board this week, and the short-term market is expected to maintain a relatively strong upward trend.

Domestic Spot Market: National average price rose moderately; regional prices were largely stable with minor adjustments.

[C9 Cracker Price Comparison 2025-2026 (RMB/ton) – data table image omitted per instruction]

Data source: Chempricehub Information

Table 1: China C9 Cracker Regional Price Comparison (Unit: RMB/ton)

Data source: Chempricehub Information

Recently, the national average price of domestic C9 cracker was 4,207 RMB/ton, up 128 RMB/ton from the previous period's 4,079 RMB/ton, an overall increase of 3.14%. Listing prices from refineries in all regions were raised comprehensively, but the increases varied significantly. North China and Northeast saw a weekly increase of 200 RMB/ton, leading the national gains. East China and Central China recorded increases of 100 RMB/ton, while South China saw a rise of 130 RMB/ton. This week, the price spread between North China and East China widened to 238 RMB/ton. The maintenance at sample enterprises in East China led to regional supply contraction, but the cross-regional arbitrage window has not yet opened, limiting cross-regional flow activities. Independent refineries continued to follow the major state-owned refineries in raising prices. The main market quotation range rose by 100-200 RMB/ton, and the atmosphere for spot transactions continued to improve.

Core Drivers: A three-factor game; cost and demand bullishness dominate the market trend.

Table 2: China C9 Cracker Industry Chain Price Comparison (Unit: RMB/ton)

Data source: Chempricehub Information

1. Cost Side: Escalation of Middle East Geopolitical Conflict, Sharp Crude Oil Rally Provides Strong Support

This week, the US-Iran conflict continued to intensify. The US signaled strikes on Houthi forces and Iranian facilities, while Iran warned that crude oil exports from the Middle East could be fully blocked. Risks to shipping in the Strait of Hormuz and the Red Sea increased significantly, leading to a concentrated market sentiment regarding weak crude supply. As of July 22, WTI rose 9.98% week-on-week, and Brent increased by 11.68%. The average weekly price of Brent jumped by $8.27 per barrel compared to the previous week, an increase of over 10%.

Despite bearish factors such as potential US-Iran dialogue for de-escalation, a weak global economy, and expectations of Fed rate hikes, the geopolitical premium completely dominated oil price trends. The strong support from crude oil costs directly strengthened refineries' price-fixing mentality, becoming the core driving force for the rise in C9 cracker prices.

2. Supply Side: Unit Restarts + Load Increases; Slight Supply Increment Creates Marginal Bearish Pressure

During this period, Gulei Petrochemical completed maintenance and successfully restarted on July 18. Coupled with multiple ethylene units raising their operating loads, the total domestic C9 cracker output reached 60,600 tons, an increase of 3,600 tons month-on-month, a growth rate of 6.32%. The industry capacity utilization rate was 76.23%, up 4.47 percentage points from the previous period.

Currently, the industry still has multiple cracking units under long-term maintenance, including Jincheng Petrochemical, Yanshan Petrochemical, Yangzi Petrochemical, Hainan Refining & Chemical, and Shenghong Refining & Chemical, totaling 541,000 tons of maintenance capacity. However, the new startups and load increases completely offset the maintenance reduction, keeping the market supply slightly loose. The supply increment exerts slight downward pressure on prices, but its strength is insufficient to offset the dual bullish factors from crude oil and downstream demand.

3. Demand Side: Downstream Operating Rates and Profits Surge Simultaneously; Sufficient Stockpiling Momentum

The market conditions and profitability of C9 cracker's two major downstream sectors both recovered significantly, leading to continuous release of end-user procurement demand:

• C9 Thermal Polymerization Petroleum Resin: Panjin Kaiheng's unit finished maintenance and restarted on July 19. The industry capacity utilization rate rose from 39.56% to 43.47%. Processing gross profit doubled from 68 RMB/ton to 136 RMB/ton, a 100% increase. Resin ex-factory quotes generally rose by 300-500 RMB/ton. The mainstream transaction price for grades 10-11 was 5,500-6,600 RMB/ton. Downstream coatings and adhesive companies stocked up at lower prices, with a noticeable increase in inquiry volumes.
• Industrial Aromatic Solvents: The national average price rose by 360 RMB/ton in a single week, an increase of 6.65%. The increase in East China reached 9.23%. Processing gross profit rose from 189 RMB/ton to 411 RMB/ton, a sequential increase of 117.46%. The gasoline market also strengthened simultaneously, stimulating bulk procurement by solvent downstream users. Transaction pace in the market continued to pick up, leading to increased rigid demand purchases of the raw material C9 cracker.

The operating rate for industrial aromatic solvents remained stable at 54.45%, with no concentrated unit shutdowns downstream. Overall demand support remains relatively strong.

Industry Chain Transmission: Cost benefits transmit from top to bottom; downstream profitability supports raw material procurement.

This week, the benefits from the crude oil price increase were fully transmitted from top to bottom to C9 cracker, downstream resins, and aromatic solvents. Furthermore, the price increases for downstream products were higher than those for the raw material C9 cracker, leading to a comprehensive recovery of profitability across the chain. The profitability of both C9 petroleum resin and industrial aromatic solvents doubled, reversing previous loss-making or low-margin situations. This alleviated financial pressure on downstream plants and increased their willingness to stock up and lock in prices, creating a positive feedback loop for demand.

Only the slight supply increment brings a weak bearish factor. In the balance between upstream and downstream, the bullish factors from demand and costs completely dominate. Holders face no selling pressure, the market negotiation center continues to shift upwards, and industry participants hold strong bullish expectations for the market.

Summary and Outlook

In summary, three bullish factors dominated the market: the Middle East geopolitical conflict pushing up crude oil costs, the doubling of profits for the two major downstream products, and the release of end-user stocking demand. The only bearish factor was the slight increase in supply from unit restarts, which had a weak suppressing effect. Overall, the bullish factors far outweighed the bearish ones. Consequently, national C9 cracker prices rose across the board this week, with transactions continuing to improve.

Looking ahead to next week, international crude oil futures are expected to maintain an upward trend, further strengthening cost support. No new cracking unit maintenance plans are scheduled. Industry output and capacity utilization rates are expected to continue rising slightly, maintaining a loose supply situation. On the demand side, no changes in C9 petroleum resin and industrial aromatic solvent operations are anticipated. Downstream gross margins are expected to continue rising to 196 RMB/ton and 450 RMB/ton, respectively. Corporate willingness to replenish inventory is expected to remain high. The strengthening gasoline market will continue to support demand for aromatic solvents.

The strong cost support from crude oil, combined with the dual improvements in downstream demand and profitability, creates multiple supports. The supply increment will only slightly constrain prices. It is expected that C9 cracker will maintain a relatively strong upward trend next week. The national mainstream transaction reference price is expected to be 4,050-4,550 RMB/ton, with a weekly price increase of approximately 100 RMB/ton. In the future, close attention should be paid to changes in the Middle East geopolitical situation, crude oil fluctuations, and the operating rates and procurement pace of downstream resin and solvent sectors.