With key PP and LLDPE contracts on the Dalian Commodity Exchange regaining some stabilization from the downswing in the previous trading day, Chinese bidders were more confident in participating in auctioning for coal-based cargoes on the Shenhua Auction Platform.
Iran has long been China’s largest supplier of LDPE. However, escalating geopolitical tensions in the Middle East now pose significant risks to this supply chain. Iran’s oil and gas infrastructure has become a potential target for military strikes, which could severely disrupt petrochemical output.
Contrary to the shock expressed by some buyers, other local traders argue that the increases were inevitable, citing previous unsustainably low price levels that have eroded profit margins across the distribution chain.
On one side, many sellers are optimistic that the rally will persist, fueled by government stimulus and geopolitical tensions in the Middle East, which could disrupt supply chains and further support prices.