AJC Weekly Brief

A week after India set its $766 minimum import price, export orders at Chinese PVC producers have dropped 46%. At the same time, Chinese plants are making more PVC than ever with fewer places to sell it.

The rally cools but doesn’t crack; naphtha (+4.9%) and ethylene (+3.8%) extend gains while benzene prints its first weekly decline in three weeks as Europe supplies the structural storyline: the Rhine runs too low for Germany’s crackers, Versalis mothballs Brindisi PE, and Indovinya ties up with Air Liquide on lowcarbon ethylene oxide. 

Chinese producers are selling at a cash loss into record inventory and New Delhi has just drawn a $766/tonne line under the cheapest of those cargoes.

This week's fertiliser market was driven less by simple supply–demand changes and more by execution risk. The Middle East situation has become more complex, with Hormuz and Bab el- Mandeb risks feeding directly into freight, insurance and cargo-execution costs. A sharp decline in Hormuz transits and weaker shipowner confidence are reported, and alternative routes can add around a month at sea while materially raising voyage costs. For fertiliser markets, freight is now one of the fastest-moving indicators — especially for sulphur, ammonia, urea and downstream phosphates.

A second straight week of green across the board; Hormuz and Red Sea risk keep naphtha (+9.2%) and the aromatics complex bid while the structural news cuts three ways: Germany’s chemical output slides again, Japan’s cracker utilization hits a record low, and India lets its zero-tariff window on 40 petrochemical imports expire.

Lithium carbonate futures in Guangzhou have fallen to a five-month low; not because demand cracked, but because the price rally itself summoned the supply back. Jianxiawo is pouring again, Australia is reopening pits, and Beijing is preparing to tax the very boom that kept prices up.

Feedstock pushed, aromatics ran, propylene broke ranks. Naphtha's ~4.4% national move set a rising cost  floor and the benzene chain repriced 5–6% almost in lockstep yet propylene fell 7.5% in Shandong even as  propane, its own feedstock, surged 11%. That single spread tells you more about China's PDH overcapacity  than any policy document.

This week's report shows a firmer tone across China's chemical markets, led by a sharp 15.17% jump in MTBE, along with gains in Propylene Oxide, Hydrochloric Acid, Styrene, and Acetone. The rubber & plastics segment also traded higher — LLDPE, PS, PP, and SBR all posted gains — while energy prices were mixed, with LNG and Diesel firming up but crude oil softening. Liquid Ammonia and Titanium Dioxide were among the few notable decliners. 

Global sulfur is a supply-chain game centred on the Middle East and in 2026 the centre of that game caught fire. Of ~80 Mt global output, five Gulf states (Saudi Arabia, UAE, Qatar, Iran, Kuwait) produce ~20 Mt — 24% of output but nearly half of seaborne export supply, dominating the spot trade. The core artery runs Gulf → Asia. China bought ~5.4 Mt from the Middle East in 2025 (56% of imports); Indonesia sources over 75% of its sulfur there.