The ongoing geopolitical conflict in the Middle East is reshaping the market landscape of the plastics and chemical industries. The turmoil in the Strait of Hormuz has pushed international oil prices above $100 per barrel, significantly driving up the cost of upstream monomers such as ethylene and octene. However, high-end polyolefin elastomers (POEs), polyolefin plastics (POPs), and olefin block copolymers (OBCs) have shown strong demand resilience in this price increase. Cost transmission and domestic substitution are inseparable According to a recent weekly report by Cinda Securities, international oil prices remained high this week, with the average weekly price of Brent crude oil reaching $97.18 per barrel, up 18.49% month-on-month. Supported by strong cost pressures, the price of polyolefin products has risen sharply. However, the price differential for high-end elastomer materials actually improved slightly, indicating strong market demand for high-performance materials. It is worth noting that at the beginning of 2026, PetroChina Dushanzi Petrochemical achieved large-scale production of POE using gas-phase technology, completely breaking the long-standing foreign technology monopoly on this material. This key material, which was once 95% dependent on imports, has officially entered the era of “Made in China”. Industry experts pointed out that POE, as the “invisible armor” of photovoltaic modules and the lightweight core material of new energy vehicles, not only saves more than 20 billion yuan in costs for the photovoltaic industry chain every year, but also completes the complete chain of “refining olefins-high-end polyolefins”. Strong demand in downstream applications Against the backdrop of the continued high-level boom of the photovoltaic industry and the trend of lightweight new energy vehicles, the demand for high-end polyolefin elastomers such as POE/POP/OBC is rising rather than declining. Unlike bulk general-purpose plastics, these materials maintain strong pricing power and demand resilience during rising cost cycles due to their excellent weather resistance, elasticity, and processability. The industry expects that as the situation in the Middle East continues to be tense, high-end polyolefin materials and high-tech barriers will become a “safe haven” in this wave of rising prices.
