March 17, 2026 — The ongoing geopolitical conflict in the Middle East is reshaping the market landscape of the plastic and chemical industry. Disruptions in the Strait of Hormuz have pushed international oil prices above $100 per barrel, significantly increasing the costs of upstream monomers such as ethylene and octene. However, high-end polyolefin elastomers (POE), polyolefin plastomers (POP), and olefin block copolymers (OBC) are demonstrating strong demand resilience during this price surge.

Cost Pass-Through and Domestic Substitution Go Hand in Hand

A recent weekly report from Cinda Securities shows that international oil prices remained high this week, with the average weekly price of Brent crude reaching $97.18 per barrel, a week-on-week increase of 18.49%. Supported by strong cost-side pressures, polyolefin product prices have risen significantly. However, the price spread for high-end elastomer materials has actually improved slightly, indicating strong market demand for high-performance materials.

Notably, in early 2026, PetroChina's Dushanzi Petrochemical achieved large-scale production of POE using gas-phase technology, completely breaking the long-standing foreign technological monopoly on this material. This critical material, which once had a 95% dependence on imports, has officially entered the "Made in China" era. Industry experts point out that POE, as the "invisible armor" for photovoltaic modules and a core material for lightweighting new energy vehicles, not only saves the photovoltaic industry chain over 20 billion RMB annually in costs but also completes the full "refining-olefins-high-end polyolefins" chain.

Strong Demand from Downstream Application Fields

Against the backdrop of sustained high prosperity in the photovoltaic industry and a clear trend toward lightweighting in new energy vehicles, demand for high-end polyolefin elastomers like POE/POP/OBC is rising rather than falling. Unlike bulk general-purpose plastics, these materials, with their excellent weather resistance, elasticity, and processability, maintain strong pricing power and demand rigidity during cost-increase cycles. The industry expects that as the situation in the Middle East remains tense, high-end polyolefin materials with high technological barriers will become a "safe haven" during this wave of price increases.