What's New

Cost pressure forces the industry leader to adjust prices. In its letter, Kingfa stated that, as the Middle East situation continues to disrupt markets and international oil prices remain high, the prices of core petrochemical raw materials for modified plastics have been pushed up directly, while chemical additives, energy, and production and processing costs have all risen in step. Although Kingfa has used lean operations, supply-chain optimization, and other measures to absorb cost pressure, the continued rise in raw material costs has far exceeded what it can absorb internally. In order to uphold product quality, guarantee stable supply, and preserve the long-term healthy cooperation between both sides, the company has, after careful assessment, decided to implement price adjustments on the relevant products. This adjustment is truly forced by the situation; Kingfa deeply values its strategic cooperation with customers and looks forward to overcoming these difficult times together with them. In terms of the products affected, this adjustment covers almost all of Kingfa's modified plastics products, including modified PE, PP, PVC, PS, ABS, PC, PA, PA66, and PBT. As for the increase, modified PA6 saw the largest rise at 2,500 yuan per ton (USD 400 per ton), while other products were raised by 1,000–2,000 yuan per ton (USD 150–300 per ton).

According to Kingfa's previously announced results, its revenue in the first half of 2026 was 34.118 billion yuan, up 7.85% year on year. With product prices being raised, its revenue may continue to improve in the second half of the year.

Raw materials rise across the board, with PP, PA6, and PE posting sharp gains this year. Behind Kingfa's price adjustment is the broad strengthening of plastics raw materials seen throughout this year. Affected by geopolitical disruption in the Middle East and rising crude oil prices, prices of domestic PE, PP, PA6, and PA66 have risen sharply this year. According to data monitored by the Buyhuasu Research Institute, as of October 8, in the East China market, PP (taking EPS30R as an example) was up 63%, PA6 (taking regular-spun bright premium grade as an example) was up 52%, and PE (taking Lanzhou Petrochemical 2426H as an example) was up 45%. Other grades, such as PA66 and PVC, also rose by varying degrees. Raw material gains have far exceeded the normal cost-absorbing capacity of modified plastics producers, making price adjustment inevitable.

Futures and spot prices move together; plastics prices continue to rise sharply after National Day. The strong raw material situation was further confirmed after the National Day holiday. Following the holiday, domestic plastics futures prices continued to rise sharply. At the time of writing, PP futures were up 669 yuan per ton, a gain of 7.8%, and PE futures were up 508 yuan per ton, a gain of 6.2%. Alongside the rise in futures, domestic spot prices also rose by 150–300 yuan per ton. Analyzing the drivers of this round, first, crude oil remains at a high level and the Middle East situation shows no sign of easing, providing solid cost support; second, import supply has been restricted, tightening supply at the margin; third, domestic petrochemical inventories did not build significantly during the National Day holiday; and fourth, downstream buyers entered the market to restock, creating a temporary supply-and-demand resonance.

Outlook: high-level volatility expected, and cost pass-through will continue to deepen. Looking ahead, the plastics market should retain relatively strong support in the short term, while the medium to long term depends on three variables. First, geopolitics and crude oil remain the biggest variables: with no clear sign of easing in the Middle East, if crude stays high or climbs further, the cost-support logic for various plastics grades will continue and price centers may move higher; conversely, if geopolitical risks cool and oil prices fall back, the market may face a period of correction. Second, there is the tug-of-war between peak-season demand and downstream tolerance: the fourth quarter is the traditional peak demand season for plastics, and downstream product makers have genuine restocking needs, but the rapid rise in raw material prices is also continuously squeezing end-product margins, so downstream acceptance of high-priced materials and their ability to pass costs further on to end consumer goods will determine the sustainability and pace of the increases. This collective price adjustment by modified plastics producers is exactly a reflection of costs being passed up the supply chain step by step, and more midstream companies are expected to follow suit. Third, supply-side growth is limited, which favors industry leaders: restricted imports combined with low domestic petrochemical inventories mean supply pressure in the fourth quarter is manageable overall. For leading modified plastics companies like Kingfa, which enjoy advantages in scale procurement, formulation technology, and customer loyalty, the ability to "raise prices to protect profitability" during a raw material upcycle is actually stronger.