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After the National Day holiday, plastic resin prices have risen again, with some materials jumping by a thousand or even two thousand yuan per ton, and daily price fluctuations remain wide.

Unlike previous price hikes driven by stronger demand, this round is being pushed by low crude oil and petrochemical inventories, while end-market demand remains very weak. 

Terminal orders have not increased; raw material costs are climbing fast, yet finished product prices cannot be raised accordingly, leaving plastic products manufacturers squeezed in the middle and facing four layers of pressure.

The first layer is that existing orders easily turn into losses. Many factories took on long-term contracts at locked-in prices before the holiday, but once production resumed after the break, raw material costs suddenly surged, meaning every additional order produced loses money. Downstream customers strongly resist price increases and refuse to adjust upward in step, so manufacturers have to absorb the cost themselves, pushing profits to zero or into the red.

The second layer is growing caution about accepting new orders. Taking orders carries the risk that further raw material price rises will eat up margins, but turning orders away still means rent, depreciation, and labor costs continue. Many small and mid-sized factories have cut operating rates, with some machines idled while they wait and see, and in some cases competitors are willing to take orders at a slight loss, which further suppresses processing fees.

The third layer is procurement dilemmas. Before the holiday, most factories expected prices to fall and kept inventory levels low, but the market moved in the opposite direction. With spot prices continuously rising and volatile, manufacturers can only buy as much as they need for immediate production, making any speculative stocking a major risk.

The fourth layer is rising customer churn. Price-sensitive end customers are pushing for lower prices and switching suppliers; small and mid-sized firms that compete only on price without technical barriers are hit first, and some smaller plants have chosen to cut output temporarily or shut down while waiting for clarity.

Facing these compounding pressures, plastic products companies have had to change their playbook.

In order-taking, they have abandoned long-term locked pricing, negotiating each new order individually and linking quotes to raw material movements; they proactively discuss cost-sharing with existing customers and adjust prices in small, staggered increments, while simply rejecting high-risk, low-margin orders and preferring to cut production rather than run loss-making business.

In procurement, they have shifted from stockpiling to lean inventory and just-in-time purchasing, keeping only a few days of necessary stock; financially stronger mills sign short-term price-lock agreements with upstream suppliers to hedge risk while also comparing quotes across multiple resin vendors.

In production, they are squeezing costs internally: strictly controlling offcut and color-change waste, scheduling production in off-peak windows to reduce idling electricity costs, optimizing shift rosters, and strengthening equipment maintenance to minimize material loss.

In product strategy, they are no longer competing purely on low prices but shifting toward customized parts and functional products, deepening their presence in niche segments with technical barriers, and cultivating high-quality customers who can accept reasonable price adjustments.

In summary, this market rally is not demand-driven, and cash flow is the first line of defense. Under current market conditions, many plastic products companies are no longer competing on who has the largest capacity; instead, the focus is on how stable a company's cash flow is, how good its customer quality is, and how strong its raw material cost control capability is. Small factories with tight cash flow and heavily commoditized products face the greatest pressure, while mills with proprietary formulation capabilities and a stable base of quality customers are clearly more resilient against market swings.