A Glance of China Oil Market 20260601

On the demand end, the government will likely lower the guiding refined oil retail prices in the next round of price adjustment, and the gas stations have extended the promotions, benefiting the sales. In addition, the reduced rains will slightly boost refined oil consumption as well.

A Glance of China Oil Market 20260601

China's refined oil exports bottom out in Apr

China's exports of refined oil products fell sharply both month-on-month and year-on-year in April, influenced by geopolitical tensions and domestic supply security policies, despite high export margins. Nevertheless, there are expectations of a relaxation on export control in May against high inventory and lucrative export margins. In April 2026, China's total refined oil exports fell sharply to 1.1344 million tonnes, down 53.89% month-on-month and 64.36% year-on-year from 3.1830 million tonnes in April 2025, based on data from the General Administration of Customs of the People's Republic of China (GACC). Read Full Story

China PP faces heightened risks of a high-price pullback

As major easing signals emerge in the Middle East conflict and the potential lifting of the Strait of Hormuz blockade, international oil prices have fallen sharply. As of May 25, ICE Brent crude was quoted at $96.14/bbl, down 7.15% from May 22. Thus, polypropylene (PP), a downstream derivative of crude oil, faces heightened risks of a high-price pullback. Geopolitical tensions had kept feedstock costs for PP (including crude oil and propane) elevated, allowing PP prices to remain high even during the traditional off-season. Should US-Iran negotiations achieve substantive breakthroughs, market anxiety over feedstock supply disruptions will quickly weaken, and the geopolitical risk premium embedded in oil prices will be rapidly squeezed out. Read Full Story

China PE market to see supply shortage

China's polyethylene (PE) market will face tight spot availability in the short term. Major new capacity has been delayed until August, creating a supply gap in H1 2026. Coupled with widespread plant turnarounds and weak imports, spot supplies will remain constrained. The market is caught between near-term tightness and long-term surplus expectations, capping price downside during the off-peak season. A total of 6.45 million tonnes of new PE capacity is planned for 2026, with most start-ups delayed to August or later. Read Full Story