Modified plastics face "pressure test"! broad commodity decline, structural opportunities still unfolding

On June 17, 2026, China’s domestic commodity market saw a broad-based decline. Fuel oil and LPG fell by more than 4%, while crude oil and low-sulfur fuel oil dropped by over 3%. Benzene fell by more than 2%, and methanol, propylene, and the monthly average price of polypropylene were down by over 1%. Sharp fluctuations in upstream crude oil prices directly spilled over into the plastics industry chain—most PE markets weakened, with declines ranging from 50 to 400 yuan/ton, and sentiment turned bearish amid a steep drop in futures. Inventories at sample polypropylene trading companies fell by 8.47% from the previous week, indicating accelerated destocking in the market. With upstream raw material prices loosening and downstream buyers largely adopting a wait-and-see stance, “firm deals subject to negotiation” became the true reflection of the market that day.

While the upstream raw material side is under pressure, the technological breakthrough and capacity expansion in the modified plastics industry are accelerating in parallel.

Technical aspect: Patent-intensive implementation, continuous expansion of modification directions.

On June 17, the National Intellectual Property Administration disclosed multiple patents related to modified plastics. Wanhua Chemical was granted an invention patent for "a modified polyurethane and its preparation method." This material features a core-shell structure and chemically bonds polyurethane with polyacrylate, with the presence of nitrogen and phosphorus elements producing a synergistic flame-retardant effect, significantly enhancing both flame retardancy and impact resistance, as well as structural stability. As the world's largest MDI supplier, Wanhua Chemical's revenue is expected to reach 203.2 billion yuan by 2025, and this patent further solidifies its technological barrier in the field of polyurethane modification.

On the same day, Zhejiang Jinlidai New Materials applied for a patent for "a modified recycled polypropylene material and its preparation method." By adding components such as styrene block copolymer, β-nucleating agent, and modified glass fiber, the issue of poor toughness in recycled polypropylene due to degradation is effectively addressed. Dousheng New Materials also obtained a patent for the preparation system of ultra-thin PET shrink film functional masterbatch, achieving uniform dispersion and grafting reaction of modified components. The application boundaries of modification technology are rapidly expanding, from polyurethane to polypropylene, and from PET to nylon.

Capacity side: Leading players are accelerating expansion, and the industry landscape is becoming increasingly concentrated.

In terms of capacity expansion, leading companies in the industry have been making frequent moves. At a research briefing on June 16, Kingfa Sci. & Tech. explicitly outlined its “1438” trillion-yuan output value strategy: RMB 80 billion for modified plastics, RMB 30 billion for new materials, RMB 40 billion for green petrochemicals, and RMB 10 billion for healthcare. In 2026, the company will the expansion of its modified plastics segment into emerging sectors such as computing power. Pritty, meanwhile, is expected to see its domestic annual capacity rise to 650,000 tons, up more than 10%, as its new 150,000-ton Tianjin production line comes on stream in Q2 2026, with its domestic market share target gradually increasing from 8% to more than 15%. As of April 2026, there were 142 modified materials projects nationwide under construction or planned, each with an investment of more than RMB 50 million, making capacity expansion the main theme of the industry.

It is worth noting that fluctuations in raw material prices continue to squeeze profit margins severely. In its IPO prospectus, Zhongsu Co., Ltd. disclosed that its main products, such as PC and modified ABS, are petroleum-based modified plastics whose core raw materials are closely tied to crude oil prices. From early 2026 to late May, the main raw material PC rose by nearly 40% at its peak compared with the end of 2025, while its average price increased by about 20%. How to maintain profit resilience amid cyclical fluctuations in commodity prices is a question that every modified plastics company must face.

Outbound expansion: Southeast Asia has become a new strategic highland

In terms of international expansion, InterPlas Thailand 2026 was held in Bangkok from June 17 to 20. Kingfa participated in the exhibition under the theme “Shape · Circular · Invent,” showcasing innovative material solutions for applications in automotive, electrical and electronics, consumer electronics, and home appliances. Silver Age Sci & Tech has established a production base in Vietnam, mainly manufacturing modified plastics and smart lighting products. Southeast Asia is becoming the first stop for Chinese modified plastics companies expanding overseas.

Demand side: dual drivers — automotive lightweighting and home-appliance replacement.

In terms of downstream demand, the two major engines of automotive lightweighting and home appliance trade-in programs continue to gain momentum. A previous report from CCTV highlighted the phenomenon of passenger cars becoming "heavier and heavier," which is forcing automotive companies to accelerate the adoption of modified plastics and other lightweight materials. Industry data shows that every 100 kg reduction in vehicle weight can lower energy consumption by approximately 7.5% per 100 kilometers. On June 16, Fuwei Co., Ltd. signed a strategic cooperation intention letter with KraussMaffei China to conduct comprehensive cooperation in areas such as polymer material modification extrusion, fiber-reinforced composite materials, and lightweight technology applications. At the same time, the national trade-in subsidy policy will continue to release dividends in 2026, with first-level energy-efficient home appliances receiving a 15% direct reduction based on the transaction price, with a maximum subsidy of 1,500 yuan per item—these home appliance products' shells and structural components are important application scenarios for modified plastics.

In addition, the 2026 China Plastics (Yuyao) Plastics New Materials Industry Development Conference and the First Nylon Summit Forum, which concluded on June 11–12, brought together more than 200 experts, scholars, and corporate representatives. The forum noted that emerging fields such as new energy vehicles, humanoid robots, 5G/6G communications, and semiconductors are placing higher demands on material performance, including lightweighting, high strength, high-temperature resistance, and low dielectric properties. Huitong New Materials has also reached a strategic cooperation agreement with Nanjing Qingyan Polymer to carry out in-depth planning around the R&D and production of high-end LCP materials, aiming to break the monopoly held by overseas giants in the high-end LCP sector.

As of June 17, 2026, the modified plastics industry is facing a dual challenge of costs and demand amid the “headwinds” of plunging crude oil prices and weakening futures in the broader commodities market. At the same time, however, a wave of structural changes—including the rapid rollout of technological patents, continued capacity expansion by leading companies, faster expansion into Southeast Asia, and steadily rising demand from the automotive and home appliance sectors—is building new momentum for the industry’s growth. Short-term pressure alongside long-term opportunities may well be the most accurate reflection of the modified plastics industry today.