Plastics "Golden September and Silver October": A Lackluster Peak Season with Structural Divergence as the Main Theme

In the traditional business cycle of the plastics and chemical industry, the “Golden September and Silver October” period has always been a critical window for downstream demand recovery and increased industry production and sales. However, since 2025, due to multiple factors such as sluggish global economic recovery, geopolitical disturbances, and a slower pace of domestic consumption rebound, the peak season for downstream demand in the plastics and chemical sector is being severely tested. The industry is exhibiting distinct characteristics of “overall pressure and structural differentiation” and is currently in a key observation period of “waiting for favorable conditions.”

From the export perspective, the downstream demand for plastic products continues to face pressure, with a notable cooling at the start of the peak season. As an important application area for plastic products, the home appliance industry has shown weak performance in the export market. According to data from the General Administration of Customs, China's home appliance export volume in July fell by 4.7% year-on-year, and the export value decreased by 3%, with air conditioner exports experiencing a decline of 18.3%. Data from the industry further confirms that the export production schedules for household air conditioners from September to November have all declined year-on-year, and the export production schedules for refrigerators and washing machines also showed a downward trend in September. This situation stems from multiple pressures: following the end of the export inventory replenishment cycle in April, overseas inventories entered a high-level digestion phase, leading to a natural decline in procurement demand; the high base effect from the same period last year has significantly increased the pressure on export growth this year; uncertainties surrounding U.S. tariff policies and weakened replenishment demand in the European market have also directly suppressed the release of overseas orders.

The domestic market presents structural opportunities and has become an important force supporting downstream demand for plastic products. After the launch of National Day holiday promotions at the end of September, the domestic consumer market has gradually rebounded, with a clear trend of consumption upgrading. The proportion of smart and green home appliances has increased, driving the growth in demand for related plastic materials. Supported by the “old-for-new” appliance replacement policy, demand for major home appliances such as refrigerators and washing machines has remained stable, indirectly supporting the consumption of plastic products like PP and ABS. The new energy vehicle sector has performed remarkably, with sales maintaining rapid growth, and its demand for lightweight, high-performance plastic materials has created new growth opportunities for the industry. However, there are also concerns in the domestic market: consumers’ purchasing power is affected by the employment situation, intensifying competition in the mid- and low-end product segments; although the real estate market’s “guaranteed delivery” policy has boosted demand at the completion end and supported a short-term peak in the home renovation sector, persistently sluggish new construction starts have restricted long-term demand, resulting in weak growth in demand for building plastic materials such as PVC pipes and profiles. In addition, as consumer budgets tighten, the home decoration sector favors products with higher cost performance, which has put some pressure on demand for high-end plastic materials.

The demand differentiation trend is particularly prominent when looking at the core downstream segments of the plastic industry. In the polyester industry chain, there was a seasonal improvement in mid-August, with a noticeable increase in the operating rates of Jiangsu and Zhejiang's texturing, weaving, and dyeing compared to July. However, after entering September, the demand recovery fell short of expectations, with insufficient follow-up on new grey fabric orders and scattered foreign trade orders. End-user factories were cautious about stocking up, compounded by the impact of high temperatures, leading to a phased decline in weaving and texturing operating rates. As of September 5th, POY, FDY, and DTY equity inventories at Jiangsu and Zhejiang polyester factories were at high levels, highlighting pressure from physical inventory. End users mainly restocked based on immediate needs against the backdrop of weakening raw material prices, with a lack of market confidence. The peak season characteristics of the polyolefin industry chain demand were also not apparent, with limited improvement in downstream demand compared to the previous month. Key indicators such as the number of days of enterprise orders, finished product inventory, and operating rates were mostly in a neutral to low range compared to the same period in recent years, reflecting a slow pace of terminal recovery. Downstream companies were cautious about consumption expectations and showed weak willingness to purchase raw materials, generally maintaining a low inventory strategy and restocking mainly for sporadic immediate needs. There was only short-term demand rebound potential in situations of high device maintenance rates and low pre-season inventories.

Looking ahead to the upcoming "Golden September and Silver October" market, whether downstream demand for plastics and chemicals can continue to recover still depends on multiple variables. On the positive side, the ongoing implementation of domestic policies such as "anti-involution," "expanding consumption," and "urban renewal" continues to gain traction. If stronger stimulus policies are introduced in the future, they are expected to further unleash consumption potential. The continued advancement of the "guaranteed delivery of housing" policy may drive further recovery in demand for home decoration and household appliances. Overseas, if the Federal Reserve cuts interest rates as scheduled, it will improve the global liquidity environment and indirectly support export demand. However, risk factors cannot be ignored: overseas inventory digestion still requires time and export demand is unlikely to improve significantly in the short term; fluctuations in raw material prices may disrupt the peak season cycle. If crude oil prices come under pressure due to OPEC+ production increases or seasonal demand weakness, a negative feedback loop in downstream sectors may be triggered. In addition, the implementation of U.S. tariff policies and developments in geopolitical conflicts—both uncertainties—will directly influence demand trends.

Author: Zhao Hongyan, Expert in Market Research at Special Plastics Vision