Escalating US-Iran conflict and the potential closure of the Strait of Hormuz have led to an increase in the variety of chemical products available in China.

Escalating tensions in the Middle East and the potential closure of the Strait of Hormuz are impacting the domestic chemical market.

On March 3rd, futures prices for various domestic chemical commodities rose, with methanol, plastics, polypropylene, and ethylene glycol hitting their daily limit, while paraxylene, styrene, and asphalt rose by over 4%.

On February 28th local time, the United States and Israel launched military strikes against Iran. That evening, the Iranian Islamic Revolutionary Guard Corps announced a ban on any ships passing through the Strait of Hormuz.

The Strait of Hormuz, located on the Arabian Peninsula between Iran and Oman, is the only sea passage from the Persian Gulf to the Indian Ocean. With a width of only two miles in both directions, it is a crucial node in the global energy supply chain and a vital gateway for the import and export of bulk chemical products.

As a commodity heavily reliant on imports from the Middle East, the domestic methanol market is facing the dual pressures of rising costs and supply disruptions.

Zhao Zhengzheng, a methanol analyst at Longzhong Information, pointed out that the Middle East is a major export destination for methanol globally, with the local market highly dependent on exports, primarily to East Asia, India, Europe, and Southeast Asia.

According to Shenyin Wanguo Futures, approximately 12 million tons of methanol are shipped via the Strait of Hormuz. If the Strait of Hormuz is blocked or shipping is suspended, the methanol trade will be significantly affected.