Light Grade P Material and Group Fuel F Material: Prices Decline Amid Rising Oil Prices,Export Outlook Forecast
Recently,the global market for light grade P material and group fuel F material has witnessed a gradual price decline,a counterintuitive trend against the backdrop of soaring international crude oil prices. Industry analysts point out that this phenomenon is driven by a combination of supply-demand dynamics,cost transmission lags,and market expectations,while the export prospects of the two materials in the coming months will be jointly influenced by oil price fluctuations,global demand recovery,and trade policy changes.
As key derivatives of the petrochemical industry,P material and F material have long maintained a close correlation with crude oil prices. Historically,rising oil prices usually push up the production costs of petrochemical products,leading to a corresponding increase in the prices of downstream materials. However,since March 2026,as international crude oil prices have surged driven by geopolitical tensions in the Middle East and OPEC+ production cuts — with Brent crude futures prices approaching the $110 per barrel mark and the annual average price expected to hover between $80 and $100 per barrel — the prices of P and F materials have instead shown a continuous downward trend.
Industry insiders explain that the core reason for this reverse trend lies in the imbalance between supply and demand. On the supply side,domestic production capacity of P material (mainly PP particles) in major producing countries such as China has continued to be released,ensuring sufficient supply. Data shows that China's PP particle exports reached 244,100 tons in February 2026,maintaining a net export pattern,which has further increased the global supply volume. For F material,a type of petroleum-based fuel classified according to national standards,its production capacity has also remained stable,with no significant supply shortages reported. On the demand side,the global downstream industries of P and F materials,including packaging,textiles,and industrial fuels,are still in the recovery stage,with weak demand momentum failing to keep up with the growth in supply,resulting in inventory accumulation and subsequent price declines.
In addition,the lag in cost transmission has also exacerbated the price decline of the two materials. Crude oil prices account for more than 65% of the production costs of P material,and every $10 per barrel fluctuation in crude oil prices will affect the production cost of P material by about 800-1200 yuan per ton. However,due to the current sluggish demand,manufacturers are unable to fully pass on the increased costs to downstream customers,which has squeezed profit margins and forced them to reduce prices to destock. For F material,although its production cost is closely linked to crude oil,the weak demand in the global fuel market has limited its price upside,leading to a passive decline alongside the adjustment of the overall petrochemical market.
Looking ahead to the export prospects of P and F materials in the next 3-6 months,industry analysts hold a cautiously optimistic attitude,with specific trends depending on three key factors.
First,the trend of international crude oil prices. It is predicted that crude oil prices will fluctuate at a high level in the short term (April-May),possibly reaching $100-120 per barrel,then gradually fall back to the $85-100 per barrel range in the medium term (June-September),and stabilize at $70-90 per barrel in the long term (October-December). If oil prices stabilize at a reasonable level,the cost pressure on P and F material manufacturers will ease,which will help stabilize export prices and enhance the competitiveness of export products. However,if geopolitical tensions escalate further and oil prices surge beyond $120 per barrel,the cost pressure will increase significantly,which may suppress export volume.
Second,the recovery of global downstream demand. With the gradual recovery of the global manufacturing industry,the demand for P material in the packaging,automotive,and textile industries is expected to pick up,especially in Southeast Asia,the Middle East,and other major export markets. Data shows that China's PP particle exports are expected to increase month-on-month in March 2026,with the net export scale further expanding. For F material,as the global economy recovers and the demand for industrial fuels and transportation fuels increases,its export volume is expected to achieve a modest growth,especially in emerging markets with strong infrastructure construction momentum.
Third,changes in trade policies. The recent signal of a possible reduction in Sino-US tariffs has injected confidence into the global petrochemical product trade market. It is expected that if the US further reduces tariffs on Chinese plastic and fuel products by 5%-10% in 2026,it will significantly promote the export of P and F materials to the US market. At the same time,trade frictions and policy adjustments among other major economies will also have an impact on the export of the two materials; for example,the strengthening of environmental protection and recycling regulations in the European Union may affect the export of F material to the European market.
In summary,the price decline of P and F materials amid rising oil prices is a temporary phenomenon caused by the current supply-demand imbalance and cost transmission lag. In the next few months,as global demand recovers and oil prices stabilize,the export of P material is expected to maintain a steady growth trend,relying on sufficient supply and price competitiveness; the export of F material will show a modest recovery,driven by the recovery of global industrial demand.
