Editor’s Note: In early 2026, the war in the Middle East is crossing traditional geographical boundaries, reshaping the global capital landscape and reconstructing the risk pricing logic of global capital with unprecedented intensity. From the suspension of tankers in the Strait of Hormuz to the liquidity black hole surging in the shadows of Wall Street, the &#34;butterfly effect&#34; of war is causing tremors across various asset classes.
Macroeconomic cycles and geopolitical tensions are colliding, testing the resilience of every market participant. In the face of this complex systemic shock, Tencent Finance is launching a series of content titled &#34;The Global 'Bill' of the Middle East War&#34; (https://news.qq.com/rain/a/UTR2026030905140700), reviewing the disruptions in supply chains and fluctuations in capital markets, the shift in oil pricing centers, the reallocation of safe-haven funds to precious metals, the Federal Reserve's policy constraints between inflation and recession, and the asset reassessment of Dubai as a regional financial safe haven. Through continuous in-depth observation, we hope to outline the macroeconomic context and the logic of asset evolution.
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Text by｜Gu Lingyu
Edited by｜Liu Peng
Although Trump's suggestion that &#34;the war is nearing its end&#34; has caused oil prices to retreat from their highs, the statements from Iran and Israel have kept the Strait of Hormuz—this global oil choke point—in a state of blockade. Under the expectation of a &#34;protracted war,&#34; the butterfly effect of the Middle East conflict is spreading and rapidly transmitting along the industrial chain to the heart of Chinese manufacturing.
In the past week, traffic congestion has repeatedly occurred on Baiguodong Road in Zhangmutou Town, Dongguan City, which is China's largest spot trading market for plastic bulk goods: heavy trucks over ten meters long are lined up, creating a queue of over a hundred meters. Some truck drivers arriving in the morning still haven't reached their unloading number plates by midnight.
An industry insider stated that he has never seen such a rush for goods in his 15 years in the business.
The source of all this is the war in the Middle East. As a typical intermediate product, plastic's upstream is oil, and its downstream flows to various factories in electronics, automotive, home appliances, and more. The recent US-Iran conflict has caused oil prices to skyrocket, putting pressure on the entire industrial chain.
On March 9, WTI crude oil peaked at $119.48 per barrel, and Brent crude oil reached $119.5 per barrel, an increase of about 78% compared to before the conflict. In the chemical market, domestic trading prices from sources like Jintou Network show that the main contract for polypropylene (PP) PP2605 hit the limit up, closing at 8,034 yuan/ton, a single-day increase of 454 yuan/ton; the main contract for polyethylene (PE) plastic 2605 closed at 7,944 yuan/ton, up 449 yuan/ton.
So, is this rush for goods due to real demand increase, or panic buying? How long will it last? What impact will it have on the supply chain?
On March 9, when Tencent News' &#34;Periscope&#34; inquired locally about the reasons for the rush to purchase, a senior business person from Dongguan stated that the plastic buying frenzy in Zhangmutou, while largely driven by traders' speculative hoarding behavior under the psychology of rising prices in the short term, could lead to fluctuating increases in plastic prices if the Middle East conflict does not ease soon.
In other words, although the fundamentals are controllable, when an emotion-driven bubble meets the reality of overcapacity, a risk in the supply chain is brewing beneath the surface.
<h2>01, &#34;When the cannon fires, gold will flow&#34;</h2>
The congestion in Zhangmutou Town is highly related to its industry status.
This town, covering an area of 118 square kilometers and housing nearly 8,000 plastic market entities, is the largest spot trading market for plastic bulk goods in the country, with an annual cargo throughput exceeding 7.5 million tons and an annual trading scale exceeding 100 billion yuan.
In other words, Zhangmutou Town is the barometer of plastic trading in China; however, the rush for goods happened so unexpectedly that no one saw it coming.
A representative from a local business association in Dongguan stated that the local plastic industry was also caught off guard, and when the traffic jam began, &#34;everyone from top to bottom was investigating the reasons.&#34;
On February 28, the United States and Israel launched a joint military strike against Iran. The conflict directly threatened the global energy transport choke point—the Strait of Hormuz. This strait accounts for about 20% of global oil supply and 27% of maritime crude oil trade, with over 80% shipped to Asian markets. More critically, over 60% of Asia's maritime naphtha imports rely on the Middle East.
International oil prices surged in response. As of March 9, New York crude oil futures briefly broke through $115 per barrel, soaring 78% from $67.02 on February 27, before the conflict.
Crude oil is at the very top of the petrochemical industry chain, and subsequently, the entire industry chain began to fluctuate. Price surges rapidly transmitted downstream along the chain of &#34;crude oil—naphtha—olefins—plastic raw materials.&#34;
The Asian petrochemical market is highly dependent on naphtha supply from the Middle East, and the blockage of the strait has led to a crisis in raw material supply for Asian cracking facilities. South Korean petrochemical giant YNCC and Indonesian petrochemical producer Chandra Asri announced that they faced force majeure, with multiple facilities at risk of reducing output or shutting down.
Under the dual expectations of rising costs and shrinking supply, the domestic chemical futures market reacted first. From March 2 to 4, futures contracts for methanol, pure benzene, propylene, ethylene glycol, polypropylene (PP), and plastics all hit the daily limit.
The spot market followed closely behind. The commonly used plastic bag raw material LDPE skyrocketed by 18.92% in just a few days, increasing by 1,633 yuan per ton; some raw materials like ABS and PC saw increases exceeding 40%.
Global chemical giants also issued price increase notices in quick succession. Wanhua Chemical, BASF, and subsidiaries of PetroChina and Sinopec all announced price hikes.
Against this backdrop, for traders in Zhangmutou Town, the opportunity to make money has arrived.
<h2>02, Concerns After Gaining Pricing Power</h2>
To clarify the throughput capacity and price influence that Zhangmutou Town possesses in this global supply chain storm, one must first clarify a premise—Zhangmutou is not just a traditional distribution center, but an industrial cluster
The local area has gathered over 900 petrochemical plants from more than 60 countries and over 3,000 new material production enterprises nationwide, covering a supply chain system of plastic materials with more than 300 varieties and nearly 100,000 models. Key materials produced by local enterprises, such as &#34;low-smoke halogen-free flame-retardant polypropylene,&#34; have captured over 70% of the global market share.
Essentially, the activity level of spot trading and the cluster effect have given it a voice in responding to sudden shortages and urgent demand for goods.
In the past week, the trading market in Zhangmutou Town has seen extreme phenomena such as dealers hoarding goods to drive up prices and &#34;one price per hour.&#34; Local market quotes have overall broken through the price highs of nearly five years.
Traders are worried about even higher prices in the future, initiating a mode of hoarding and stockpiling. Downstream manufacturing enterprises, including electronics, home appliances, and packaging factories, are also rushing to stock up due to fears of uncontrollable raw material costs.
This herd mentality based on &#34;buying on the rise and not on the fall&#34; and panic-driven stockpiling has led to a massive influx of orders into Zhangmutou in a short period. Coupled with the fact that the post-Spring Festival period is originally a replenishment point, and the rainy weather in Dongguan in early March, a large number of trucks have concentrated on the Zhangmutou plastic market, ultimately causing significant traffic congestion on the main roads.
From 2024 to 2025, China's chemical industry is at a peak of capacity expansion, facing severe overcapacity pressure. On the demand side, although there has been growth in areas such as new energy and automobiles, overall domestic demand remains relatively stable, without explosive growth.
In other words, while the rise in chemical prices is a fact, the current rush to buy and stockpile is more driven by emotions.
<h2>03. Upstream Benefits, Downstream Woes</h2>
On March 9, the Dongguan Plastics Industry Association responded to Tencent News' &#34;Observation&#34; stating that local suppliers are experiencing phenomena such as short-term price testing and frequent price adjustments. However, the association emphasized that the geopolitical conflict in Iran primarily causes short-term cost disturbances and emotional fluctuations, with the supply fundamentals remaining stable, and local logistics have already resumed normal operations for picking up, unloading, and transporting goods.
According to the association's research on Dongguan, the raw materials in Dongguan are mainly sourced from domestic refining, non-Iranian Middle Eastern regions, and Southeast Asia, with a low proportion of Iranian sources, and no substantial supply interruptions have occurred, with only a few grades experiencing slight disturbances.
The association believes that the conflict has not impacted core supply channels, and short-term price fluctuations are controllable, with a stable supply-demand pattern in the medium to long term.
However, while the fundamentals are controllable, risks are still accumulating.
A representative from the Dongguan Plastics Industry Association told Tencent News' &#34;Observation&#34; that, based on their understanding, upstream petrochemical companies are taking the opportunity to raise prices and make irrational profits. Downstream manufacturing enterprises, however, are generally adopting a wait-and-see attitude towards high-priced sources due to insufficient orders and weak demand, with no substantial growth in overall downstream demand.
They warned that a large amount of high-priced goods is accumulating in the trading segment, coupled with the prevalence of short positions, leading to rapid accumulation of market risks, which may trigger concentrated risks such as funding chain breaks.
A PET raw material trader stated that raw material prices have not fluctuated so violently in many years, and everyone wants to seize this opportunity. Another industry insider expressed concern, &#34;I don't know how long this trend can last.&#34;
On March 9th, CCTV News reported that Iranian Parliament Speaker Mohammad Baqer Qalibaf stated that if the current conflict further escalates to the level of infrastructure, its economic impact will last for a considerable time both regionally and globally. In this case, international oil prices may remain at a three-digit level for quite some time.
Unlike the excitement in the upstream sector, downstream manufacturers are currently in a state of anxiety. Plastics are a fundamental raw material that runs through the manufacturing industry, and price fluctuations have a strong transmission effect throughout the industrial chain. Downstream industries such as packaging, home appliances, automobiles, express delivery, and daily necessities will all face corresponding cost pressures.
They are aware that there are those in the upstream sector speculating and hoarding to drive up prices, yet they cannot help but worry about their thin profit margins being affected. Some downstream manufacturers have reported receiving notices of a 30% price increase for upstream raw materials, and they are prepared to communicate price increases to their customers

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The outbreak of war in the Middle East has triggered a global capital reshaping, leading to a plastic buying frenzy in Zhangmutou Town, Dongguan, not seen in 15 years. Due to the US-Iran conflict causing oil prices to soar, the plastic industry chain is under pressure, with significant increases in polypropylene and polyethylene prices. Industry insiders point out that the buying spree is mainly speculative behavior by traders, but if the conflict continues, plastic prices will continue to fluctuate and rise, increasing supply chain risks. As a center for plastic trading in China, the market dynamics of Zhangmutou Town will affect plastic prices nationwide

Under the flames of war in the Middle East, Dongguan has seen a plastic goods rush not seen in 15 years