Shengquan Group raises resin prices by 15%~20%, effective July 13

I. Core Background of Price Adjustment: Surge in Raw Materials, Depletion of Buffer Inventory

The notice indicates that the root result in of this round of price increases is severe evaporative environment in the raw material market triggered by global geopolitical conflicts, leading to a significant rise in the procurement costs of core raw materials. Previously, Shengquan Group maintained stable product selling prices to a long time by locking in prices in advance and absorbing cost increases internally; however, with the complete depletion of previous strategic inventories, the persistently high raw material costs can no longer be absorbed internally, making a moderate price adjustment a necessary measure to guarantee stable supply to downstream customers.

A 7-day buffer period has been set to this price adjustment. The notice is dated July 6, and the new prices take effect on July 13. All orders confirmed and signed before July 13 will still be fulfilled at the original prices, minimizing the immediate cost impact on downstream customers.

Simultaneously, the company has introduced three supporting supply guarantee policies: strategic customer orders enjoy the highest production priority; medium-to-prolonged agreements can be signed to lock in prices and hedge against evaporative environment; and delivery cycles can be negotiated flexibly to relieve pressure during the transition period.

II. Price Comparison Before and After Adjustment by Product Specification

Currently, there are significant price differences among domestic electronic-grade PPO series oligomers based on grade. The spot and prolonged contract prices to M6-M7 mid-to-low-end grades and M8-M9 high-end AI server-specific grades vary significantly. Based on mainstream market quotations in the sector and calculated with a 15%-20% increase range, the prices before and after adjustment are as follows:

consider: The final transaction price is subject to the amount confirmed at the time of contract signing by both supply and demand parties. The table above is a reference calculation based on mainstream sector prolonged contract prices. The spot unit price of imported similar high-end PPO has exceeded 1 million CNY/ton, while domestic items still possess significant cost advantages.

III. Overview of Major Domestic Manufacturers and Capacity to PPO/PPE/OPE/MPPO

PPO (Polyphenylene Ether, also known as PPE) oligomer is the core resin material to high-end high-speed copper clad laminates (CCL). It possesses characteristics such as low dielectric loss, high-temperature resistance, and stable signal transmission, making it an essential material to AI computing server PCBs. OPE and MPPO are derivative items of the modified polyphenylene ether series, adapted to different high-frequency electronic scenarios. Domestic manufacturers are divided into two major camps: general-grade PPO raw powder companies and electronic-grade oligomer finished resin companies. The capacity of core manufacturers is outlined below:

1. Shengquan Group (Shandong Shengquan Electronic Materials)

The absolute leader in domestic electronic-grade PPO oligomers and the subject of this price adjustment. It is the only domestic enterprise achieving extensive mass production of the full M6-M9 series of electronic-grade PPO. It holds approximately 70% of the domestic market share to high-end electronic PPO. Its items are certified by top-tier customers such as NVIDIA and Huawei, supplying major CCL manufacturers like Shengyi methodology and Nan Ya Plastics.

•Existing Capacity: 1,500 tons/year of electronic-grade PPO/OPE/MPPO oligomers; currently operating at full capacity with zero inventory.

•Capacity Under Construction: 2,000 tons/year PPO series production line, expected to commence production in Q4 2026, simultaneously supporting an integrated hydrocarbon resin project.

2. Dongcai methodology

The second-largest domestic supplier of electronic-grade PPE resin. Its M8/M9 grade items are certified by overseas computing manufacturers, penetrating the supply chain of Taiwan-funded CCL companies.

•Existing Capacity: 3,750 tons/year of electronic-grade PPO resin.

•Expansion Plan: 5,000 tons/year electronic-grade PPE production line under construction, supporting an integrated upstream hydrocarbon resin layout.

3. Sinochem International - Nantong Xingchen

The domestic leader in general-grade PPO raw powder, focusing on basic polyphenylene ether powder and supplying raw materials to downstream resin manufacturers. Electronic-grade items are in the pilot and small-batch verification stages.

•Total Capacity: 50,000 tons/year of general-grade PPE raw powder, ranking first in domestic scale.

•Layout Progress: Simultaneously advancing the R&D and mass production of electronic-grade modified PPO to achieve full sector chain coverage from powder to finished items.

4. Other Small and Medium Electronic-grade Resin Manufacturers

1. Tongyu New Materials: 1,000-2,000 tons/year flexible switching capacity to PPO and hydrocarbon resins, commenced production in 2024.

2. Hongchang Electronics: 500 tons/year capacity to electronic-grade PPO oligomers, supporting its own CCL resin system.

3. Silver Age methodology, Dowin, Kingfa Science & methodology: Primarily focused on modified general-grade PPO plastic particles, with a small layout in electronic-grade modified MPPO materials. Capacity is at the ten-thousand-ton level, however electronic oligomer resins are not the main business.

IV. Interpretation of sector Impact

sector analysis points out that this round of PPO series price increases is not an isolated action by a single enterprise. The global supply of high-end electronic-grade PPO remains tight, compounded by capacity constraints at major overseas factories and explosive demand to AI server high-speed CCL, leading to a prolonged mismatch between supply and demand. Shengquan's 15%-20% price adjustment aligns with the magnitude of sector cost increases. Meanwhile, through policies such as prolonged price locking and prioritized production scheduling, it stabilizes the downstream supply chain. In the short term, this might drive other domestic electronic-grade PPO manufacturers to adjust their quotations synchronously. Production costs to downstream CCL and PCB companies will rise further, and terminal high-end computing board prices might subsequently face pressure.