Shengquan Hikes Electronic PPO Resin Prices as AI Demand and Feedstock Crisis Bite

On July 6, 2026, Shandong Shengquan Electronic Materials Co., Ltd. issued a Product Price Adjustment Notice covering its full range of PPO, PPE, OPE, and MPPO oligomer resins. The company set an overall increase of 15 to 20 percent, with the new prices scheduled to take effect on July 13, 2026. A seven-day buffer applies, so orders that are confirmed and signed before that date will still be fulfilled at the previous prices.

PPO oligomer, also known as PPE, is the high-performance resin backbone used in the high-speed copper-clad laminates (CCL) that go into advanced circuit boards for AI servers, 5G equipment, and high-frequency networking. Shengquan is the dominant domestic producer of electronic-grade PPO in China, holding roughly 70 percent of the high-end market and remaining the only local firm mass-producing the full M6 to M9 grade range. Its output is qualified by top customers including NVIDIA and Huawei and feeds major CCL makers such as Shengyi Technology and Nan Ya Plastics. Existing capacity of about 1,500 tons per year has been running flat out with little to no inventory, and a new 2,000-ton-per-year line is expected to start up in the fourth quarter of 2026.

Shengquan links the adjustment to two pressures. First, international geopolitical conflict has driven up the cost of the upstream raw materials it needs. Second, the strategic stockpiles it had drawn down to hold prices steady are now exhausted, leaving it unable to keep absorbing those costs internally.

The move caps a build-up that has been under way since early 2026. The escalation of the conflict involving Iran pushed shipping through the Strait of Hormuz to a near standstill from around March, choking off close to a fifth of global oil and LNG flows and lifting naphtha, benzene, and other petrochemical feedstock costs. Prices for a wide range of resins, from polyethylene and polypropylene to epoxy and PPE, climbed to multi-year highs between February and May, with East China epoxy quotes rising about 40 percent after the conflict broke out. A production setback at the largest single global PPE source in April tightened supply further.

Running in parallel, surging demand for AI servers has widened the gap between supply and demand for high-end PPO. High-frequency M8 and M9 grades are essential for AI-grade CCL, and laminate prices have jumped 20 to 40 percent across the first half of 2026. On the same day as Shengquan's notice, laminate leader Kingboard issued another hike of up to 15 percent, underscoring how broad the cost pressure has become.

Before the adjustment, long-term contract prices ran from roughly 580,000 CNY per ton for mid-range M6 and M7 grades to about 780,000 CNY per ton for top-end M9 material used in AI computing boards. The increase lifts the top grade toward 930,000 CNY per ton, though imported high-end PPO already trades above 1,000,000 CNY per ton, so domestic product keeps a clear cost edge.

To reassure buyers, Shengquan is offering priority production for strategic customers, medium-to-long-term contracts that lock in prices, and flexible delivery scheduling through the transition. Analysts expect the move to set a pricing anchor that other domestic producers such as Dongcai Technology are likely to follow, pushing costs higher for CCL and PCB makers downstream and adding pressure to final high-end computing board prices. With total domestic electronic-grade PPO supply projected near 6,000 tons by the end of 2026 against demand of 7,000 to 8,000 tons, the shortfall looks set to widen.