China PE Market Analysis: Weak Consolidation
Domestic Petrochemical Inventory: Sinopec and PetroChina's polyolefin inventory totaled 720,000 tons, a decrease of 30,000 tons from yesterday.
PE Spot Market Analysis: Today, the domestic PE market showed an overall weak consolidation trend. In North China, only high-density polyethylene (HDPE) grades remained stable, while linear, low-density film, and low-density fiber grades all saw price declines, ranging from 20-200 yuan/ton.
In East China, only low-density film grades saw price increases, while linear, HDPE, and low-density fiber grades all saw price decreases, with overall price fluctuations ranging from 20-100 yuan/ton. In South China, linear and HDPE grades remained unchanged from yesterday, while low-density film and low-density fiber grades saw price declines, ranging from 40-50 yuan/ton.
Currently, PE ex-factory prices are generally stable, with only some companies adjusting their quotations, mostly by reductions ranging from 30-300 yuan/ton. Only a few specific grades simultaneously saw slight price increases, dragging down the overall market price level slightly. From the market circulation perspective, downstream receiving capacity remains limited. Procurement is largely based on a need-to-replenish principle, with no large-scale stockpiling.
Previously released positive news has been gradually digested, and the market lacks new positive catalysts to boost sentiment. Trading activity is subdued, and the overall circulation pace has slowed. There is no significant imbalance between supply and demand, and the industry is showing a stable but adjusting trend with a moderate supply-demand dynamic.
PE Spot Price Forecast: In the futures market, the L2605 contract opened higher in the night session, reaching its intraday high before quickly falling back. After a slight rebound in the morning session, prices fluctuated downwards again, breaking down in the afternoon before stabilizing weakly.
Currently, the domestic PE market has solid supply support, with mainstream plants maintaining stable operating rates. There are no concentrated maintenance or production disruptions, and supply remains ample. However, inventory reduction continues to be slow, and the pressure on the circulation side has not been effectively alleviated. Only low-priced goods, relying on cost advantages, attract some downstream restocking demand, supporting localized transactions.
Overall, market activity remains low. Demand is weak, with downstream industries entering their seasonal off-season. Agricultural film demand is gradually winding down, and packaging film purchases remain at a basic level. Factory order growth is limited, with only low-priced goods able to stimulate some transactions driven by immediate needs.
Overall, purchasing enthusiasm is low, making it difficult to efficiently reduce inventory. On the macro level, fluctuating international oil prices are dragging down the stability of cost support. The release of overseas PE production capacity, coupled with a steady increase in imported resources, is further exacerbating the pressure of ample supply in the domestic market.
While the domestic macroeconomy is steadily recovering, the transmission to end-user demand is lagging, and the recovery pace of downstream industries is slowing, resulting in insufficient demand boost. In summary, the current supply-demand imbalance remains unchanged, and low-priced transactions are unlikely to alter the overall weak market tone.
Inventory pressure and weak demand are creating a two-way constraint. In the short term, the polyethylene market lacks core positive factors, and the pattern of ample supply and weak demand is unlikely to reverse substantially, likely continuing its downward trend with fluctuations.
Mainstream PE Market Prices:
PE Futures Analysis: On December 16th, L2605 opened at 6557, reached a high of 6574, a low of 6526, held 510,153 contracts, settled at 6545, compared to the previous settlement of 6576, a decrease of 31. Daily trading volume was 300,917 lots, with outstanding funds totaling 2.337 billion yuan and net inflow of 93.06 million yuan.
Domestic PE Indices: According to data from TuDuoDuo, on December 16th, the domestic HDPE spot index was 7167, down 30; the LDPE film spot index was 8203, down 16; and the LLDPE spot index was 6558, down 15.
Shenhua Auction Statistics: Linear polyethylene auction volume today was 800 tons, with a transaction volume of 200 tons. High-density polyethylene auction volume today was 0 tons, with a transaction volume of 0 tons. Low-density polyethylene auction volume today was 0 tons, with a transaction volume of 0 tons.
Our platform connects hundreds of verified Chinese chemical suppliers with buyers worldwide, promoting transparent transactions, better business opportunities, and high-value partnerships. Whether you are looking for bulk commodities, specialty chemicals, or customized procurement services, TDD-Global is trustworthy to be your fist choice.
