China PE Market Weak Volatility
Domestic Petrochemical Inventory: Sinopec and PetroChina's polyolefin inventory totaled 700,000 tons, a decrease of 35,000 tons from yesterday.
PE Spot Market Analysis: Today, the domestic PE market showed a generally stable to slightly weak trend. In North China, prices for linear, high-density, low-density film, and low-density fiber grades all declined, with the lowest market price for linear grades rising slightly. Overall, prices fluctuated between 10-80 yuan/ton. In East China, only the price of low-density fiber grades declined; prices for linear, high-density, and low-density film grades remained stable.
In South China, prices for linear and high-density grades declined, with reductions ranging from 50-100 yuan/ton. Prices for low-density film and low-density fiber grades remained stable compared to yesterday. The current PE market pricing exhibits a clear divergence. Upstream producers are implementing differentiated pricing strategies based on their own inventory levels, regional supply and demand differences, and the scarcity of certain grades.
Some companies are choosing to maintain stable ex-factory prices to solidify their market position, while others are accelerating inventory reduction and competing for orders by lowering prices by 10-450 yuan/ton. A few in-demand grades have seen price increases due to tight supply. Overall, spot supply is ample, with traders operating primarily based on market conditions.
Some are actively offering discounts to boost sales. Downstream end-users are adopting a rational purchasing attitude, strictly adhering to production schedules and replenishing inventory only as needed, avoiding blind stockpiling and maintaining only essential raw material supplies. The overall market trading rhythm is stable, without significant unilateral fluctuations.
PE Spot Price Forecast: In the futures market, the L2601 contract night session price showed a "V" shaped trend. Prices experienced a rapid and significant decline in the morning session, with a slight rebound, but the recovery was weak.
Prices remained low and volatile in the afternoon session, stabilizing slightly towards the close but not escaping the weak trend. The supply-demand imbalance in the current PE market remains unresolved, lacking core driving factors and resulting in insufficient upward pressure on prices.
On the supply side, PE production facilities are operating smoothly with no significant maintenance or production reduction plans. Previous output releases combined with inventory accumulation have led to ample spot resources, creating objective supply pressure. Downstream industries are primarily focused on immediate needs.
Companies in basic sectors such as plastic weaving and film production are mostly adopting a strategy of replenishing inventory on dips, only adding small amounts of raw materials when prices are low, showing little willingness to actively increase inventory. Industries such as agricultural film and packaging printing are affected by weak end-user demand, resulting in limited order growth and relatively restrained procurement of PE raw materials.
The seasonal impact of colder temperatures is mainly reflected in the contraction of end-user applications. Demand for greenhouse film in northern regions is entering its final stage, and the operating rate of agricultural film companies is gradually declining.
Simultaneously, the cold weather has slowed sales of some consumer goods, further weakening the demand for PE raw materials from the packaging and printing industry and further reducing market absorption capacity. Given the current situation of ample spot supply and weak demand, traders are mainly selling according to market conditions.
Some companies are offering discounts to accelerate inventory reduction, resulting in a moderate market trading atmosphere. In summary, the core imbalance between supply and demand in the short-term PE market is unlikely to improve substantially.
The lack of strong cost support, coupled with traders' strategy of offering discounts to move inventory, means the market lacks a core driver for price increases. It is expected that the polyethylene market will maintain a weak and volatile consolidation trend in the short term, with price fluctuations significantly influenced by spot inventory and regional transaction pace. Overall, the weak trend is unlikely to change.
Mainstream PE Market Prices:
PE Futures Analysis: December 3rd, L2601 opening price: 6825, highest price: 6838, lowest price: 6794, open interest: 402710, settlement price: 6812, previous settlement: 6821, down: 9, daily trading volume: 186405 lots, idle funds: 1.919 billion, outflow: 27.3 million.
Domestic PE Index: According to data from TuDuoDuo, on December 3rd, the domestic HDPE spot index was 7374, down 5; the LDPE film spot index was 8621, down 17; and the LLDPE spot index was 6917, down 36.
Shenhua Auction Statistics: Linear polyethylene auction volume today was 350 tons, with 250 tons traded. High-density polyethylene auction volume today was 0 tons, with 0 tons traded. Low-density polyethylene auction volume today was 0 tons, with 0 tons traded.
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