China PE Market Weakens with Falling Prices
Domestic Petrochemical Inventory: Sinopec and PetroChina's polyolefin inventory totaled 830,000 tons, a decrease of 10,000 tons from yesterday.
PE Spot Market Analysis: Today, the domestic PE market showed an overall weak trend. In North China, prices for linear, high-density, low-density film, and low-density fiber grades all fell compared to yesterday, with price reductions ranging from 20-150 yuan/ton. In East China, prices for linear and high-density grades fell, with reductions ranging from 20-200 yuan/ton, while prices for low-density film and low-density fiber grades remained stable.
In South China, only the price of low-density fiber grades remained unchanged from yesterday; prices for linear, high-density, and low-density film grades all fell, with price reductions ranging from 50-150 yuan/ton. Mainstream quotations from polyethylene producers remained largely stable, with differentiated price adjustments in the market.
Ex-factory prices for some grades declined, with reductions ranging from 50-500 yuan/ton, while only a very few grades saw slight increases of 80 yuan/ton. Affected by upstream price adjustments, merchants in the distribution chain adjusted their selling prices accordingly, leading to a continued decline in the overall market price. Faced with the weakening market, market participants held a bearish sentiment, with a growing bearish atmosphere.
Most merchants chose to remain on the sidelines and adopted a conservative approach to pricing. End-user procurement also became cautious, with less aggressive purchases and a preference for one-on-one negotiation in transactions. Overall, the trading atmosphere was sluggish, with transaction volume remaining weak, indicating significant pressure on the market.
PE Spot Market Forecast: In the futures market, the L2609 contract price fluctuated upwards in the night session, then retreated after reaching a high. The price gapped down and weakened rapidly in the morning session, continuing its downward trend in the afternoon session, before fluctuating within a low range. Currently, the polyethylene market is entering its traditional off-season, with end-user procurement slowing down overall, and a wait-and-see attitude gradually spreading throughout the market.
Downstream enterprises are adopting a cautious approach, with no large-scale restocking plans. They are only making occasional purchases when prices fall to low levels, resulting in sporadic and scattered buying activity. Faced with sluggish trading, traders' willingness to offer discounts to move inventory has diminished, and overall quotations have remained stable.
The cautious sentiment from both upstream and downstream sectors has kept market activity weak, with overall transaction volume remaining low and a lack of effective upward momentum. Looking at the current market, weak demand remains the core factor hindering market trends, and the off-season pattern is unlikely to change quickly in the short term. Based on a comprehensive assessment of the situation, the polyethylene market is likely to continue its weak and volatile pattern, with limited price fluctuations and a slow, uneventful overall market trend.
Mainstream PE Market Prices:
PE Futures Analysis: On May 27th, L2609 opened at 7805, reached a high of 7864, a low of 7721, held 369,070 contracts, settled at 7792, compared to the previous settlement of 7803, a decrease of 11 contracts. Daily trading volume was 458,059 lots, with idle funds totaling 1.999 billion yuan and capital outflow of 40.14 million yuan.
Domestic PE Indices: According to data from TuDuoDuo, on May 27th, the domestic HDPE spot index was 9222, down 42; the LDPE film spot index was 10602, down 125; and the LLDPE spot index was 8452, down 52.
Shenhua Auction Statistics: Linear PE auction volume was 0 tons, and transaction volume was 0 tons. High-density polyethylene auction volume was 100 tons, and transaction volume was 0 tons. The auction volume for low-pressure gas today was 100 tons, and the transaction volume was 0 tons.
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