Oct 22 China PE Market Update
Domestic Petrochemical Inventories: Polyolefin inventories from both oil and petroleum products reached 780,000 tons, down 10,000 tons from yesterday.
PE Spot Market Analysis: Today, domestic PE market prices showed a mixed trend. In North China, only linear grades remained stable, while high-pressure grades saw a slight increase. Low-pressure film prices saw their highest prices increase, while their lowest prices decreased.
Low-pressure wire drawing grades saw their prices decline. In East China, only linear grades saw an increase, while low-pressure wire drawing grades remained stable. Both high-pressure and low-pressure film grades saw varying degrees of decline, fluctuating between 30 and 70 yuan/ton.
In South China, prices for linear, high-pressure, low-pressure film, and low-pressure wire drawing grades remained unchanged from yesterday. Currently, pricing on the PE market's supply side is characterized by a focus on stability with limited adjustments. Most manufacturers are maintaining their original ex-factory prices, with some implementing price cuts of 10-150 yuan/ton and increases of 10-50 yuan/ton, respectively, to adapt to market demand or optimize inventory structures.
Overall price adjustments are limited and scattered. From a distribution perspective, the market is under pressure due to abundant spot supply. To avoid inventory overhangs and expedite capital turnover, traders are generally adopting a profit-taking strategy. Furthermore, in the absence of clear positive market news, traders are adopting a cautious approach, adopting a wait-and-see approach.
Demand remains weak, with downstream companies generally showing limited purchasing activity, focusing solely on replenishing inventory based on rigid demand rather than proactively purchasing. This has further dampened market activity and ultimately led to a sluggish trading atmosphere. The weak supply and demand dynamics are the core drivers of the current market.
PE Spot Price Forecast: In the futures market, the L2601 contract price fluctuated weakly in the evening session, stabilized and rebounded in the morning, and then consolidated in a narrow range in the afternoon session. The current PE market is characterized by a "supply-demand game," a coexistence of seasonal benefits and current pressures.
From the supply side, on-site PE plants are operating stably overall, with no major fluctuations. However, the market's inventory drawdown is slow, and accumulated inventory from previous periods is causing persistent supply pressure, exerting fundamental pressure on the market. From the demand side, downstream purchasing is still primarily based on bargain hunting, with overall enthusiasm low. Market participants are cautious about pushing prices higher due to supply pressures.
However, seasonal and seasonal demand benefits are beginning to emerge. Gradual cooling temperatures are driving agricultural film production into its peak season. Furthermore, the packaging sector is expected to see increased stocking demand due to shopping festivals such as "Double Eleven."
These factors together provide some rigid demand support, partially offsetting supply pressures. Overall, the polyethylene market is expected to experience a period of weak consolidation and range-bound fluctuations in the short term.
Mainstream PE Market Quotes:
PE Futures Analysis: October 22nd L2601 Opening Price: 6889, High: 6956, Low: 6873, Open Interest: 549,864, Settlement Price: 6914, Yesterday's Settlement: 6869, Up 45%, Daily Trading Volume: 234,079 Contracts, Deposited Capital: 2.67 Billion, Capital Outflow: 37.9 Million.
Domestic PE Index: According to Tuduoduo data, on October 22nd, the domestic HDPE spot index was 7473, up 6%; the LDPE film spot index was 9153, down 10%; and the LLDPE spot index was 7098, up 4%.
Shenhua Auction Statistics: Today's linear auction volume was 500 tons, and today's trading volume was 500 tons. Today's high-pressure auction volume was 200 tons, and today's trading volume was 120 tons. Today's low-pressure auction volume is 0 tons, and today's transaction volume is 0 tons.
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