PE Spot Futures Supply Demand Dynamics
Domestic Petrochemical Inventory: Sinopec and PetroChina's polyolefin inventory totaled 640,000 tons, a decrease of 25,000 tons from yesterday.
PE Spot Market Analysis: Today, the domestic PE market showed an overall upward trend. In North China, only the price of low-density film grade remained stable, while the prices of linear, high-density, and low-density fiber grades all increased, with price increases ranging from 20-80 yuan/ton.
In East China, the prices of linear and high-density grades rose slightly, fluctuating between 20-30 yuan/ton, while the prices of low-density film and low-density fiber grades remained stable. In South China, the prices of linear, high-density, low-density film, and low-density fiber grades remained unchanged from yesterday. The current PE market presents a pattern of "cost support and supply-demand interplay."
Producers generally maintained stable ex-factory prices, with only some companies flexibly adjusting prices based on their own production and sales schedules and inventory pressures, resulting in increases of 10-100 yuan/ton and decreases of 70-200 yuan/ton. There was no unified price adjustment direction within the industry. Benefiting from continued strengthening of cost support, most spot prices in the market rose accordingly.
However, due to inventory pressure, distributors prioritized selling at market prices, and overall supply pressure was not effectively relieved. The demand side became the key factor restricting market upward movement. Downstream enterprises maintained only rigid, on-demand purchasing, exhibiting a cautious purchasing mentality. Weak end-user demand further amplified the wait-and-see attitude in the industry.
PE Spot Price Forecast: In the futures market, the L2601 contract price fluctuated upward in the night session. Prices initially surged in the morning, then slightly retreated and maintained high-level fluctuations. In the afternoon session, prices continued to fluctuate within a high range. Currently, the domestic polyethylene market supply and demand pattern is characterized by "sufficient supply and weak demand recovery," and the supply-demand contradiction has not been effectively alleviated.
On the supply side, the number of operating plants in the industry remains high, and the spot market supply remains at an ample level. Coupled with the current trend of continuously declining market prices, the focus of trading is mostly on low-priced resources, and the overall destocking pace is relatively slow.
While there has been a structural improvement in demand, with downstream orders showing a temporary rebound driven by the Double Eleven shopping festival, the fundamental improvement in weak demand remains slow and has not changed the industry's supply-demand balance.
Downstream industry operating rates remain stable, but procurement is still primarily on a just-in-time basis. Factories are cautious in their purchasing decisions due to a wait-and-see attitude towards the market outlook, with insufficient willingness to continuously replenish inventory and no large-scale increases in purchases. Acceptance of high-priced goods is low.
In summary, although the Double Eleven peak season provided a short-term boost to demand, the effect was limited and lacked sustainability, while the ample supply situation has not undergone substantial adjustment, and cost support has not yet been effectively transmitted. Overall, the polyethylene market is expected to continue its weak and volatile trend in the short term.
Mainstream PE Market Prices:
PE Futures Analysis: On November 14th, L2601 opened at 6825, reached a high of 6886, a low of 6860, held 540,755 contracts, settled at 6860, compared to the previous settlement of 6791 (up 69), daily trading volume was 347,525 lots, outstanding funds were 2.594 billion, and net outflow was 182 million.
Domestic PE Indices: According to data from TuDuoDuo, on November 14th, the domestic HDPE spot index was 7406, unchanged; the LDPE film spot index was 8863, up 12; and the LLDPE spot index was 7030, up 37.
Shenhua Auction Statistics: Linear PE auctioned 800 tons today, with a transaction volume of 798 tons. High-density polyethylene auctioned 200 tons today, with a transaction volume of 100 tons. The auction volume for low-pressure gas today was 0 tons, and the transaction volume was 0 tons.
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