PE Spot Market Weakens Amid Soft
Domestic Petrochemical Inventory: Sinopec and PetroChina's polyolefin inventory totaled 740,000 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, the market prices for linear and low-density fiber grades remained stable, while high-density fiber grades saw a decrease compared to yesterday. Low-density film grades experienced mixed price movements, with an overall adjustment range of 30-150 yuan/ton.
In East China, only the price of low-density fiber grades remained unchanged from yesterday; the market prices for linear, high-density, and low-density film grades all declined, with a price reduction range of 50-150 yuan/ton. In South China, the market prices for linear, high-density, low-density film, and low-density fiber grades all decreased compared to yesterday, with a price reduction range of 50-150 yuan/ton.
Constrained by weak overall market sentiment, domestic PE producers are primarily characterized by stable prices with minor adjustments at the factory gate. Price adjustments vary significantly across product categories, with some grades seeing reductions ranging from 20 to 500 yuan/ton. Downstream enterprises are only making quantitative purchases based on their daily production needs, lacking the willingness to replenish inventory in large quantities, thus suppressing the upward potential of spot prices from the demand side.
Affected by this environment, traders in the distribution chain are flexibly adjusting their pricing in response to market fluctuations and supply and demand changes. To revitalize their own inventory and promote the circulation of goods, most merchants are choosing to offer discounts of varying degrees, leading to a gradual downward shift in the market price center.
Currently, the industry as a whole is in a wait-and-see mode, with traders adopting a conservative pricing strategy. Amidst the continued transmission of pessimistic market sentiment, fixed-price transactions are rare in the spot market, with the vast majority of orders requiring repeated negotiations between suppliers and buyers.
PE Spot Market Trend Forecast: In the futures market, the L2609 contract price steadily rose overnight, supported by lower levels. Prices surged in the morning session, then plunged in the afternoon before rebounding slightly at the close.
Currently, the polyethylene spot market is generally weak, with weakening support levels and a downward pressure on the price trend. Although geopolitical uncertainties persist, the transmission effect of related positive factors is gradually diminishing. The cost support effect of crude oil on chemical products continues to weaken, and the industry's fundamentals have lost a strong upward driving force.
Adding to this, the accumulation of inventory over the weekend creates pressure to sell, and the lack of new positive factors in the market results in a generally sluggish trading atmosphere. To accelerate inventory turnover and alleviate sales pressure, most merchants are actively offering discounts to move goods. Low-priced goods have some liquidity, while high-priced goods are relatively weak in trading.
Entering the beginning of the month, petrochemical spot resources are steadily entering the market, further expanding the overall supply and increasing supply-side pressure. Demand remains weak, with downstream end-users adopting a cautious and conservative purchasing attitude, showing little willingness to actively replenish inventory, and new orders following suit slowly, making it difficult to effectively boost spot prices. Looking at the current market situation, weak cost support, gradually easing supply, and continued weakening demand are all working together to exert downward pressure. In the short term, the polyethylene market is likely to continue its weak and volatile trend, with overall downward pressure and insufficient momentum for a rebound.
Mainstream PE Market Prices:
PE Futures Analysis: June 5th, L2609 opening price: 7841, highest price: 7965, lowest price: 7828, open interest: 379677, settlement price: 7908, previous settlement: 7926, down: 18, daily trading volume: 403799 lots, idle funds: 2.104 billion, capital inflow: 64.23 million.
PE Futures Analysis: June 5th, L2609 opening price: 7841, highest price: 7965, lowest price: 7828, open interest: 379677, settlement price: 7908, previous settlement: 7926, down: 18, daily trading volume: 403799 lots, idle funds: 2.104 billion, capital inflow: 64.23 million.
Domestic PE Index: According to data from TuDuoDuo, on June 5th, the domestic HDPE spot index was 8789, down 62; the LDPE film spot index was 9943, down 92; and the LLDPE spot index was 8386, down 16.
Shenhua Auction Statistics: Linear polyethylene auction volume today: 309 tons; transaction volume today: 309 tons. High-density polyethylene auction volume today: 60 tons; transaction volume today: 34 tons. Low-density polyethylene auction volume today: 300 tons; transaction volume today: 110 tons.
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