PE Spot Rises, Futures Swing Short-Term

Polyethylene PE: PE spot prices are rising strongly, while futures prices are rising and falling! Short-term fluctuations are strong under the game of supply and demand

Domestic petrochemical inventory: The inventory of polyolefins from two oils is 765,000 tons, down 25,000 tons from yesterday.

PE spot market analysis: Today, the overall price increase in the domestic PE market is prominent. The prices of linear and high-pressure categories generally rose in North China, East China, and South China, with a considerable increase. The prices of low-pressure film materials remained stable, and the prices of low-pressure wire drawing rose and fell.

The Ministry of Industry and Information Technology has promoted supply-side optimization reforms in the petrochemical industry, and the National Energy Administration has carried out coal mine production inspections in key coal-producing provinces (regions). Affected by these macro policies, the polyethylene market has risen significantly, and the ex-factory price adjustments of PE manufacturers are different. A few companies have raised prices to seize the opportunity of market upswing.

Some companies may have sufficient inventory in the early stage and do not need to adjust the sales rhythm through price adjustments. They choose to wait and see further changes in the market and maintain prices. Some companies are under great inventory pressure in an environment where the overall market is up but competition still exists.

They use low-price strategies to grab more market shares by giving up profits. Downstream factories are in the off-season and there is no obvious increase in purchasing demand, but the optimistic expectations brought by the policy support have steadily boosted industry confidence, and the overall market atmosphere is positive and strong.

PE spot trend forecast: In terms of futures, when the night session of the L2509 contract started, the futures price was at a relatively high level, fluctuating frequently within a certain range, showing a volatile trend. After the opening of the morning session, although the price rose slightly, it hit the relatively high level of the day and then was blocked.

The price fell rapidly. In the afternoon session, the price fell sharply and then entered a relatively stable volatile range. In terms of supply, some PE production units are in a long-term shutdown state, and the time for resuming production is not yet clear. The effective supply contraction forms a hard constraint. Although the macro-strong sentiment continues to ferment, the market's expectations for cost support and favorable policies are rising, but the downstream is in the off-season of demand. 

Factories are mainly consuming inventory and maintaining rigid production. Buying is generally cautious, and only purchases on demand at low prices, which is difficult to form large-scale centralized replenishment behavior. On the whole, it is expected that in the short term, although the polyethylene market price may rise to a certain extent, the increase will be relatively limited. The market is likely to maintain a range of fluctuations in the contradiction between supply contraction and weak demand.

Mainstream PE market quotes:

PE futures analysis: July 23, L2509 opening price: 7370, highest price: 7371, lowest price: 7261, position: 388381, settlement price: 7320, yesterday's settlement: 7306, increase: 14, daily trading volume: 313961 lots, deposited funds: 1.981 billion, capital outflow: 51.49 million.

Domestic PE index: According to Tuduoduo data, on July 23, the domestic HDPE spot index was 7643, up 8; the LDPE film spot index was 9530, up 80; the LLDPE spot index was 7347, up 40.

Shenhua auction statistics: Linear today's auction volume is 466 tons, and today's trading volume is 366 tons.

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