Polyethylene (PE): Prices repeatedly surged
Domestic Petrochemical Inventory: Sinopec and PetroChina's polyolefin inventory totaled 610,000 tons, a decrease of 50,000 tons from yesterday.
PE Spot Market Analysis: Today, the domestic PE market saw a mixed trend of price increases and decreases. In North China, only high-density polyethylene (HDPE) grades saw a price decline, while linear, low-density film, and low-density fiber grades all saw price increases compared to yesterday, with overall price fluctuations ranging from 50-200 yuan/ton.
In East China, only linear PE grades saw a price increase of 50 yuan/ton, while HDPE, low-density film, and low-density fiber grades remained unchanged. In South China, linear, low-density film, and low-density fiber grades all saw price increases, while HDPE grades saw a price decrease, with overall price adjustments ranging from 50-100 yuan/ton. Domestic polyethylene producers generally maintained stable ex-factory prices, with only a few grades seeing slight increases of 50-100 yuan/ton, indicating relatively restrained price adjustments overall.
Despite some willingness to actively raise prices in the market, regional market prices showed a divergent trend, lacking a solid fundamental driving force for upward movement. Influenced by the overall economic environment, the actual trading atmosphere did not show a significant recovery. Most distributors could only flexibly adjust their prices according to market fluctuations and supply changes, with large-scale transactions primarily relying on individual negotiations between buyers and sellers.
Constrained by numerous uncertainties, the market was largely in a wait-and-see mode, with operators lacking the confidence to actively stock up or push prices higher. Even with some price increases, it was difficult to form an overall upward trend. The overall market movement was slow, with price changes being more scattered and lacking a unified and strong upward momentum.
PE Spot Market Forecast: In the futures market, the L2609 contract price quickly fell after opening in the night session, reaching an intraday low before stabilizing and steadily climbing upwards. The price continued to rise in the morning session, then retreated, stabilized, and rebounded again, fluctuating repeatedly.
In the afternoon session, the price rose again before gradually entering a period of high-level consolidation. Geopolitical developments are influencing trading sentiment across the polyethylene market. Industry players are closely monitoring the latest round of US-Iran talks, resulting in cautious and restrained operations.
Coupled with the industry entering its traditional off-season, downstream demand is limited to routine restocking, with large-scale bulk purchases failing to materialize, leaving demand lacking support. While raw material costs have provided some support compared to the previous period, and overall market supply has increased, the actual increase has not met market expectations.
Producers currently face little inventory turnover pressure and have no urgent need to clear stock, allowing intermediaries to cautiously test price increases. However, long-standing structural supply-demand imbalances remain, with various unexpected news events repeatedly disrupting the market, resulting in weak price stability. Currently, only low-priced, cost-effective products are favored by buyers, showing relatively strong sales, while the circulation of high-priced goods is significantly hampered.
The short-term polyethylene market is unlikely to form a unilateral trend. Constrained by persistently fluctuating geopolitical news and weak downstream demand, the market is likely to maintain a cautious, incremental testing pattern, generally oscillating within a range. Market transactions will continue to rely on flexible negotiation, making significant price fluctuations unlikely.
Mainstream PE Market Prices:
PE Futures Analysis: July 3rd, L2609 opening price: 6790, highest price: 6904, lowest price: 6767, open interest: 419984, settlement price: 6854, previous settlement: 6789, increase: 65, daily trading volume: 427172 lots, idle funds: 2.017 billion, outflow: 23.91 million.
Domestic PE Index: According to data from TuDuoDuo, on July 3rd, the domestic HDPE spot index was 7630, up 42; the LDPE film spot index was 8872, down 25; and the LLDPE spot index was 7378, up 50.
Shenhua Auction Statistics: Linear polyethylene auction volume and transaction volume were both 200 tons today. High-density polyethylene auction volume and transaction volume were both 0 tons today. Low-density polyethylene auction volume and transaction volume were both 0 tons today.
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