Polyethylene Weekly Report: Spot market continued to diverge between varieties during the week, and some sources of supply were still tight(December 19, 2024)
Chapter 1: Review of polyethylene market this week
1. Analysis of domestic polyethylene market trends
This week, the domestic polyethylene market as a whole showed a trend of different price adjustment directions between varieties. Compared with the same period last week, the comprehensive spot price rose and fell. As of Thursday this week, the domestic linear price was 8750-9150 yuan/ton; the high-pressure price was 10220-10620 yuan/ton; the low-pressure film price was 7710-8450 yuan/ton; and the low-pressure wire drawing price was 8180-9000 yuan/ton.
The factors affecting the market trend this week are: 1. On the cost side, the international oil price fell first and then rose during the week, with a small fluctuation range. The decline in oil prices in the early part of the week was mainly affected by factors such as the European and American manufacturing data being lower than expected and the possible easing of geopolitical situations. The rebound in oil prices in the late part of the week was mainly affected by factors such as the continuous decline in US crude oil inventories for four consecutive weeks and the Federal Reserve's expected interest rate cut. 2. On the supply side, the spot supply of LLDPE is still relatively tight during the week, which supports the upward shift of its market price center of gravity to a certain extent. Traders are mainly active in shipping, and the supply of other varieties is sufficient. Traders adjust prices appropriately according to the inventory, and some quotations fall slightly. 3. On the demand side, some downstream industries have strengthened their efforts to replenish inventory in the early part of the week, and the market sentiment has been slightly boosted. In the latter part of the week, as the quotations of some sources rise, downstream industries have resistance to high-priced sources and mostly maintain a cautious wait-and-see mentality.
2. Analysis of the trend of polyethylene in the US dollar market
Chapter 2 Polyethylene trend forecast
In terms of raw materials, in the short term, multiple factors affect the crude oil market, including the OPEC+ production cut atmosphere continuing to the first quarter of next year, the Asian economy showing signs of improvement, and the European and American Christmas holidays approaching, which may increase the demand for crude oil. There are also negative factors such as the crude oil market's concerns about the outlook for global demand, the instability of the geopolitical situation may be weakened, and the US dollar index remains high. On the supply side, it is expected that it will take time for the new production to increase. In the short term, except for the continued increase in LDPE supply, there is little pressure on the supply of HDPE and LLDPE in the market, which may provide some support to its market price. However, given the poor shipment of high-priced supplies, it may limit its room for growth to a certain extent. On the demand side, it is expected that the overall terminal demand will be weak, and the overall new orders from the downstream may be small, and the original orders will be maintained as the main purchase. There may be some resistance to high-priced supplies. Although some downstream industries may have improved due to the holiday effect, the overall support of the demand side to the PE market is limited. On the whole, it is expected that the polyethylene market may fluctuate in the short term.
