Polyethylene Weekly Report: The spot market was weak overall during the week, and low-end quotations frequently emerged(January 2, 2025)
Chapter 1: Review of the polyethylene market this week
1. Analysis of the trend of the domestic polyethylene market
The domestic polyethylene market was weak overall this week. Except for the partial increase in the price of linear varieties, the overall spot price fell compared with the same period last week. As of Thursday this week, the domestic linear price was 8800-9350 yuan/ton; the high-pressure price was 10040-10440 yuan/ton; the low-pressure film price was 7520-8400 yuan/ton; the low-pressure wire drawing price was 8030-9000 yuan/ton.
The factors affecting the market trend this week are: 1. On the cost side, international oil prices showed an upward trend during the week. The crude oil market was boosted by factors such as improved demand in Asia and the severe cold weather in the United States that boosted crude oil demand. The oil price gradually broke through US$71/barrel, and the cost support for the PE market was strengthened. 2. On the supply side, the spot resources in the market are limited during the week, and most suppliers are mainly pre-selling. Among them, the supply of linear spot goods is obviously tight, and the market is mostly selling at a high price. However, the new production and release of the market have put pressure on the supply structure in the market, which has a certain impact on the PE market price. 3. On the demand side, the downstream is mainly based on rigid demand, but due to the increasing cost pressure, its attitude towards entering the market is relatively cautious. Since rigid demand still exists, the downstream purchases according to its own situation when receiving goods.
2. Analysis of the trend of the polyethylene futures market
This week, the main plastic L2505 contract fluctuated upward as a whole, and the fluctuation range of the high and low points during the week was 131 points. Specifically: The L2505 contract opened at 8079 on December 30, and the highest point during the week appeared on January 02, with the highest point of 8206; the lowest point during the week appeared on December 30, with the lowest point of 8075. As of January 2, the settlement price was 8172. From the transaction status, the transaction was 20.7% long open and 25.6% short open, and the long closed at 19.4% and the short closed at 23.2%.
Chapter 2 Polyethylene Trend Forecast
In terms of raw materials, the protective atmosphere brought by OPEC+ production cuts in the crude oil market still exists, ensuring that oil prices are unlikely to fall sharply, and the expectation of improved demand in Asia provides favorable support, but the continued global demand pressure and the strong US dollar may suppress the upward momentum of oil prices. It is expected that international oil prices may have room for a small increase. It is also necessary to pay attention to the relevant impact of the US President's policies on international oil prices after he officially takes office. In terms of supply, the market may actively ship or store pre-sales to reduce inventory and thus reduce sales pressure. In the short term, PE devices are mostly repaired, the market supply is sufficient, and the supply side may operate under pressure due to the pressure of new production. On the demand side, although the terminal is expected to stock up before the festival, the profit level of most downstream products is low, the bargaining power of downstream enterprises is weak, and the demand trading market is expected to operate weakly. In addition, some small enterprises will take holidays in advance as the Spring Festival approaches, so the overall operation level of the downstream industry may continue to decline. Overall, it is expected that the polyethylene market may fluctuate and weaken in the short term.
