LDPE Prices Started to Rebound in Late Q1, 2017

All of the LLDPE, LDPE and HDPE offers declined to some extent in February 2017. The monthly average price of LDPE was RMB 11,341/mt in February, down by 5.9% M-O-M. Traders began to guess when the PE prices can rebound?

It can be seen from the chart above that the Chinese LDPE prices were largely stable in H1 of March, and then inched up in H2 March. By the end of March, the LDPE prices were in the range of RMB 10,500-11,300/mt, rising by RMB 350/mt from the middle of March. Petrochemical companies adjusted the PE ex-works prices up, supporting the PE market. Additionally, the short supply of LDPE sources also pulled the LDPE prices up.

It can be seen from the chart above that the proportion of LDPE production in total PE production slumped from March 18, 2017. The 60kt/a old LDPE unit at Sinopec Beijing Yanshan Company, the 300kt/a LDPE unit at Shenhua Yulin Energy, and the 140kt/a LDPE unit at Sinopec Qilu Company were entering into the state of shutdown at the same time. The operating rates at LDPE units declined to the recent lowest point on March 20. Although the 3# old LDPE unit at Sinopec Beijing Yanshan Company has been restarted, the 200kt/a new LDPE unit at PetroChina Daqing Petrochemical was newly closed for maintenance. The intensive turnarounds of LDPE units helped the LDPE prices rose slightly in recently. More PE units are planned to be overhauled in later period, such as the PE units at Sinopec Shanghai Petrochemical and Shenhua Xinjiang Energy. The LDPE market supply is expected to decrease further. SCI holds that the LDPE prices will continue rising slightly later.