Recent Upside for Polyethylene in China is Limited

August 27 update

According to the commodity market analysis system, the average price of LLDPE (7042) on August 20 was 7,433 CNY/ton, and on August 27 it was 7,451 CNY/ton, an increase of 0.25%. The average price of LDPE (2426H) on August 20 was 9,616 CNY/ton, and on August 27 it was 9,633 CNY/ton, an increase of 0.17%. The average price of HDPE (2426H) on August 20 was 8,000 CNY/ton, and on August 27 it remained at 8,000 CNY/ton, with no change in the quoted price.

Recently, the polyethylene market has mainly been operating within a narrow range, with limited room for price increases. On the supply side, as the end of the month approaches, the availability of spot resources will decrease, and pre-sales will increase. On the demand side, the market is transitioning from the off-season to the peak season, with some improvement in demand. The operating rate of the agricultural film industry has risen, but transactions have been cautious following the market rebound, limiting the upward potential of prices. In terms of costs, on August 26, international crude oil futures closed lower, weakening the support from the cost side. Policy measures provide some support for the bottom of the polyethylene market in China.

Short-term supply pressures have eased; September is set to enter the peak demand season; supportive Chinese policies remain in place; and with cost support weakening, polyethylene prices are expected to fluctuate predominantly on the stronger side.