August Polyethylene Prices Show Mixed Trends

August 29 update

According to the commodity market analysis system, the average price of LLDPE (7042) on August 1st was 7,453 CNY/ton, and on August 29th, it was 7,445 CNY/ton, a decrease of 0.11%. The average price of LDPE (2426H) on August 1st was 9,516 CNY/ton, and on August 29th, it was 9,650 CNY/ton, an increase of 1.40%. The average price of HDPE (2426H) on August 1st was 7,975 CNY/ton, and on August 29th, it was 7,982 CNY/ton, an increase of 0.09%.

In August, the polyethylene market showed a mixed trend, with high-pressure products performing relatively strong, while linear and low-pressure products mainly showed a fluctuating consolidation trend, with little change. On the supply side, the strong performance of high-pressure products was mainly due to some plant maintenance, leading to tight supply, and thus, merchants' quotations were relatively high. As the end of the month approaches, the spot resources of polyethylene will decrease, and pre-sales will increase. On the demand side, the transition from the off-season to the peak season has led to some improvement in demand, with an increase in the operating rate of the agricultural film industry. However, after the market rebound, transactions have been cautious, limiting the upward space for prices. In terms of cost, recent high international oil prices have provided some bottom support for polyethylene. The Chinese government is about to launch a comprehensive rectification of the petrochemical and refining industries, which is beneficial for the polyethylene market from a policy perspective.

Short-term supply pressures have eased somewhat; September traditionally marks the peak season for polyethylene, with demand expected to improve. However, downstream companies are currently adopting a cautious approach, mostly procuring materials only as needed. Meanwhile, supportive Chinese policies are likely to keep the market trending moderately stronger.