Supply-demand contradiction difficult to alleviate, polyethylene remains weak

December 29 News

According to the commodity market analysis system, the average price of LLDPE (7042) on December 1st was 6,905 CNY/ton, and on December 26th it was 6,375 CNY/ton, a decrease of 7.68%. The average price of LDPE (2426H) on December 1st was 9,000 CNY/ton, and on December 26th it was 8,466 CNY/ton, a decrease of 5.93%. The average price of HDPE (2426H) on December 1st was 7,387 CNY/ton, and on December 26th it was 6,800 CNY/ton, a decrease of 7.95%.

In December, polyethylene continued to face weak market conditions with prices steadily declining. On the supply side, new production capacity kept being released, as newly commissioned facilities such as Guangxi Petrochemical ramp up output; meanwhile, some previously shut-down units have resumed operations, further increasing supply pressure. On the demand side, the market has entered the traditional off-season, with demand for greenhouse films gradually winding down, demand for mulch films remaining persistently sluggish, and demand for packaging films staying flat. The pipe industry’s operating rate has also declined, downstream demand remains weak, and new orders are struggling to grow. Market sentiment is predominantly bearish, and as the end of the month approaches, both producers and traders are more inclined to sell their inventories—adopting a proactive approach of pre-selling goods and maintaining low inventory levels. Generally, they’re offering discounts to expedite inventory reduction. From a cost perspective, support is insufficient; although crude oil prices rebounded toward the end of the month, geopolitical uncertainties limited the extent to which costs could boost polyethylene prices. With supply rising while demand remains weak, the supply-demand contradiction continues to be difficult to resolve. Therefore, polyethylene prices are expected to remain predominantly weak in the near term.