Polyethylene prices reduced, short-term weak operation

January 21st, News

According to the commodity market analysis system, the average price of LLDPE (7042) on January 16 was 6,840 CNY/ton, and on January 20 it was 6,725 CNY/ton, a decrease of 1.68%. The average price of LDPE (2426H) on January 16 was 9,183 CNY/ton, and on January 20 it was 9,150 CNY/ton, a decrease of 0.36%. The average price of HDPE (5000S) on January 16 was 7,262 CNY/ton, and on January 20 it was 7,237 CNY/ton, a decrease of 0.34%.

After several weeks of consecutive increases, the market experienced a technical correction, and the weakening futures prices also dragged down the spot market for polyethylene in China.

Weakened cost support: Recently, international oil prices have fallen due to the easing of geopolitical tensions in Iran and other regions, thereby weakening the cost support for polyethylene.

On the supply side, maintenance has decreased; previously shut-down facilities are gradually restarting; there is an expectation of increased imports, with some institutions estimating that the volume of imported goods arriving in mid to late January will increase compared to the previous month; supply may increase, and the supply pressure remains.

Weak demand: Downstream product manufacturers are facing insufficient orders, and their willingness to purchase has weakened—particularly in the agricultural film sector, where demand has entered the off-season, leading to sluggish market activity. Packaging films: Driven primarily by essential needs, the market is resistant to high prices.

With the commissioning of new facilities and expectations of increased imports, supply-side pressures remain; cost support is weak; downstream demand is weak, and as the Spring Festival approaches, downstream industries are gradually shutting down, reducing their willingness to stock up and focusing instead on depleting existing inventories. As a result, polyethylene prices are expected to remain weak.