Both Supply and Demand Weak, Polyethylene Operates on the Weaker Side

February 5th, according to news from China,

According to the commodity market analysis system, the average price of LLDPE (7042) on February 2 was 7,025 CNY/ton, and on February 5 it was 6,918 CNY/ton, a decrease of 1.52%. The average price of LDPE (2426H) on February 2 was 9,066 CNY/ton, and on February 5 it was 8,916 CNY/ton, a decrease of 1.65%. The average price of HDPE (5000S) on February 2 was 7,450 CNY/ton, and on February 5 it was 7,392 CNY/ton, a decrease of 0.77%.

Recently, various types of polyethylene in China have shown an overall trend of fluctuation with a weaker bias.

Cost side: On February 3 and 4, crude oil prices rebounded somewhat, but failed to alter the market’s expectation of weakening costs, leaving cost-side support limited.

On the supply side: With the restart of units at Sinochem Quanzhou, Maoming Petrochemical, and others, coupled with the commissioning of LDPE/EVA units at Yulong Petrochemical, market supply has further increased. There are expectations of a rise in supply, which is putting downward pressure on prices.

On the demand side: As the Spring Festival holiday approaches, downstream factories are gradually shutting down, and terminal demand is entering the seasonal low season. Trading activity is sluggish, making it difficult to sustain continued price increases.

In the short term, the polyethylene market in China will continue to be dominated by a pattern of weak supply and demand, with prices likely to maintain a weak and volatile trend.