Polyethylene Supply-Side Pressure Remains Unabated, Short-Term Market Maintains Weakness

February 28 news

According to the commodity market analysis system, the average price of LLDPE (7042) on February 24 was 6,708 CNY/ton, and on February 27 it was 6,605 CNY/ton, a decrease of 1.54%. The average price of LDPE (2426H) on February 24 was 8,650 CNY/ton, and on February 27 it was 8,683 CNY/ton, an increase of 0.39%. The average price of HDPE (5000S) on February 24 was 7,345 CNY/ton, and on February 27 it was 7,312 CNY/ton, a decrease of 0.44%.

This cycle, polyethylene as a whole showed a trend of first rising then falling, with a fluctuating downward trend. On the first day after the holiday, prices rose, mainly supported by crude oil, and there was an emotional rebound after the holiday. Afterwards, prices fell back, lacking the strength to follow the increase.

High inventory levels on the supply side: During the Spring Festival, petrochemical enterprises experienced inventory accumulation, putting significant pressure on the supply side. In terms of maintenance activities: There are no new large-scale maintenance shutdowns; instead, previously idled units continue to remain offline. Meanwhile, several units that underwent earlier maintenance have resumed operations, further boosting supply.

The demand side is experiencing a slow resumption of work: downstream sectors such as agricultural film, packaging, and pipes have yet to fully resume operations. The market is mainly driven by transactions for essential needs, and traders as well as downstream companies are adopting a cautious wait-and-see approach.

Costs and the Macro Picture: Crude oil prices first rose and then fell, weakening cost support. Macro sentiment remains cautious, with no strong policy stimulus in sight.

Inventory and demand pressures are both present, and in the short term, it is expected that polyethylene will mainly show a weak and volatile trend in China.