Polyethylene Rises First, Then Falls, Yet Remains at a High Level

March 26th, News

Polyethylene showed a consistent trend of first surging and then retreating this week, with overall prices still remaining high. After the price increase, there was a pullback, indicating that short-term speculative sentiment is gradually being released, and the market is returning to its fundamentals. According to monitoring: The average price of LLDPE (7042) on March 20th in China was 8,625 CNY/ton, and on March 26th it was 8,816 CNY/ton, an increase of 2.22%. The average price of LDPE (2426H) on March 20th in China was 10,750 CNY/ton, and on March 26th it was 11,116 CNY/ton, an increase of 3.41%. The average price of HDPE (5000S) on March 20th in China was 9,045 CNY/ton, and on March 26th it was 9,712 CNY/ton, an increase of 7.38%.

Cost-side support: The situation in the Middle East remains highly uncertain, and international oil prices continue to experience sharp fluctuations at high levels, which are passing through to polyethylene production costs and supporting spot quotation levels.

Supply-side structural contraction intensifies: plant maintenance is concentrated, and China's spring inspections start in March, with multiple PE units shutting down for maintenance. Imports are obstructed; Iran is a significant source of PE imports for China, and the disruption in the Strait of Hormuz is expected to reduce imports, widening the spot supply gap in China. In terms of exports, PE exports from China surged by 61.5% year-on-year in January-February 2026, further exacerbating the tightness of spot supplies in China. Some petrochemical companies have also voluntarily reduced their production loads due to raw material issues, further tightening the supply.

Demand is rebounding: Overall downstream operating rates have risen month-on-month, entering the recovery phase typical of the traditional “Golden March” peak season; however, the rebound remains relatively weak. Following the sharp price surge, downstream resistance to high prices has significantly intensified, new orders are sluggish, and procurement is mainly limited to small, immediate-need orders placed as needed.

Futures end: The main LLDPE contract saw a single-day price increase of 9% on March 23, reaching a high of 9,147 CNY per ton, further amplifying the momentum in the physical market.

If geopolitical conflicts ease and facilities gradually resume production, polyethylene prices will continue to return to their fundamental levels; if the conflicts persist, expectations of supply contraction will continue to support high price volatility.