Polyethylene Rises First, Then Falls—High-Range Volatility

April 10 News: Curve Comparison Chart

Recently, the polyethylene market in China has been experiencing a high-level fluctuation, initially strong but then weakening. According to monitoring: The average price of LLDPE (7042) on April 6th was 8,880 CNY/ton, and on April 10th it was 8,848 CNY/ton, a decrease of 0.36%. The average price of LDPE (2426H) on April 6th was 11,650 CNY/ton, and on April 10th it was 11,883 CNY/ton, an increase of 2.00%. The average price of HDPE (5000S) on April 6th was 10,262 CNY/ton, and on April 10th it was 10,487 CNY/ton, an increase of 2.19%.

Strong cost support: Geopolitical conflicts in the Middle East continue to escalate, driving international crude oil prices to remain at high levels. Profit margins for PE production from petroleum feedstock continue to erode, compelling Chinese petrochemical companies to focus on reducing capacity utilization and conducting spring maintenance. This has led to strong expectations of supply contraction, boosting bullish market sentiment.

Supply-side structural contraction: no new commissioning, concentrated spring maintenance, and declining production. Reduced supply from the Middle East and low arrivals at ports. As of early April, polyethylene social inventory in China was 623,200 tons, a slight increase from the previous period, with high inventory levels suppressing price increases.

The demand side remains weak: The peak season for agricultural films is coming to an end, and downstream orders for packaging, injection molding, pipes, and other products are generally lackluster. Market participants are strongly resistant to high prices, shifting their purchasing behavior toward “just-in-time procurement driven by immediate needs,” resulting in sluggish transactions at elevated price levels. LLDPE, primarily used in agricultural films, is most directly affected by the waning peak season for agricultural films, making it the segment with the most pronounced negative impact on demand. Consequently, after reaching a temporary high, its price has experienced the largest pullback.

Polyethylene is expected to fluctuate at a high level, with bullish and bearish forces locked in a tug-of-war. Both cost support and demand drag coexist, making the short-term outlook relatively strong but warranting caution against potential pullbacks.