Under a Triple Game, Polyethylene Operates with a Weak and Fluctuating Trend

May 22 News Curve Comparison Chart

According to SpotCom data: The average price of LLDPE (7042) on May 15 was 8,441 CNY/ton, and the average price on May 22 was 8,386 CNY/ton, a decrease of 0.65%. The average price of LDPE (2426H) on May 15 was 11,300 CNY/ton, and the average price on May 22 was 11,116 CNY/ton, a decrease of 1.62%. The average price of HDPE (5000S) on May 15 was 10,320 CNY/ton, and the average price on May 22 was 10,237 CNY/ton, a decrease of 0.80%.

Supply side: The support from maintenance has weakened, and there is a general marginal easing. Although the losses from plant maintenance still provide some support this week, previously shut-down facilities are gradually restarting, and the industry's operating rate continues to rise from a low level. The pressure on the overall supply side is gradually becoming apparent. Social inventory as a whole is at a moderately high level, and there are early signs of inventory accumulation for some products. Combined with additional imports, the general trend of a loose market supply remains unchanged, putting continuous downward pressure on prices.

Demand side: The off-season characteristics are evident, with rigid demand procurement being the main focus. The traditional peak season for agricultural films has basically ended, and the operating rate at the end-user level continues to run at a low level, resulting in the disappearance of the core driver for polyethylene. Demand in other downstream sectors such as packaging, injection molding, and piping is also flat, with most orders being short-term essential needs. Downstream enterprises purchase as needed, leading to a quiet market with light trading.

Cost Perspective: High oil prices and strong bottom support. Crude oil prices remain volatile at high levels, repeatedly affected by geopolitical conflicts in the Middle East, providing robust bottom support to the market and limiting the room for significant price declines.

If there are no unexpected changes in crude oil or downstream demand, the price of polyethylene is likely to maintain its current weak and volatile pattern. The rebound will be limited by demand, and the decline will be restricted by cost support. Attention should be paid to the trends in crude oil, downstream transactions, and facility developments.