July 28 News Curve Comparison Chart
In July, polyethylene showed a pattern of initial increase followed by high-level fluctuations in the middle and late parts of the month. According to SpotCom data: The average price of LLDPE (7042) on July 1st was 7,308 CNY/ton, and the average price on July 28th was 8,198 CNY/ton, an increase of 12.18%. The average price of LDPE (2426H) on July 1st was 9,266 CNY/ton, and the average price on July 28th was 10,383 CNY/ton, an increase of 12.05%. The average price of HDPE (5000S) on July 1st was 9,837 CNY/ton, and the average price on July 28th was 10,450 CNY/ton, an increase of 6.23%.
The volatile U.S.-Iran situation continues to disrupt shipping in the Strait of Hormuz, causing international crude oil prices to fluctuate and strengthen, thereby providing strong cost support for polyethylene. However, oil price volatility remains highly uncertain, making it difficult to sustain a sustained upward trend in prices and thus limiting the upside potential of the market.
Supply shows a pattern of short-term tightness and long-term looseness. In early July, multiple plant maintenance activities reduced industry operations, while continuous destocking at ports supported the market. In mid-to-late July, maintenance units gradually resumed production, leading to an increase in subsequent supply. Over the long term, the continuous release of new production capacity will limit the upward potential.
July is traditionally the off-season for polyethylene demand in China, which has become the main factor suppressing market conditions. The demand for agricultural films is in a lull, and downstream sectors such as packaging and injection molding are operating at lower capacities due to high temperatures. Downstream products are not profitable, leading to a just-in-time procurement model, making it difficult for raw material price increases to be smoothly passed on.
In the short term, polyethylene is unlikely to see a one-sided sharp increase and will most likely experience a wide range of fluctuations at high levels. If crude oil does not see further significant increases, and without the drive of concentrated stocking orders, the upward space will be limited.
