LLDPE (7042) had an average price of 8506 yuan/ton on August 28th and 9125 yuan/ton on September 3rd, an increase of 7.27%. LDPE (2426H) had an average price of 10766 yuan/ton on August 28th and 11733 yuan/ton on September 3rd, an increase of 8.98%. HDPE (5000S) had an average price of 10612 yuan/ton on August 28th and 10937 yuan/ton on September 3rd, an increase of 3.06%.
The centralized maintenance of petrochemical facilities in the early stage and the contraction of market circulation sources are the core drivers of this round of price increase, among which LDPE is most significantly affected by maintenance. In September, maintenance facilities will resume production one after another, and domestic sources of goods will gradually be released, while coal production facilities will maintain high operating rates. The expected increase in imported capacity from overseas in the later stage further constrains the upward space of the market. The current overall inventory is still at a low level, which provides some bottom support for prices.
Downstream production has moderately rebounded from the low level in August, and the demand for agricultural film and pipe materials has improved. However, most industries only maintain the demand for immediate use and procurement, and there is insufficient willingness to actively replenish inventory. There is a divergence between the expected and actual peak season of Jinjiu, with high inventory of downstream finished products and weak profits, resulting in strong resistance to high priced raw materials. The demand only achieves weak repair and only serves as a bottom support for the market, making it difficult to drive a significant unilateral increase in prices.
Oil based PE follows the high volatility of crude oil and ethylene, forming a bottom support for spot prices. However, crude oil lacks sustained upward momentum, making it difficult to further push up prices.
The short-term polyethylene market will shift from a rapid rise in the early stage to a high-level oscillation, with insufficient momentum for a large increase, but low inventory and cost support will provide bottom support for the price. With the resumption of production of maintenance equipment, supply pressure is gradually emerging, and downstream acceptance of high priced raw materials is limited, suppressing the upward space in the market.
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