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SunSirs: PE Spot Market Decreases (March. 25)
March 25 2020 10:31:35SunSirs(Daisy)

SunSirs: PE Spot Market Decreases (March. 25)

The overall trend of the domestic PE market is showing different degrees of decline, the overall market turnover atmosphere is not good. By March 24, the average ex-factory price of LLDPE 7042 in east China was 6,600 RMB/ton, down 0.5% from the previous day. The average ex-factory price of LDPE 2426H in east China is about 7562.5 RMB/ton, down 0.33% compared with the previous day. The average ex-factory price of HDPE 5000S in east China is 7000 RMB /ton, down 1.87% compared with the previous day. The decrease range is between 50 RMB/ton -200 RMB/ton.

On March 24, the PE market as a whole still fell, with the majority of petrochemical down 50-200 RMB/ton or so. The market cost support strength weakened. On morning (On March24), oil fell after a small rebound, weak linear futures felling. There is a certain degree of pressure on the market mentality, and market is full of pessimistic merchants. There is an overall decline in the market. As for downstream side, there was less inquires flowing into the market. In addition to some factories on demand, people become more cautious wait and see. The current market atmosphere is weak.

Future: The futures market continued to fall on March 24, which to some extent suppress the mentality of traders. Polyethylene futures L2005 opening price 6330 RMB/ton, the highest price 6330 RMB/ton, the lowest price 6065 RMB/ton, the closing price 6270 RMB/ton, before the settlement price 6250 RMB/ton, the settlement price 6195 RMB/ton, down 65, 1.04%, volume 310925, holdings 168342, daily increase position -16822 (Quotation unit: yuan/ton). 

Data: As of February 27, the total output of domestic polyethylene enterprises was 1.41 million tons, 252,300 tons less than that of January. The output of HDPE is 578,900 tons, LDPE 206,800 tons and LLDPE 624,300 tons.

Market Forecast: Early international crude oil brings some relief to the market after the rebound. At present, petrochemical inventories have fallen, and supply pressure has eased, but linear futures continue to drop, depressing downstream enthusiasm into the market. 

In petrochemical sector, most of businessman/woman has reduced their factory price. Market cost support has been weakened, and the downstream into the market enthusiasm is not high. Factory maintains the juts-to-need procurement strategy and they are mainly waiting and seeing. Therefore, it is expected that market will remain weak in the short term. 

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