SunSirs: Supply Shortage, China PE Spot Market Rise

Near the end of August, the three major PE varieties in China spot market rose. The prices of LDPE film materials in East China increased sharply due to the shortage of goods and tight supply, while LLDPE and HDPE in East China followed. Among them, high-pressure LDPE rose nearly 3% in the week. The overall trading volume of the market is better than that of the downstream market.

According to the data monitoring of SunSirs, the average ex-factory price of LLDPE (7042) in East China was 7,200.00 RMB/ ton on August 24 and 7,400.00 RMB/ ton on August 31, with an increase of 2.78% and 3.26% compared with August 1. The average ex-factory price of LDPE (2426h) in East China was 9,225.00 RMB/ ton on August 24 and 9,500.00 RMB/ ton on August 31, with an increase of 2.98% and 9.99% over August 1. The average ex-factory price of HDPE (5000S) in East China was 8,300.00 RMB/ ton on August 24 and 8,400.00 RMB/ ton on August 31, with an increase of 1.20% and 3.70% compared with August 1.

At the end of August, PE spot market (East China) continued to rise, ranging from 100-450 RMB/ ton. Due to the shortage of high-pressure film in East China, the price has increased greatly. And the rise of international crude oil has brought a certain boost to the market. During the period, the petrochemical inventory was at a relatively low level, with little pressure and obvious price support mentality, and the ex-factory price was increased significantly. The current market supply pressure is not big, linear growth is also more obvious.

Import and export: in July 2020, the import volume of PE is about 1.6664 million tons. Compared with that in June, it decreased by 163,300 tons, with a decrease rate of 8.92. Compared with the same period last year, it increased by 274,400 tons, or 19.71%. Among them, the imports of LDPE, HDPE and LLDPE were 286,000 tons, 824,200 tons and 556,200 tons respectively. In July 2020, the total export volume of PE was 20,100 tons. Among them, the export volume of LDPE was 7,000 tons, that of HDPE was 9,600 tons, and that of LLDPE was 0.35 tons.

The rebound of raw material ethylene has a certain support for PE market. In August, the ethylene market fell until a slight rebound at the end of the month.

In the short term, the number of maintenance devices in the PE market is gradually reduced, and the market supply is expected to increase. However, there is no obvious pressure on the enterprise inventory and the port inventory is at a low level, which brings support to the market. Even plastic futures firm, cost support is still in. In September, the operating rate of agricultural film increased, the demand for greenhouse film increased slowly, and the downstream demand formed support. China PE market is expected to rise slightly in the short term.

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