SunSirs: The Supply-demand Ccontradiction Is Difficult to Alleviate, China PE Market Remain Weak

According to the monitoring of the commodity market analysis system of SunSirs, the average price of LLDPE (7042) was 6905 RMB/ton on December 1st, and 6,375 RMB/ton on December 26th, a decrease of 7.68%. LDPE (2426H) had an average price of 9,000 RMB/ton on December 1st and 8,466 RMB/ton on December 26th, a decrease of 5.93%. The average price of HDPE (2426H) on December 1st was 7,387 RMB/ton, and on December 26th it was 6,800 RMB/ton, a decrease of 7.95%.

PE market remained weak and difficult to change in December, with the price center continuously shifting downwards. On the supply side, new production capacity continues to be released, and new facilities such as Guangxi Petrochemical have been put into operation to release production; Partial devices have completed maintenance and restarted, resulting in an increase in supply pressure. On the demand side, the demand side has entered the traditional off-season, and the demand for greenhouse film is gradually coming to an end. The demand for plastic film remains sluggish, the demand for packaging film is flat, the operating rate of the pipe industry is declining, downstream demand is weak, and the growth of new orders is sluggish. The market mentality is bearish, and as the end of the month approaches, manufacturers and traders are more willing to ship, mainly focusing on active pre-sales and maintaining a low inventory mentality, and generally offering discounts to accelerate inventory reduction. Insufficient cost support, although crude oil prices rebounded at the end of the month due to geopolitical uncertainty, the cost side has limited boosting effect on PE. Due to weak supply and demand, the contradiction between supply and demand is difficult to alleviate, and it is expected that PE will mainly operate weakly.

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