SunSirs: Positive Support, China PE Market Prices Increase Recently

According to the monitoring of the commodity market analysis system of SunSirs, the average price of LLDPE (7042) was 6,410 RMB/ton on January 2 and 6,625 RMB/ton on January 9, an increase of 3.35%. LDPE (2426H) had an average price of 8,400 RMB/ton on January 2nd and 8,933 RMB/ton on January 9th, an increase of 6.38%. HDPE (2426H) had an average price of 6,862 RMB/ton on January 2nd and 7,022 RMB/ton on January 9th, an increase of 2.33%.

Recently, the price of polyethylene has been continuously increasing. On the supply side, with increased maintenance and controllable inventory, some sources of goods are tight. Ningxia Baofeng HDPE plant and Maoming Petrochemical LDPE plant have entered maintenance, and the short-term supply pressure has slightly eased. On the demand side, the peak season for agricultural film has ended, and the production of greenhouse film in the north has basically stagnated, with orders continuing to decline; The orders for packaging film have slightly increased, only maintaining the pace of replenishing inventory for essential needs. Downstream factories are resistant to high priced raw materials, mostly for essential purchases, and are cautious when entering the market. Actual transactions are mainly based on low-priced sources. Cost aspect: Supported by the increase in raw material prices in the early stage, the polyethylene market is booming. Futures: The main contract for polyethylene fluctuated and climbed, with a significant increase at the close of January 7th compared to before the holiday. Futures remained high on January 8th, continuing to support the sentiment of the spot market. The mentality of the industry has significantly improved, and the prices of petrochemical enterprises and traders have not increased.

Prediction: Short term support from futures and tight supply of some goods will maintain a strong consolidation in the market. In the medium to long term, the off-season for agricultural film demand will continue, and downstream production will further decline as the Spring Festival approaches. Coupled with expectations of new capacity release, the upward space for polyethylene is limited.

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