SunSirs: China Polyethylene Prices Decline; Short-Term Market Expected to Fluctuate with a Downward Bias

According to data from SunSirs' "Spot Connect" service: On April 9, the average price of LLDPE (7042) was 8,916 RMB/ton; by April 16, the average price stood at 8,541 RMB/ton—a decline of 4.21%. The average price of LDPE (2426H) was 11,933 RMB/ton on April 9, falling to 11,650 RMB/ton on April 16—a drop of 2.37%. Similarly, the average price of HDPE (5000S) was 10,562 RMB/ton on April 9, dropping to 10,400 RMB/ton on April 16—a decline of 1.54%.

International crude oil prices have been on a continuous downward trend recently, resulting in insufficient cost support for PE production and further intensifying bearish sentiment within the market. Among the various grades, LLDPE exhibits the highest sensitivity to crude oil price fluctuations; consequently, the weakening of cost-side fundamentals has had the most significant impact on this grade, resulting in the most pronounced price decline.

On the supply side, the overall market remains relatively tight. The domestic industry is currently in the peak period for annual spring maintenance shutdowns, leading to a decline in both capacity utilization rates and overall production output. Regarding imports, arrivals have been insufficient due to geopolitical disruptions in the Middle East. Consequently, inventory levels are exhibiting a divergent trend: stocks are accumulating at the upstream production level, while social inventories (held by distributors and end-users) are being drawn down.

On the demand side, the market is generally characterized by the typical weakness associated with the off-season. Operating rates among downstream product manufacturers remain at low levels. Demand for agricultural films continues to recede as the spring plowing season draws to a close, while new orders for packaging films, pipes, and other product categories remain insufficient. Constrained by high raw material costs, downstream enterprises have seen their profit margins squeezed; consequently, they have adopted a cautious procurement stance. Purchasing activity is currently focused primarily on small-volume orders to meet immediate, rigid demand, with no signs of concentrated inventory replenishment—thereby providing only limited supportive momentum to the broader market.

In the short term, the polyethylene market is expected to maintain a fluctuating trajectory with a downward bias. While factors such as spring maintenance shutdowns on the supply side and disruptions to imports offer some degree of market support, these are counterbalanced by weak off-season demand, inventory accumulation among upstream producers, and the recent weakness in crude oil prices—which has eroded cost-side support. Amidst this interplay between bullish and bearish forces, the market is unlikely to experience any distinct directional breakout in the immediate future.

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