SunSirs: China PE Prices Surge and Retreat in April Amidst Weak Demand

In April, the PE market generally exhibited a volatile and bearish pattern characterized by an initial surge followed by a retreat, with a weak recovery observed at month-end. According to data from SunSirs' "Spot Connect" service: The average price of LLDPE (7042) stood at 8,716 RMB/ton on April 1st and 8,425 RMB/ton on April 29th—a decline of 3.35%. The average price of LDPE (2426H) was 11,483 RMB/ton on April 1st and 11,350 RMB/ton on April 29th—a decline of 1.16%. The average price of HDPE (5000S) was 10,212 RMB/ton on April 1st and 10,082 RMB/ton on April 29th—a decline of 1.27%.

Supply Side: Tight initially, then easing; pressure gradually dissipated. Early April: Some production units underwent maintenance or reduced operating loads; social inventories remained low, and traders demonstrated a strong willingness to hold up prices, resulting in a temporary tightness in supply. Mid-to-Late April: Units previously under maintenance resumed production en masse, and new production capacity came online; coupled with an increase in arriving import shipments, market supply pressure rose significantly, exerting sustained downward pressure on prices. Month-End: Some production units entered maintenance phases once again; additionally, earlier low prices dampened the production enthusiasm of certain enterprises. Consequently, supply pressure eased slightly, providing support for a modest rebound in prices.

Demand Side: Generally weak. Downstream sectors—such as plastic weaving, agricultural films, and packaging—saw sluggish follow-through on orders. Enterprise operating rates remained at low levels, and procurement was primarily conducted on a "just-in-time" basis to meet immediate needs, lacking the impetus for large-scale stockpiling. Although low prices at month-end stimulated some restocking to meet essential needs, this failed to generate a sustained increase in demand; overall, demand remained insufficient to provide effective upward momentum for prices.

Cost Side: Early April: International crude oil prices trended upward amidst volatility, providing strong cost support to the market and helping to drive prices higher. Mid-to-Late April: Crude oil prices underwent a correction influenced by macroeconomic concerns and inventory data. This resulted in an easing of cost-side support which, combined with the weak supply-demand fundamentals, accelerated the decline in PE prices. Month-end: Crude oil staged a modest rebound, and cost-side fundamentals showed signs of marginal recovery, driving a low-level correction in PE prices.

Short-term: On the supply side, expectations of production restarts persist; on the demand side, there is currently no significant incremental growth. With crude oil fluctuations remaining the primary variable influencing costs, prices are highly likely to maintain a volatile, downward-biased trend.

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