SunSirs: China Domestic PE Capacity Utilization Rate Shows Significant Month-over-Month Increase

SunSirs (May 9) — During the current cycle (May 1–7), the capacity utilization rate among Chinese polyethylene manufacturers stood at 76.1%, representing an increase of 3.39 percentage points compared to the previous cycle.

LLDPE falls under the broad category of polyethylene. With domestic polyethylene manufacturers' capacity utilization rising by 3.39 percentage points cycle-over-cycle, supply-side volume has seen a marked increase, placing downward pressure on spot prices. On May 8, the benchmark PE2609 futures contract on the Dalian Commodity Exchange (DCE) closed at 8,060 RMB/ton—a decline of 165 RMB/ton from the previous trading day. The futures market trended lower in response to expectations of ample supply, maintaining an overall bearish trajectory.

LDPE is one of the core varieties within the polyethylene complex; the rise in the industry's overall capacity utilization has driven an increase in market supply, creating a bearish environment for spot prices. All polyethylene-related futures contracts closed lower across the board; amid expectations of a loose supply-demand balance, prices remain susceptible to downward pressure, and the short-term market outlook remains weak.

HDPE is another key variety within the polyethylene complex. The rise in capacity utilization directly boosts the industry's overall supply levels, thereby suppressing spot market valuations. The futures market has recently undergone a correction driven by bearish supply-side fundamentals; it continues to trend bearishly in the short term, with prices facing significant downward pressure.

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