May Polyethylene Overall Production Set to Rebound, Supply Structure Diverges

Constrained by high costs and tight raw material supply, domestic polyethylene (PE) production in April 2026 fell significantly. According to data from JLC, China’s total PE output in April was 2.4612 million tonnes, down sharply by 14.58% month on month and also down 9.52% year on year. Entering May, as some previously shut-down units gradually restart, market supply is expected to recover to some extent, but clear structural divergence among different product categories remains.

Comparison of Domestic PE Production in China from April to May 2026

I. LDPE: Maintenance Impact Causes Output to Decline Against the Trend

In May, affected by maintenance shutdowns at facilities operated by companies such as Yangzi BASF and Wanhua Chemical, the operating rate of LDPE declined slightly. The output for the month is expected to be 342,500 tons, down 3.78% month-on-month. As of May 12, the LDPE production scheduling ratio had fallen to 9.55%, narrowing by 0.47 percentage points compared with the second half of April.

Structural changes: production of specialty materials such as cable compounds, heavy packaging, coatings, and microfiber materials decreased, while production of standard film materials increased slightly.

Demand constraints: downstream agricultural film demand has weakened, and market trading is sluggish. As of May 8, the operating rates of packaging film and thin film enterprises were 50% and 46%, respectively. The off-season demand continues to suppress prices and enterprises’ production appetite.

2. HDPE: Plant Restarts Drive a Significant Recovery in Output

Thanks to the planned restarts of multiple units at Guangdong Petrochemical, Sinochem Quanzhou, Zhejiang Petrochemical, and Shanghai Jinfei, HDPE has become the main driver of the supply recovery in May. Output is expected to reach 1.1997 million tons, a significant month-on-month increase of 19.92%.

Structural changes: the volumes of pipe materials and low-pressure film materials increased significantly, while hollow molding and injection molding increased slightly; however, the production of CPE and high-molecular-weight products decreased.

Terminal performance: As of May 8, the operating rates for pipes, hollow products, and injection-molded products were 37%, 51%, and 44.50%, respectively. After the holiday, the terminal procurement willingness is relatively weak, mainly focusing on replenishing inventory based on immediate needs when prices are low.

3. LLDPE: Supply slightly increased, inventory digestion slow.

In May, with the restart of facilities at certain companies in Shanghai, Zhenhai Refining & Chemical, and Zhong'an, along with limited new maintenance, LLDPE production is expected to be around 1.15 million tons, a slight month-on-month increase of 4.07%.

Structural changes: scheduling for metallocene, injection molding, and POE has increased; while scheduling for products containing antiblocking agents and medium- to low-melt-index general-purpose grades has correspondingly decreased.

Market situation: Demand is in the seasonal off-season, spot transactions are sluggish, and coupled with slow inventory depletion, this is putting pressure on LLDPE prices.

IV. Market Outlook

Overall, domestic polyethylene production rebounded in May, but the supply-demand imbalance has not eased. The geopolitical situation in the Middle East continues to disturb costs, while demand remains in the off-season, leaving producers under ongoing sales pressure. It is expected that the market will remain range-bound in the short term, and attention should be focused on changes in the cost side and the actual realization of supply.