[PE Daily Review] Bulls and Bears Diverge in Their Struggle, Spot Prices Likely to Face Pressure After a Short-Term Surge

1. Daily Summary

Today, spot prices of all polyethylene product categories in China moved higher. In some areas, tight spot supply drove prices to rise modestly with increased trading volume. International crude oil futures declined, and the resumption of navigation through the Strait of Hormuz has weakened the geopolitical supply-risk premium; however, improving macro sentiment together with tight spot availability for certain grades has boosted market participants’ trading confidence. Prices across the three major categories rose simultaneously: HDPE grades increased by RMB 28-63/ton, LDPE film grade rose by RMB 99/ton, and LLDPE film grade climbed by RMB 54/ton. Fundamentals of supply and demand remain weak, with downstream end-user restocking limited to just rigid demand, and the supply-heavy, demand-light pattern will constrain further upside potential.

2. Spot Overview

In terms of spot prices, all domestic PE subcategories rose across the board, with noticeable differences in the extent of increases among grades. HDPE small blow-molding grades led the gains, rising by 63 yuan/ton, while wire-drawing grades saw the smallest increase, up 28 yuan/ton. LDPE film grades recorded the strongest increase among all categories, with mainstream prices up 99 yuan/ton; LLDPE film grades rose by 54 yuan/ton. Market trading logic centered on the follow-up developments of the U.S.-Iran talks. Although crude oil declined, marginal macro-level positives prompted traders to proactively raise offer prices for shipments.

From a market trading perspective, in-market traders’ willingness to support prices has increased. Transactions for mainstream high-priced cargoes remain sluggish, while the market is mainly seeing demand-driven purchases of low-priced cargoes. Downstream end-users continue to maintain a cautious purchasing pace during the off-season, with no concentrated restocking activity, and overall market trading volume is average. Spot market prices have generally risen by RMB 50-200/ton, and some scarce cargoes have stronger bargaining power.

3. Market Forecast

In the short term, the domestic PE market is expected to fluctuate within a narrow and weak range, and this round of modest price increases is unlikely to be sustained. Looking ahead, a concentrated release of new supply will enter the market, previously shut-down units under maintenance will resume operations in succession, and imported cargo arrivals will increase, leading to a continued buildup of spot availability and rising shipment pressure on traders. Meanwhile, downstream demand remains weak amid the traditional off-season, end-user order follow-up is insufficient, and willingness to stock up in large volumes is subdued. With fundamentals dominated by strong supply and weak demand, PE prices across all grades are المتوقع to fluctuate weakly tomorrow, within a range of RMB 50–100/ton.

(The above analysis is based on publicly available market data for reference only and does not constitute investment advice.)