[POE Daily Review] Off-Season Downstream Demand Weighs, Market Remains Stable but Weak

I. Today's Summary

1. International crude oil prices continued to decline, with the WTI July contract falling by $2.32 per barrel and the Brent August contract falling by $2.72 per barrel, further weakening cost-side support.

The overall prices of mainstream domestic POE grades remain stable, with slight price reductions for certain grades from LG Chem and Exxon, while sporadic low-priced sources in the market are causing some disturbances in the pricing.

Wanhua Chemical’s POE unit has entered maintenance, leading to a slight contraction on the supply side. However, downstream demand remains in the traditional off-season, inventories in the market continue to accumulate, and the supply-demand imbalance remains pronounced.

2. Spot Market Overview

Spot POE prices in China’s three major mainstream regional markets showed a divergent trend: in the Shanghai market, quotations for all Dow grades remained unchanged; LG Chem’s LC168 and LC565 were lowered by RMB 500/mt; ExxonMobil’s 9061 and 5061 saw slight concessions; and the low-end price of SABIC’s C1070D edged down. In the Jiangsu and Xiamen markets, prices for all mainstream grades remained stable. The mainstream quotations for Dow 8150 in the three regions were RMB 18,500–19,500/mt, RMB 18,500–19,500/mt, and RMB 19,000–20,000/mt, respectively. Today, the overall domestic POE market was stable with a soft tone. Sporadic low-priced cargoes circulated in the market, disrupting overall sentiment. Traders offered prices in line with market conditions, with no initiative to adjust quotations. Downstream buyers maintained rigid-demand procurement, with weak restocking interest. Trading across regional markets remained cautious, and actual transactions were conducted mainly on a deal-by-deal basis, with overall volume difficult to expand.

III. Market Forecast

The continued decline in crude oil futures has weakened cost support for upstream suppliers. Although Wanhua’s plant maintenance has led to a slight contraction in supply, it is insufficient to offset the bearish pressure from inadequate rigid demand during the downstream off-season and the ongoing inventory buildup at plants. The overall market supply-demand balance remains weak. Considering both costs and supply-demand fundamentals, the domestic POE market is expected to maintain a weak downward trend in the short term.

Editor: Abby

(Source: Zhuochuang)