PE Daily Review: Enterprises Reduce Prices to Deplete Inventory, Downstream Demand for Essential Purchases

1. Today's Summary

1. The Israeli-Palestinian sides have reached a ceasefire agreement, and the instability of the geopolitical situation has eased, leading to a decline in international oil prices. NYMEX crude oil futures for November are at $61.51, down $1.04 per barrel, a decrease of 1.66%; ICE Brent crude futures for December are at $65.22, down $1.03 per barrel, a decrease of 1.55%.

②、 The price fluctuation range for the HDPE market is -28 to 4 yuan/ton, the LDPE market price is -16 yuan/ton, and the LLDPE market price is -20 yuan/ton.

2. Spot Overview

Recently, the arrival of imported resources has increased, leading to an accumulation of domestic inventory. Orders are maintained on a just-needed basis, and industry insiders hold a rather pessimistic view of the market outlook. The focus is primarily on offering discounts to reduce inventory. The price fluctuation range for the HDPE market is -28 to 4 yuan/ton, the market price for LDPE is -16 yuan/ton, and the market price for LLDPE is -20 yuan/ton.

3

The main LL contract fluctuated downward, opening at 7,075 yuan/ton. As of 15:00, the closing price was 7,037 yuan/ton, down 36 yuan/ton compared to the previous settlement price. The trading volume was 225,100 lots, and the open interest was 557,900 lots. Today's futures-spot basis was -17 yuan/ton, up 10 yuan/ton from the previous working day.

4 Production Dynamics

Capacity utilization is The change from 75.37% to 74.44%. The cost of oil production is 7,387 yuan/ton; the oil production profit is -237 yuan/ton; the coal production profit is 602 yuan/ton.

Figure 3   Domestic polyethylene capacity utilization trend	Figure 4   Domestic polyethylene profit and price comparison (yuan) /ton)
Data Source: Longzhong Information	Data Source: Longzhong Information

5 Market sentiment

Table 2. Sentiment Expectations of Domestic Polyethylene Upstream and Downstream Practitioners

6. Price Prediction

In the short term, the cost support of crude oil for polyethylene is limited. On the supply side, both imported resources and domestic production show an increasing trend, leading to greater supply pressure. On the demand side, downstream orders mainly maintain just-in-time inventory replenishment. Overall, it is expected that in the short term, the polyethylene market price may undergo a weak adjustment, with a magnitude of... 10-50 yuan/ton.

7. Related Product Information

Crude Oil Market: In the short term, the main trading logic of the international crude oil market has not changed. The positives come from the continuation of U.S. sanctions policies against oil-producing countries and geopolitical uncertainties, while the negatives are OPEC+ maintains its stance on increasing production amid poor global economic conditions. The easing situation between Israel and Palestine is still a market focus, and coupled with OPEC+'s firm position on production increases, international oil prices are expected to show a downward trend tomorrow.

8. Data Calendar

Table 3   Domestic Polyethylene Data Overview Table (Unit: 10,000 tons)