[PE Daily Review] High-Price Transactions Face Resistance, Orders Maintain Just-Needed Demand

1. Today's Summary

① The market reassessed the progress of the Russia-Ukraine peace talks and believes that there are still opportunities for easing geopolitical tensions, leading to a decline in international oil prices. NYMEX crude oil futures for the October contract fell by $1.55 per barrel to $63.25, a week-on-week decrease of 2.39%; ICE Brent crude oil futures for the October contract dropped by $1.58 per barrel to $67.22, a week-on-week decrease of 2.30%.

②、 The HDPE market price fluctuation ranges from -3 to 8 yuan/ton, the LDPE market price increased by 11 yuan/ton, and the LLDPE market price decreased by 4 yuan/ton.

2. Spot Market Overview

Macroeconomic tailwinds continue to boost market confidence, cost-side support strengthens, and fundamentals have improved. Industry players mostly implement slight price increases, but sales at high price levels face resistance, resulting in limited transaction volumes. The HDPE market price fluctuated between -3 to -8 yuan/ton, the LDPE market price increased by 11 yuan/ton, and the LLDPE market price decreased by 4 yuan/ton.

3 = Futures-spot basis

The main LL contract fluctuated weakly, opening at 7,364 yuan/ton. By 15:00, the closing price was 7,389 yuan/ton, down 63 yuan from the previous settlement price. The trading volume was 222,300 lots, and the open interest was 412,300 lots. Today's futures-spot basis was -114 yuan/ton, an increase of 18 yuan/ton compared to the previous working day.

4 Production Updates

Capacity utilization rate from 76.87% changed to 79.28%. Oil-based production cost is 7619 yuan/ton; oil-based production profit is -319 yuan/ton; coal-based production profit is 923 yuan/ton.

Figure 3   Trend of Domestic Polyethylene Capacity Utilization Rate	Graph 4   Comparison of Domestic Polyethylene Profit and Price (Yuan) (per ton)
Source of data: Longzhong Information	Data Source: Longzhong Information

5 Market sentiment

Table 2 Sentiment Expectations of Domestic Polyethylene Upstream and Downstream Practitioners

6. Price Forecast

In the short term, Recently, enterprise maintenance has increased, alleviating supply pressure. Downstream factories are restocking, but the intensity of restocking remains weak. The positive impact of the macro environment still exists, while market participants have become more cautious. expected Polyethylene prices are expected to fluctuate within a narrow range tomorrow. 。

7. Relevant Product Information

Crude Oil Market: The main trading logic of the international crude oil market remains unchanged. The positive factors come from the continuation of U.S. sanctions on oil-producing countries, the persistence of the traditional U.S. consumption peak season, and the uncertainty of the Russia-Ukraine situation, while the negative factor is the easing of the Israel-Palestine situation. OPEC+ maintains its stance on increasing production and the global economy remains lackluster. Tonight’s U.S. EIA inventory data is an important indicator and currently shows a continued downward trend, reflecting that the traditional peak season for fuel consumption in the U.S. is still ongoing. It is expected that international oil prices will show an upward trend today. Tomorrow International oil prices will show rise Situation 。

8. Data Calendar

Table 3   Domestic Polyethylene Data Overview Table (Unit: Ten Thousand Tons)