[PE Daily Review] Increase in Rigid Demand Orders, Prices Steady to Strong

1. Today's Summary

1. Continued production increases by OPEC+ exert bearish pressure, and the geopolitical situation appears temporarily eased, leading to a decline in international oil prices. NYMEX crude oil futures September contract fell $1.13 per barrel to $65.16, down 1.70% week-on-week; ICE Brent crude oil futures October contract fell $1.12 per barrel to $67.64, down 1.63% week-on-week.

②、 The price change range for the HDPE market is -8 to 8 RMB/ton, the LDPE market price is +11 RMB/ton, and the LLDPE market price is +12 RMB/ton.

2. Spot Market Overview

Due to the continued decline in crude oil prices, support for polyethylene has weakened. Recently, with positive macroeconomic conditions, producers have a strong intention to maintain prices. Downstream orders remain at rigid demand levels, with limited order increases, resulting in slight price adjustments. The price fluctuation range of HDPE market is -8 to 8 yuan/ton, the LDPE market price increased by 11 yuan/ton, and the LLDPE market price increased by 12 yuan/ton.

3 Futures-Cash Basis

The main contract of LL fluctuated and moved upward, opening at 7,323 yuan/ton. As of 15:00, the closing price was 7,321 yuan/ton, an increase of 33 yuan compared to the previous settlement price. The trading volume was 166,800 lots, and the open interest was 291,500 lots, a decrease of 10,020 lots. Today's futures-to-spot basis was -101 yuan/ton, an increase of 42 yuan/ton compared to the previous working day.

4 Production Dynamics

Capacity utilization rate from 86.53% changed to 86.63%. Oil-based production cost is 7,627 yuan/ton; oil-based profit is -277 yuan/ton; coal-based profit is 1,035 yuan/ton.

Figure 3   Domestic Polyethylene Capacity Utilization Rate Trend	Image 4   Domestic Polyethylene Profit and Price Comparison (Yuan) /ton
Data Source: Longzhong Information	Source: Longzhong Information

5 Market sentiment

table 2 Sentiment Expectations of Domestic Polyethylene Upstream and Downstream Practitioners

6. Price Prediction

In the short term, polyethylene producers have a strong intention to support prices. ， With the support of favorable macroeconomic factors ， Although the number of orders on the demand side has increased, the level of operations remains weak. Therefore Tomorrow Polyethylene market price volatile trend Primarily.

7. Related Product Information

Crude Oil Market: The main trading logic of the international crude oil market has not changed. The bullish factors come from the continuation of U.S. sanctions policies against oil-producing countries and the ongoing traditional peak consumption season in the United States, while the bearish factor is the easing of geopolitical tensions compared to earlier periods. OPEC+ maintains its stance on production increase amid a sluggish global economy. The EIA inventory report to be released tonight is crucial data, and current forecasts suggest a possible decline. Additionally, whether the U.S. will impose new sanctions on Russia is entering a critical period, increasing potential supply risks. Tomorrow International oil prices will show rise Situation.

8. Data Calendar

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