[PE Daily Review] Macro Support Still Exists, Prices Fluctuate

1. Today's Summary

①. The United States and the European Union have reached a new trade agreement, and the U.S. will shorten the deadline for new sanctions against Russia, leading to an increase in international oil prices. NYMEX crude oil futures for the September contract rose by $1.55 per barrel to $66.71, a month-on-month increase of +2.38%; ICE Brent crude futures for the September contract rose by $1.60 per barrel to $70.04, a month-on-month increase of +2.34%.

②、The market price of HDPE changed by -10 to -3 yuan/ton, the market price of LDPE increased by 2 yuan/ton, and the market price of LLDPE increased by 1 yuan/ton.

2. Overview of Spot Market

Table 1   Domestic Polyethylene Closing Price Summary Table (Unit: Yuan) (tons)

From the current cost perspective, the support from crude oil costs is acceptable. On the supply and demand side, the pressure on supply continues to increase as maintenance units gradually start up and new units are commissioned. On the demand side, downstream demand is gradually recovering, with some enterprises engaging in restocking activities. Although macroeconomic support is strong, the marginal improvement in supply and demand is limited. The price change range for the HDPE market is -10 to -3 yuan/ton, the LDPE market price is +2 yuan/ton, and the LLDPE market price is +1 yuan/ton.

3 Futures-cash basis

The main LL contract fluctuated downward, opening at 7,341 yuan/ton. As of 15:00, the closing price was 7,385 yuan/ton, 18 yuan higher than the previous settlement price. Trading volume was 239,700 lots, with an open interest of 343,600 lots, down by 2,781 lots. Today's futures basis was -135 yuan/ton, compared to -50 yuan/ton on the previous trading day.

4 Production Updates

Capacity utilization rate from The change from 80.52% to 81.01%. The oil-based production cost is 7,815 yuan/ton; the oil-based profit is -465 yuan/ton; the coal-based profit is 1,238 yuan/ton.

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

5 Market sentiment

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

6. Price Forecast

Short-term Overall demand remains weak, with limited downstream purchasing and only essential needs being met. In the short term, the market may be influenced by news, leading to a slight price rebound and an improvement in market sentiment. Therefore Tomorrow Polyethylene Market Price Oscillation Mainly.

7. Relevant Product Information

Crude Oil Market: The main trading logic in the international crude oil market has not changed. The positive factors come from the continuation of U.S. sanctions on oil-producing countries and the extension of the traditional U.S. consumption peak season, while the negative factor is the easing of geopolitical tensions compared to the previous period. OPEC+ maintains its stance on increasing production amid a sluggish global economy. The new trade agreement between the US and the EU has alleviated market concerns. Additionally, new US sanctions against Russia may come as early as early to mid-August, increasing potential supply risks. Tomorrow International oil prices will show an upward trend.

8. Data Calendar

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