[PE Daily Review] Market Confidence Insufficient, Focus on Concession to Reduce Inventory

1. Today's Summary

①. The market is concerned about the risk of long-term oversupply, coupled with weakening demand in the United States, leading to a decline in international oil prices. NYMEX crude oil futures for the October contract fell by $1.30 per barrel to $62.37, down 2.04% from the previous period; ICE Brent oil futures for the November contract fell by $1.12 per barrel to $66.37, down 1.66% from the previous period.

②、 The HD PE market price change range is -21 to -1 yuan/ton, the LDPE market price is -9 yuan/ton, and the LLDPE market price is -14 yuan/ton.

2. Spot Market Overview

The support from the cost side has continuously strengthened, and short-term downstream inventory replenishment maintains essential demand, making further improvements unlikely. The strong sentiment among industry players is gradually weakening, leading to price concessions for sales. As a result, polyethylene prices have slightly declined, but transactions have improved somewhat. The price fluctuation range for the HDPE market is -4 to 4 yuan/ton, for LDPE it is -3 yuan/ton, and for LLDPE it is -2 yuan/ton.

3 Spot-Futures Basis

The main LL contract fluctuated downward, opening at 7200 yuan/ton. By 15:00, the closing price was 7169 yuan/ton, a decrease of 47 yuan/ton compared to the previous settlement price. The trading volume was 244,400 lots, and the open interest was 561,100 lots. Today's futures-spot basis was -49 yuan/ton, an increase of 10 yuan/ton compared to the previous working day.

4 Production Updates

Capacity utilization rate from The percentage changed from 77.53% to 77.69%. The oil-based production cost is 7,471 yuan/ton; the oil-based production profit is -221 yuan/ton; the coal-based production profit is 912 yuan/ton.

Figure 3   Trend of Domestic Polyethylene Capacity Utilization Rate	Figure 4   Domestic polyethylene profit and price comparison (yuan) /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 Prediction

In the short term, Enterprise Although more units are shutting down, supply remains at a relatively high level, and spot availability in the market is ample, resulting in some supply pressure. Downstream operating rates are expected to rise, with pre-holiday stocking activities taking place and orders anticipated to improve. Considering the overall expectation of increased imports... Therefore, it is expected that the polyethylene market will primarily see a slight increase next week. 。

7. Relevant Product Information

Crude Oil Market: The main trading logic of the international crude oil market has not changed. The positive factors come from the continuation of U.S. sanctions on oil-producing countries and geopolitical uncertainties, while the negative factors are... OPEC+ maintains its stance on increasing production amid a weak global economy. Recently, the impact of geopolitical tensions has lessened, and market focus has returned to supply and demand factors. Concerns about oversupply still persist. next week International oil prices will show a slight... Fall Situation.

8. Data Calendar

3 PolyethyleneData Overview Table (Unit: Ten Thousand Tons)