[pe daily review] orders maintain rigid demand, prices mainly slightly drop

1. Today's Summary

①、 Negotiations between Russia and Ukraine continue to release momentum. Geopolitical tensions are expected to ease further, leading to a decline in international oil prices. NYMEX Crude oil futures For the September contract, it closed at $62.35 per barrel, down $1.07, a month-on-month change of -1.69%. For the ICE Brent October contract, it closed at $65.79 per barrel, down $0.81, a month-on-month change of -1.22%.

②、 The market price fluctuation for HDPE is -9 to 5 yuan/ton, for LDPE it is 0 yuan/ton, and for LLDPE it is -7 yuan/ton.

2. Spot Overview

The cost support weakened, with weak transactions in the morning, while the macroeconomic factors had some influence. In the afternoon, inquiries increased, companies held firm on prices, and low-priced transactions were predominant. The HD PE market price change range is -19 to -6 yuan/ton, the LDPE market price is -21 yuan/ton, and the LLDPE market price is -15 yuan/ton.

3 ======== translates to "futures spot basis."

The main LL contract fluctuated upwards, opening at 7302 yuan/ton. As of 15:00, the closing price was 7347 yuan/ton, an increase of 27 yuan compared to the previous settlement price. The trading volume was 400,500 lots, and the open interest was 381,600 lots. Today's futures-spot basis was -187 yuan/ton, compared to -90 yuan/ton on the previous working day.

4 Production Dynamics

Capacity utilization rate Stability maintenance The oil production cost is 7477 yuan/ton; oil production profit is -177 yuan/ton; coal production profit is 803 yuan/ton.

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

5 Market sentiment

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

6. Price Prediction

In the short term, Supply-side pressure remains, prompting cautious increases; on the demand side, there is a slow pace of advancement. However, recent government policies have continuously released messages to boost demand, increasing traders' confidence in the market outlook, with a focus on actively placing orders. Expected The price of polyethylene is expected to slightly increase tomorrow. 。

7. Related Product Information

Crude Oil Market: The main trading logic of the international crude oil market has not changed, with positive factors coming from the continuation of U.S. sanctions policy on oil-producing countries and the continuation of the traditional U.S. consumption peak season, while the negative factor is the geopolitical situation easing compared to the previous period. OPEC+ maintains its stance on increasing production amid a weak global economy. The EIA inventory data scheduled for release this evening is crucial. Currently, U.S. commercial crude oil shows a declining trend, indicating that the benefits of the traditional peak fuel consumption season continue. Bright International oil prices are expected to show an upward trend.

8. Data Calendar

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