[PE Daily Review] Trading Improves Slightly, Prices Fluctuate Modestly

1. Today's Summary

①. The market is watching the progress of the Russia-Ukraine situation, and combined with short covering by traders, international oil prices have risen. NYMEX crude oil futures for September settled at $63.88/barrel, remaining stable compared to the previous trading day; ICE Brent crude oil futures for October rose by $0.16 to $66.59/barrel, a month-on-month increase of 0.24%.

②、 The HDPE market price changed by -3 to 0 yuan/ton, the LDPE market price increased by 22 yuan/ton, and the LLDPE market price increased by 2 yuan/ton.

2. Overview of Spot Market

At the beginning of the week, market trading sentiment improved, and with stronger cost support, Due to the maintenance of the LDPE unit, market supply has decreased, leading to a slight tentative increase in mainstream market prices. On the cost side, crude oil has room for upward movement, providing strong cost support for PE; on the supply side, the restart of maintenance units and the commissioning of new units have increased market supply, keeping supply pressure unchanged. Therefore, the market is expected to remain mainly range-bound. HDPE market prices have changed within the range of -3 to 0 yuan/ton, LDPE market prices increased by 22 yuan/ton, and LLDPE market prices increased by 2 yuan/ton.

3 Basis between spot and futures prices

The main LL futures contract fluctuated with a slight upward trend, opening at 7,298 yuan/ton. As of 15:00, the closing price was 7,314 yuan/ton, up 20 yuan from the previous settlement price. The trading volume was 175,700 lots, and the open interest was 252,500 lots, down 18,000 lots. Today's futures-spot basis was -124 yuan/ton, a decrease of 24 yuan/ton compared to the previous working day.

4 Production Updates

Capacity utilization rate from The percentage changed from 82.55% to 84.93%. The oil-based production cost is 7,543 yuan/ton; the oil-based production profit is -193 yuan/ton; the coal-based production profit is 919 yuan/ton.

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

5 Market sentiment

Table 2 Sentiment Expectations of Domestic Polyethylene Upstream and Downstream Practitioners

6. Price Forecast

In the short term, Crude oil cost support remains strong; polyethylene manufacturers are restarting units after maintenance, increasing market supply; on the demand side, the downstream off-season is nearing its end, and some downstream factories are replenishing inventory, showing signs of improving demand. ， Expected Polyethylene prices are expected to edge up slightly tomorrow. 。

7. Relevant Product Information

Crude Oil Market: The main trading logic of the international crude oil market has not changed. The positives come from the continuation of U.S. sanctions policies on oil-producing countries and the continuation of the traditional U.S. consumption peak season, while the negatives are due to the geopolitical situation being relatively more relaxed than before. OPEC+ maintains its stance on increasing production amid a weak global economy. This week's meeting between the US and Russian presidents is a key event, which may lead to a relaxation of geopolitical tensions and consequently reduce potential supply risks. bright The international oil prices will show a small fall Situation.

8. Data Calendar

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