[PE Weekly Preview] Merchant Discounts Expected to Increase, Prices May Fluctuate Slightly Downward

1. Key Focus Areas

1 Cost side: The recent intensification of the Russia-Ukraine conflict has heightened market concerns about potential supply risks, leading to a rise in international oil prices. The NYMEX crude oil futures for the November contract increased by $0.74 per barrel to $65.72, up 1.14% compared to the previous period; the ICE Brent crude futures for the November contract rose by $0.71 per barrel to $70.13, up 1.02% compared to the previous period. 。

2 Current parking device: Currently, there are 26 sets of polyethylene facilities involved in the parking devices, and there are no new facility maintenance activities.

3 Market Review of Yesterday: The previous day, the domestic polyethylene market prices mostly declined, with a range of 3-36 per ton. As the news of the Federal Reserve's 25 basis point rate cut was confirmed, market expectations receded, leading to a significant correction in the market. Additionally, with the National Day holiday approaching, suppliers actively reduced inventories. However, the downstream buying interest was limited, prompting suppliers to offer discounts to clear stock, resulting in price drops.

Core logic: Inventory pressure increases, price fluctuations show a weak trend.

2. Price List Form

3. Market Outlook

It is expected that the polyethylene price will mainly fluctuate with a slight decline in this period. Key points to pay attention to: 1. Cost side. It is anticipated that the support from oil-based costs will weaken, while coal-based costs will remain relatively unchanged; 2. Supply side. Market supply involves the planned restart of facilities such as Lianyungang Petrochemical, Sinochem Quanzhou, and Baolai LyondellBasell, with only the newly added Zhenhai Refining and Petrochemical planned for maintenance, and the total production is expected to be 678,500 tons, an increase of 35,800 tons compared to the previous period; 3. Demand side. It is expected that the overall operating rate of downstream industries for PE will decrease by 3.14% in this period. Some downstream factories may stop operations or have holidays during the holiday period, but based on past trends, the demand for agricultural films usually enters a concentrated period after the holiday, and downstream companies tend to stock up to ensure continuity of production after the holiday, leading to an increase in polyethylene demand. Overall, as the holiday approaches, the pressure for inventory reduction in the market increases, and it is expected that merchants will increase discounts for sales, resulting in a potential slight decline in prices.

IV. Data Calendar