[PE Weekly Review] Spot Prices in the Polyethylene Market Narrowly Decline

1. Summary of Market Conditions This Week

This week, international oil prices fell as OPEC+ may continue to maintain a significant increase in production in September. Meanwhile, concerns over U.S. tariff policies continue to weigh on the oil market.

This week, some orders from sample enterprises of PE packaging film were delivered. The follow-up on new orders for finished products showed differentiated performance, with most short-term agreements having limited replenishment.

In the absence of directional guidance in the polyethylene market and without significant improvement on the demand side, a cautious and wait-and-see attitude continues to prevail, resulting in increased inventory levels.

2. Review of Polyethylene Market Trends This Week

This week, the domestic polyethylene spot market prices narrowly declined, with a range of 6-53 yuan/ton. The market was strongly influenced by policy factors, with the advancement of anti-involution efforts domestically, assessments of old facilities in the petrochemical industry, and inspections of coal mine production organized by the National Energy Administration. These activities have been gradually unfolding, leading the black series market. Consequently, market sentiment for polyethylene has somewhat improved. However, the supply-demand pattern has not improved, and the demand side's follow-up has been weak, causing both buyers and sellers in the market to become cautious. As a result, the increase in polyethylene prices has been limited, maintaining a narrow fluctuation range. The price of HDPE film stands at 7930 yuan/ton, down 33 yuan/ton from last week; LDPE film is priced at 9409 yuan/ton, down 53 yuan/ton from last week; LLDPE film is priced at 7405 yuan/ton, down 6 yuan/ton from last week.

3. Polyethylene Market Outlook

The polyethylene price is expected to tentatively rise in the next period, maintaining mainly narrow fluctuations. Key points to focus on: 1. Cost aspect. The cost support from oil-based feedstocks is expected to weaken, while coal-based feedstock cost support is expected to strengthen; 2. Supply aspect. Next week involves the restart of units at Fujian United, Daqing Petrochemical, Yanchang Zhongmei, Eneng Chemical, etc., with only the planned maintenance shutdown at Jinhai Chemical expected to increase. Total production next week is estimated at 646,300 tons, an increase of 31,200 tons compared to this week; 3. Demand aspect. The overall operating rate of PE downstream industries is expected to increase by 0.26% next week. Demand changes are relatively minor, with market cyclical restocking still present. Packaging demand for daily chemicals and food remains relatively steady, and some inventory replenishment continues, leading to extended production order days. Overall, polyethylene supply pressure is increasing while demand support is limited. The policy on assessing outdated capacities may drive the market to some extent, but attention is still needed on changes in the demand side. Prices may see tentative increases.