This Week's Plastics Market Declines, How Will the Market Trend Next Week

With the traditional peak demand season approaching, market confidence is gradually recovering; however, the short-term price trend remains primarily driven by the interplay between costs and supply-demand dynamics. This article will straightforwardly analyze the market trends of polyethylene (PE) and polypropylene (PP) for the upcoming week from the perspectives of cost, supply and demand, and regional price differences.

1. Cost side: Continuous downward pressure on international oil prices weakens cost support.

This week, international oil prices have fallen for three consecutive days. As of yesterday's close, WTI crude oil was priced at $63.48 per barrel (a decrease of 0.77%), and Brent crude oil was priced at $66.99 per barrel (a decrease of 0.90%). Concerns about the balance of supply and demand in the market have intensified, mainly due to two factors: first, OPEC+ may accelerate its pace of production increase to address the uncertainty in demand prospects; second, U.S. crude oil inventories unexpectedly increased by 2.4 million barrels (while the market expected a decrease of 2 million barrels), further suppressing oil prices. If the decline in oil prices continues, the cost support for polyolefins will continue to weaken, but attention needs to be paid to the short-term disruptions to oil prices caused by geopolitical risks.

2. Polyethylene (PE): Marginal improvement in supply and demand, cautious short-term increase

1. Price PerformanceThis week, PE prices overall declined, with LLDPE dropping 80 yuan/ton and LDPE partially dropping 100 yuan/ton. By region, North China LLDPE 7042 was quoted at 7140-7250 yuan/ton (some increased by 10 yuan/ton), East China at 7170-7380 yuan/ton (unchanged), South China at 7380-7650 yuan/ton (unchanged), and Southwest China at 7130-7200 yuan/ton (down 20 yuan/ton); LDPE 2426H mainstream was quoted at 9460-9950 yuan/ton, with parts of North and East China down 20-30 yuan/ton, and other regions remaining stable.

2. Supply and Demand Dynamics：

   • Supply sideNext week, Lanzhou Petrochemical's LDPE and Yangzi Petrochemical's HDPE units are scheduled for maintenance, while Shanghai Petrochemical's LDPE line 3 is planned to restart. The volume of imported resources arriving at port is expected to decrease, which may slightly ease supply pressure.
   • Demand sideThe downstream has entered the traditional peak season of "Golden September," with the operating rate continuing to rise and the support from rigid demand strengthening.
   • Short-term outlookWith the marginal improvement in supply and demand combined with the recovery of market confidence, PE prices may cautiously rise. However, attention should be paid to the potential suppression of the increase by a decline in oil prices on the cost side.

3. Polypropylene (PP): Supply Increase and Delayed Demand Recovery, Stable Prices in the Short Term.

1. Price PerformanceThis week, the price of PP raffia decreased by 30 yuan/ton, with the mainstream prices reported at 6,820-7,150 yuan/ton. By region, North China reported prices of 6,850-7,050 yuan/ton (unchanged), East China reported 6,750-7,000 yuan/ton (down 30 yuan/ton), South China reported 6,850-7,000 yuan/ton (down 30 yuan/ton), and Southwest China reported 6,950-7,150 yuan/ton (unchanged).

2. Supply and Demand Dynamics：

   • Supply sideCNOOC Daxie Petrochemical Phase II Line One 450,000-ton/year facility expansion, with a significant increase in supply.
   • Demand sideThe recovery of new downstream orders is slow, and demand follow-up is insufficient. In the short term, procurement mainly focuses on immediate needs.
   • Short-term outlookUnder the game between supply pressure and weak demand, PP prices are expected to remain stable. Attention should be paid to the pace of subsequent demand release.

4. Medium to Long-Term Outlook: Federal Reserve Rate Cuts and Demand Recovery May Become Catalysts for Price Increases

If the Federal Reserve initiates an interest rate cut cycle, global liquidity easing will boost sentiment in the commodity market. At the same time, as the peak demand season of "Golden September and Silver October" deepens, the operating rate downstream will further increase, potentially providing mid- to long-term upward momentum for polyolefin prices. However, it is necessary to continuously monitor variables such as oil price trends, OPEC+ policies, and domestic facility maintenance plans.