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According to data from SunSirs, the average spot price of LLDPE (7042) was 8,301 RMB/ton on June 12 and 7,941 RMB/ton on June 17, a drop of 1.34%. The average price of LDPE (2426H) fell from 10,116 RMB/ton on June 12 to 9,766 RMB/ton on June 17, a decline of 3.46%. The average price of HDPE (5000S) dropped from 10,200 RMB/ton on June 12 to 10,125 RMB/ton on June 17, a decrease of 0.74%.
Recently, geopolitical risk premiums in the international crude oil market have subsided, causing oil prices to fluctuate downward. This shift in raw material costs has weighed on the polyethylene market.
The price-supportive impacts of maintenance shutdowns are fading, and market supply has have become ample. Several polyethylene production units resumed operations in mid-June. With the recovery of shipping from the Middle East, import volumes of LDPE have rebounded; an oversupply of high-pressure (HP) grade material is the primary reason to the steep decline in LDPE prices. Meanwhile, due to a prolonged maintenance shutdown at Yangzi Petrochemical, there is a temporary shortage of low-pressure (LP) grade material in East China, allowing spot prices in that region to show some resilience against the decline.
It is the off-season to agricultural films: demand to mulching films and greenhouse films has concluded, and operating rates to agricultural film production have dropped to yearly lows. Operating rates to packaging films, injection molding, blow molding, and coating products sectors have also declined, leading to a buildup of finished product inventories. Downstream factories are purchasing strictly on an as-needed basis with no advance restocking, while traders are actively lowering prices to clear inventory, further exacerbating the price drop.
Driven by continued ample supply and the drag of the downstream off-season, polyethylene prices are expected to fluctuate weakly in the short term. Following the sharp decline, there might be a slight, narrow recovery, however the possible to a rebound remains limited.
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