1. Price Trend

This week (November 18-22) polyethylene shows a weak downward adjustment. Among them, the average price of LDPE 2426H monitored by toodudu in East China is about 8,175 RMB/ton. The average price of HDPE 5000S is about 7,983.33 RMB/ton. The average price of LLDPE 7042 is 7,350 RMB/ton. Up to November 22, the price of LLDPE in East China shows a steady trend this week, and the price of LDPE and HDPE shows a narrow decreasing trend this week.

The polyethylene market (East China) generally falls by 50-100 RMB/ton this week. At the beginning of the week, the linear futures fluctuate and rise. And the international crude oil price rebounds after falling, providing a certain support to the market. However, as last week petrochemical companies has accumulated some inventory, the pressure of supply increase and price continuously reduces. Market cost support has weakened. Businessmen do business closely depending on market condition. Downstream players purchase based on exact demand. The overall market atmosphere is relatively light. Later in the week, as petrochemical inventory continues to fall, market supply pressure eases too some extent. Plus, with the boost of increasing linear future, the national PE market sentiment slightly improves. The prices of major regional sales companies are basically stable, and merchants are actively reporting higher price. Currently, the downstream is temporarily maintaining on-demand orders. Market growth needs time to be digested.

2. Market Analysis

Upstream: This week, international crude oil prices have raised, crude oil prices have continued to rise, and the cost of oily polyethylene will increase. On Monday (November 18), the WTI crude oil December futures settlement price is 57.05 US dollars per barrel, a decrease of 0.67 US dollars per barrel from the previous trading day, and the trading range is 56.55-58.09 US dollars per barrel. The Brent crude oil futures settlement price per barrel in January is 62.44 US dollars, down 0.86 US dollars / barrel from the previous trading day, and the trading range is 61.94-63.57 US dollars / barrel. On Friday (November 22), the WTI crude oil January 2020 futures settlement price is US $ 57.77 per barrel, a decrease of US $ 0.81 / barrel from the previous trading day, and the trading range is US $ 57.50-58.74 / barrel; Brent crude oil January 2020 futures settlement price is US $ 63.39 per barrel, a decrease of US $ 0.58 per barrel over the previous trading day, and the trading range is US $ 62.98-64.27 per barrel.

Manufacturer Dynamics: This week’s PE downstream agricultural film manufacturers ‘inventory is low. Due to restrictions of terminal demand, manufacturers’ enthusiasm for entering the market is weak. They are temporarily maintaining on-demand orders, and trading preference is weak. Some regions are still affected by strict environmental protection investigations, ending up with shrinking business orders and limited production.

Futures Trend: This week’s Liansu trend fluctuates upward. According to the data from toodudu, on November 22, the polyethylene futures L2001 main contract opens at 7,195. The highest price is 7240, the lowest price is 7.155, the closing price is 7,170, the previous settlement price is 7,130, and the settlement price is 7,195, up 40, up 0.56%, volume 390,870, positions 471,228, daily -36612. (Quotation unit: RMB/ton)

Import And Export: In September 2019, PE imports are about 13.402 million tons. Among them, LLDPE imports amounts to 0.402 million tons; HDPE imports amounts to 634,400 tons; LDPE imports amounts to 276,600 tons; the total polyethylene export in September 2019 is 17,200 tons.

3. Market Forecasting

toodudu’ analysts believe that the current rebound in international oil prices has given the market a boost. Linear futures rise slightly and the spot market has more inquiries. The market sentiment improves. Petrochemical inventory continues to decline, associated with some manufacturers’ equipment being still in the state of maintenance, which to a certain extent eases the supply pressure. However, some petrochemical companies have lowered their ex-factory prices, which have weakened their support for market costs. It is expected that there may be a narrow range of shocks in the short term.

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