Continuous decline in polyethylene high pressure and subsequent partial reduction in supply

In 2023, the domestic high-pressure market will weaken and decline. For example, ordinary film material 2426H in the North China market will decline from 9000 yuan/ton at the beginning of the year to 8050 yuan/ton at the end of May, with a decline of 10.56%. For example, 7042 in the North China market will decline from 8300 yuan/ton at the beginning of the year to 7800 yuan/ton at the end of May, with a decline of 6.02%. The high-pressure decline is significantly higher than linear. As of the end of May, the price difference between high-pressure and linear has narrowed to the narrowest in the past two years, with a price difference of 250 yuan/ton.

The continuous decline in high-pressure prices is mainly affected by the background of weak demand, high social inventory, and an increase in imported low-priced goods, as well as the serious imbalance between supply and demand of the products themselves. In 2022, the 400000 ton high-pressure device of Zhejiang Petrochemical Phase II was put into operation in China, with a domestic high-pressure production capacity of 3.635 million tons. There was no new production capacity in the first half of 2023. High voltage prices continue to decline, and some high voltage devices produce EVA or coating materials, microfiber materials, such as Yanshan Petrochemical and Zhongtian Hechuang, but the increase in domestic high voltage supply is still significant. From January to April 2023, the domestic high-pressure production reached 1.004 million tons, an increase of 82200 tons or 8.58% compared to the same period last year. Due to the sluggish domestic market, the high-pressure import volume decreased from January to April 2023. From January to April, the domestic high-pressure import volume was 959600 tons, a decrease of 39200 tons or 3.92% compared to the same period last year. At the same time, exports increased. From January to April, the domestic high-pressure export volume was 83200 tons, an increase of 28800 tons or 52.94% compared to the same period last year. The total domestic high-pressure supply from January to April 2023 was 1.9168 million tons, an increase of 14200 tons or 0.75% compared to the same period last year. Although the increment is limited, in 2023, domestic demand is sluggish, and the demand for industrial packaging film is shrinking, which significantly suppresses the market.