Based on the current known maintenance losses, it is expected that the maintenance losses of the polyethylene plant in August will significantly decrease compared to the previous month. Based on considerations such as cost profit, maintenance, and the implementation of new production capacity, it is expected that the polyethylene production from August to December 2024 will reach 11.92 million tons, with a year-on-year increase of 0.34%.
From the current performance of various downstream industries, the autumn reserve orders in the northern region have been gradually launched, with 30% -50% of large-scale factories operating, and other small and medium-sized factories receiving scattered orders. Since the beginning of this year's Spring Festival, holiday arrangements have shown strong scalability, with more abundant and diverse holiday arrangements. For consumers, this means more frequent and flexible travel choices, while for businesses, it means more peak business seasons and longer service windows. The period from August to early September covers multiple consumption nodes such as the second half of summer vacation, the start of school season, Mid Autumn Festival, and National Day holidays. Downstream demand often increases to a certain extent, but from the perspective of 2023, the overall downstream demand of the plastic products industry is weak.
From the comparison of changes in apparent consumption of polyethylene in China, the cumulative apparent consumption of polyethylene from January to June 2024 was 19.6766 million tons, an increase of 3.04% year-on-year, and the apparent consumption of polyethylene showed a positive growth. According to the latest data released by the China Association of Automobile Manufacturers, from January to July this year, China's automobile production and sales reached 16.179 million and 16.31 million respectively, an increase of 3.4% and 4.4% year-on-year. Looking at the comparative data over the years, the apparent consumption of polyethylene in the second half of the year is generally better than that in the first half. For example, in some e-commerce promotion activities, sales of home appliances, home furnishings and other products often increase significantly. Based on e-commerce festivals and residents' consumption habits, the consumption level in the second half of the year is generally higher than that in the first half.
The growth of apparent consumption is mainly due to the increase in capacity expansion and export contraction in the second half of the year. At the same time, there are continuous macroeconomic favorable policies, which have boosted the real estate, infrastructure, daily necessities and other fields to varying degrees, providing financial activity and confidence support for consumption in the second half of the year. According to statistics, from January to June 2024, the total retail sales of consumer goods reached 2.3596 trillion yuan, a year-on-year increase of 3.7%. Recently, many regions have introduced preferential policies to continuously boost bulk consumption and accelerate the recovery of consumption in key areas. In addition, in order to cultivate and strengthen new growth points in consumption and promote stable consumption growth, the National Development and Reform Commission, together with relevant departments and units, has studied and formulated the "Measures for Creating New Consumption Scenarios and Cultivating New Growth Points in Consumption", which will provide assistance for further recovery of the consumer market.
Overall, the polyethylene market is expected to face a clear increase in supply and expansion of consumption in the second half of the year. However, the market is cautious about the future prospects, with companies generally adopting pre-sale and fast selling strategies, and trade also leaning towards a fast in and fast out model. Under the pressure of capacity expansion, market concepts may not undergo significant changes, and proactive destocking will remain the main trend in the market.
Post time: Aug-19-2024