Starting from April, the LDPE price index rapidly rose due to factors such as resource scarcity and hype on the news front. However, in recent times, there has been an increase in supply, coupled with a cooling market sentiment and weak orders, resulting in a rapid decline in the LDPE price index. So, there is still uncertainty about whether market demand can increase and whether the LDPE price index can continue to rise before the peak season arrives. Therefore, market participants need to closely monitor market dynamics to cope with market changes.
In July, there was an increase in maintenance of domestic LDPE plants. According to statistics from Jinlianchuang, the estimated loss of LDPE plant maintenance this month is 69200 tons, an increase of about 98% compared to the previous month. Although there has been an increase in maintenance of LDPE equipment recently, it has not improved the previously declining market situation. Due to the traditional off-season of downstream demand and low enthusiasm for terminal procurement, there has been a clear phenomenon of inversion in the market, with some regions experiencing an inversion rate of around 100 yuan/ton. Affected by market behavior, although production enterprises have the intention to raise prices, they are facing a situation of insufficient upward momentum and are forced to lower their ex factory prices. As of July 15th, the spot price of Shenhua 2426H in North China was 10050 yuan/ton, a decrease of 600 yuan/ton or about 5.63% from the high price of 10650 yuan/ton at the beginning of the month.
With the restart of the previous maintenance equipment, it is expected that the supply of LDPE will increase. Firstly, the high-pressure 2PE unit of Shanghai Petrochemical has been restarted and converted to N220 production. There are reports that Yanshan Petrochemical's new high-pressure unit may be fully converted to LDPE products this month, but this news has not been officially confirmed. Secondly, there has been an increase in the practice of offering imported resources, and as imported resources gradually arrive at the port, the supply may increase in the later stage. On the demand side, due to July being the off-season for downstream products of LDPE film, the overall operating rate of production enterprises is relatively low. The field of greenhouse film is expected to show signs of improvement in August. Therefore, there is still room for a decline in LDPE market prices in the near future.
Post time: Jul-22-2024