Affected by the Spring Festival holiday, the PE market fluctuated narrowly in February. At the beginning of the month, as the Spring Festival holiday approached, some terminals stopped work early for vacation, market demand weakened, trading atmosphere cooled, and the market had prices but no market. During the mid Spring Festival holiday period, international crude oil prices rose and cost support improved. After the holiday, petrochemical factory prices increased, and some spot markets reported higher prices. However, downstream factories had limited resumption of work and production, resulting in weak demand. In addition, upstream petrochemical inventories accumulated high levels and were higher than inventory levels after the previous Spring Festival. Linear futures weakened, and under the suppression of high inventory and low demand, market performance was weak. After the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival), the downstream terminal started to work better, and the strong operation of futures also boosted the mentality of the market merchants. The market price rose slightly, but under the pressure of the main inventory in the middle and upper reaches, the price increase was limited.
In March, some domestic enterprises planned to carry out maintenance on their equipment, and some petrochemical enterprises reduced their production capacity due to damaged production profits, which reduced domestic supply in March and provided some positive support for the market situation. However, it is worth noting that at the beginning of the month, the inventory in the middle and upstream of PE remained at a high level, which may have suppressed the market situation. As the weather warms up and domestic demand enters the peak season, downstream construction will gradually increase. In March, Tianjin Petrochemical, Tarim Petrochemical, Guangdong Petrochemical, and Dushanzi Petrochemical in China plan to undergo minor repairs, while Zhongke Refining and Petrochemical and Lianyungang Petrochemical plan to stop maintenance in mid to late March. Zhejiang Petrochemical's Phase II 350000 ton low-pressure plan is to stop maintenance for one month at the end of March. The expected supply in March has decreased. Considering the factors of the Spring Festival holiday in February and the accumulation of social inventory, the amount of resources that need to be digested in March has increased, which may suppress the upward trend of the market in the first half of the year. It is difficult for the market to continue to rise smoothly, and most of the time, inventory is still mainly digested. After mid March, downstream construction has increased, demand has improved, and petrochemical inventory has been effectively digested, providing upward support for the market in the middle and second half of the year.
Post time: Mar-04-2024