What are the highlights of polyethylene’s weak performance in the first half of the year and the market in the second half?

In the first half of 2023, international crude oil prices first rose, then fell, and then fluctuated. At the beginning of the year, due to the high crude oil prices, the production profits of petrochemical enterprises were still mostly negative, and domestic petrochemical production units remained mainly at low loads. As the center of gravity of crude oil prices slowly moves downwards, the domestic device load has increased. Entering the second quarter, the season of concentrated maintenance of domestic polyethylene devices has arrived, and the maintenance of domestic polyethylene devices has gradually started. Especially in June, the concentration of maintenance devices led to a decrease in domestic supply, and the market performance has improved due to this support.

In the second half of the year, demand has gradually started, and demand support has been strengthened compared to the first half. In addition, the production capacity increment in the second half of the year is limited, with only two enterprises and 750000 tons of low-pressure production planned. It is still not ruled out that there is a possibility of further delay in production. However, due to factors such as poor foreign economy and weak consumption, China, as a major global consumer of polyethylene, is expected to increase its import volume in the second half of the year, with overall supply being relatively abundant. The continuous relaxation of domestic economic policies is beneficial for the recovery of downstream production enterprises and consumption levels. It is expected that the high point of prices in the second half of the year will appear in October, and the price performance is expected to be stronger than in the first half of the year.