SunSirs: China Polyethylene Fluctuates at High Levels in the Short Term; Upward Potential Narrows

According to data from SunSirs, the average price of LLDPE (7042) rose 3.36% from 7,300 RMB/ton on July 3 to 7,545 RMB/ton on July 9. The average price of LDPE (2426H) increased by 8.74%, rising from 9,150 RMB/ton on July 3 to 9,950 RMB/ton on July 9. The average price of HDPE (5000S) rose 2.93%, moving from 9,812 RMB/ton on July 3 to 10,100 RMB/ton on July 9.

International crude oil prices have trended upward amidst geopolitical volatility, providing a price floor for polyethylene and driving up both futures and spot prices.

Several units undergoing maintenance have yet to fully restart, and delays in port arrivals have tightened spot supplies, prompting petrochemical producers to maintain firm pricing. Industry inventories remain low and are continuing to decline; this easing of inventory pressure provides stable price support.

The market is currently in a traditional off-season for demand; operating rates for agricultural film, piping, and injection molding remain low, and there is no significant wave of restocking by end-users. While demand for packaging remains steady—bolstered by some restocking of raw materials at lower price points—this has only led to a slight recovery in demand. However, downstream resistance to high prices is evident, with buyers purchasing only what is immediately needed; the lack of sustained buying interest has caused prices to stall at high levels, limiting further upward potential.

In the short term, with maintenance units not yet fully back online, low inventory levels and crude oil costs provide a price floor, and producers remain committed to firm pricing, making a deep price correction unlikely. However, as end-users are in a demand off-season, downstream sectors resist high prices and limit purchases to immediate needs, resulting in a lack of sustained buying momentum. Overall, polyethylene prices are expected to fluctuate within a narrow range at high levels, lacking the impetus for a significant, sustained rally.

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