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China PE Spot Prices Showed a Gradual Decline in October

October 31, 2023

Latest company news about China PE Spot Prices Showed a Gradual Decline in October

During the one month period since the Double Holiday, the plastic industry has been dominated by bearish trends. On the macro level, the US dollar strengthened in October, and the performance of US economic data was eye-catching. The market is concerned that the Federal Reserve still has expectations of raising interest rates as a result. In terms of cost, due to the strengthening of diplomatic efforts in international geopolitical conflicts, the tension has been partially alleviated. Venezuela's export restrictions have also eased, with expectations of increased market supply and a weakening of crude oil prices due to pressure fluctuations. At the same time, downstream plastic enterprises are not actively willing to stock up, their consumption follow-up is lagging, and the market momentum is weak. Under the influence of declining consumption and cost fluctuations, the price performance of plastic futures has significantly declined.

According to the Commodity Market Analysis System of SunSirs, as of October 26th, the average monthly increase in spot prices of various products, from low to high, is PP (wire drawing) -3.13%, PVC-3.14%, and LLDPE-3.17%.

Since October, polyethylene spot prices have shown a gradual decline. The Commodity Market Analysis System of SunSirs shows that the benchmark price of LLDPE on October 26th was at 8,171.43 RMB/ton, with a decrease of -3.17% within the range. Other models of polyethylene products have also experienced varying degrees of decline. On the cost side, the international crude oil market has fluctuated and fallen, and the support of raw materials for polyethylene has weakened. In order to reduce inventory, petrochemical enterprises have lowered their factory prices, and traders have followed suit. Market demand fell short of expectations during the month, and market procurement was cautious. The demand for agricultural film during the peak season is insufficient, and market procurement revolves around rigid demand. The demand for packaging film during the E-commerce Festival is expected to be positive, but there has been no significant boost in the near future. In order to facilitate transactions, merchants often sell at reduced prices and offer profits to facilitate transactions. In terms of futures, polyethylene 2311 closed at 8,028 on October 26, with a settlement price of 7,963. The market trend was weak and volatile, with no boosting effect on spot prices. The current demand in the PE market is sluggish, and the cost side is weak. It is expected that the market will be mainly weak in the short term.

The spot market of October plastic futures and three materials weakened simultaneously. Macroscopically, the improvement of the external economic environment is limited. In the future, there may be expectations of an increase in crude oil supply, and the cost support effect of plastic far end may decline. At present, the construction of aggregation enterprises is relatively high and stable, and the supply of goods is abundant. The trend of plastic during the peak season has rapidly cooled down, and terminal enterprises are stocking around just in need. In summary, the current bearish outlook for plastic futures is mainly focused on weak costs and lagging demand. It is expected that in the short term, the guidance for the PE and PP plastic markets remains unchanged, and the market may continue to be weak. PVC may have the opportunity to recover due to the boost from futures.

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