1.Price Trend
This week (8.26-8.30) polyethylene showed a continued decline, in which the average price of LDPE 2426H in East China monitored by SunSirs was about RMB 8225/ton; the average price of HDPE 5000S was about RMB 8316.67/ton; and the average price of LLDPE 7042 was about RMB 7333.33/ton. As of August 30, the price of HDPE in East China showed a steady trend this week, and the prices of LDPE and LLDPE showed a continuous downward trend this week. Linear futures continued to decline this week, falling sharply on the 29th, with 01 positions hitting a record high, closing at 1011,980,000 hands, and prices hit a new low in the past decade, which significantly depressed the mindset of the operators. At the end of the month, the market cleared warehouses actively and digested stocks. Businessmen had a pessimistic mentality. Although Petrochemical had a strong intention to bid up at the end of the month, part of the supply chain was tighter, and the mindset of the traders was pessimistic. The downstream factories are mainly in need of goods. It is difficult to deal in the spot market and the trading atmosphere is weak.
2.Cause analysis
Upstream: Oil prices rose steadily this week, OPEC's implementation effect was obvious, the U.S. crude oil inventory fell more than expected is the main positive factor, but market worries about trade risks and U.S. crude oil production to maintain a high level to the oil market negative. On Monday (August 26), the October futures settlement price of WTI crude oil was $53.64 per barrel, down $0.53 from the previous trading day, trading range of $52.98-55.25; the October futures settlement price of Brent crude oil was $58.70 per barrel, down $0.64 from the previous trading day, trading range of $58.24-60.17. On Thursday (August 29), the October futures settlement price of WTI crude oil was $56.71 a barrel, up $0.93 from the previous trading day, trading range of $55.43-56.89; the October futures settlement price of Brent crude oil was $61.08 a barrel, up $0.59 from the previous trading day, trading range of $59.98-61.19.
Import and Export: In July 2019, PE imported about 1.3924 million tons. Among them, LLDPE imports 452,400 tons; HDPE imports 654,000 tons; LDPE imports 286,000 tons, and PE exports in July 2019 totaled 286,600 tons.
Manufacturer dynamics: PE agricultural film demand growth this week is slow, start-up is still at a low level, the overall start-up rate of enterprises is about 3-40%, start-up slightly increased. The overall start-up rate of large and medium-sized plastic film enterprises is about 3-7%, some small and medium-sized enterprises produce in stages, the demand for plastic film has been followed up slightly, some large factories maintain low production, the start-up rate varies from 1-50%, and other plastic film enterprises shut down mainly.
Futures trend: According to the monitoring of business associations, on August 30, polyethylene futures L2001 main contract opening price RMB 7080, the highest price RMB 7140, the lowest price RMB 7055, the closing price RMB 7135, the pre-settlement price RMB 7140, the settlement price RMB 7100, down 5, 0.07%, turnover 627158, position 974928, daily increment warehouse-36170. (Quote unit: yuan/ton)
Industry: According to the price monitoring of business associations, there are five kinds of commodities in the rising and falling list of commodity prices in the 33rd week of 2019 (8.19-8.23). The top three commodities are ABS (1.57%), PS (1.41%) and PC (1.24%). There are 10 kinds of products with ring-to-ring ratio declining. The products with the first three declining ranges are cis-butadiene rubber (-2.27%), styrene-butadiene rubber (-1.85%) and natural rubber (-1.29%). Average gains and losses this week were -0.28%.
3.Future Market Forecast
Looking forward to the future market, SunSirs analysts believe that the current international oil prices continue to rise, which has a certain support for the market. Petrochemical stocks continued to fall, and some of the plant manufacturers are still in a state of repair, to a certain extent, alleviate supply pressure. The downstream peak season starts slowly, but the reserve potential still exists, and there is a certain recovery space for later demand. However, linear futures have fallen successively to a new low, which has obviously depressed the operators. It is expected that the future market will be dominated by short-term or weak consolidation.