Polyethylene spot small rise continued to rebound sharply or will be difficult to achieve

After the Lunar New Year, the domestic polyethylene spot market ushered in a late spring cold. Under the dual effects of slow demand start-up and high market inventory, the market experienced a consolidation in February. The market began to decline all the way in March. It was not until mid-to-late March that the market showed signs of rebound. According to the monitoring of the Business News, LLDPE rebounded by 1.33 from March 18 to now, and the current market mainstream price is 10850-10850-10950 yuan/ton.

Specifically, this rebound is mainly affected by the following aspects: 1. crude oil met with obvious support at US $92 and is still operating at a high level. The ethylene markets in Europe, America and Asia have stopped falling and stabilized. Asian ethylene has rebounded slightly, bringing certain benefits to the downstream polyethylene cost. At present, 2. petrochemical manufacturers have significantly increased their maintenance equipment. Although the inventory pressure is still high, the petrochemical inventory has gradually decreased compared with February, in East China, polyethylene petrochemical stocks dropped significantly, with high-pressure stocks falling by nearly 1,500 tons, or 22%, and linear stocks falling by more than 1,000 tons, or 10.7 percent. Therefore, petrochemicals began to raise ex-factory prices one after another, generally by 100-200 yuan/ton since the middle of the month. The 3. futures market rebounded strongly, forming a certain boosting effect on the spot market. The contradiction between supply and demand in 4. eased and the operating rate of downstream manufacturers increased slightly, at present, the operating rate reached 5-6 percent, the inventory gradually digested years ago, manufacturers appear to replenish inventory behavior, the north and other areas of agricultural film stocking efforts to further increase.

Can the late polyethylene spot market get rid of the shock pattern and usher in a more decent rally? According to the "2013 Plastic Industry Summit Forum" co-sponsored by Dalian Commodity Exchange and China Chemical Industry Network (Business Society), a subsidiary of Netsun Business Treasure, and hosted by Zheshang Futures, Liu Xintian, editor-in-chief of the Business Society, expressed his own views. He believes that the current domestic plastic spot market is still facing the double suppression of high inventory and low demand. The spring film peak season is contrary to previous years, and this year is late, moreover, downstream membrane material manufacturers generally have a certain inventory, which has also weakened their purchasing efforts. Therefore, there are still some variables as to whether the demand can be really enlarged in the later period, and it is difficult to see a unilateral rise. However, it is expected that the contradiction between supply and demand in the plastic spot market may be further eased as petrochemical enters the peak period of maintenance in April and May. It is expected that the market will usher in a slight recovery, reminding the industry to be cautious view.