Negative concentrated release, polyethylene continues to be under pressure

Recently, the polyethylene market has been under pressure and declining. LLDPE (7042) had an average price of 7806 yuan/ton on June 19th and 7541 yuan/ton on June 24th, a decrease of 3.39%. LDPE (2426H) had an average price of 9650 yuan/ton on June 19th and 9133 yuan/ton on June 24th, a decrease of 5.35%. The average price of HDPE (5000S) on June 19th was 10062 yuan/ton, and on June 24th it was 9782 yuan/ton, a decrease of 2.78%.
Cost side: Raw materials continue to decline. The geopolitical premium has subsided, international crude oil has fallen sharply, the cost center of polyethylene production continues to move downwards, and the ex factory price of petrochemicals and traders have continuously lowered, directly driving the overall decline of spot prices.
Supply side: Overall supply is loose, with only localized structural tightness. Imported goods are concentrated at the port, while external goods continue to flow into the domestic market. Domestic early-stage maintenance equipment has resumed production in a concentrated manner, and the overall operating rate of the industry has steadily rebounded. The overall supply of goods has increased more than decreased, and only some equipment has undergone long-term maintenance, resulting in a local structural shortage of goods, which only slightly alleviates the decline.
Demand side: Traditional off-season in the industry. The production of agricultural film and plastic film has ended, and the autumn greenhouse film has not yet started. The downstream of packaging, injection molding, and pipe materials have entered the off-season synchronously. Downstream order follow-up is weak, adopting a “buy as you go” approach, resulting in a lack of buying opportunities in the market.
Due to the off-season demand, weak support for crude oil costs, and overall loose supply of goods, polyethylene maintains a weak and volatile pattern. The short-term decline rate has slowed down, but it is difficult to see a trend reversal, and the rebound space is limited.