2021 China PE Market Price Forecast
Preface: Whether the pandemic can be effectively controlled in 2021 is uncertain, and international trade frictions are difficult to eliminate in the short term. Therefore, how the global economy develops in the post-pandemic era is full of variables. For China’s PE market, macro-economy and news impacts are mostly short-term. In the medium and long term, supply and demand fundamentals continue to be the dominant factors.
In 2020, under the influence of the pandemic, the economic growth of the major economies in the world dropped significantly. Although various countries have adopted loose monetary policy, the economies of major countries still declined obviously. The PMI of major countries in the world dropped sharply in Q1. It continued to improve under policy stimulus, but it has not yet returned to the level before the public health events outbreak. In the international market, U.S. stocks, U.S. dollar index, international crude oil and various economic data abnormalities will cause the financial market to vibrate, and then affect the trading decisions of relevant product practitioners.
In the short term, PE industry policies in 2021 are mainly related to the plastic restriction and plastic ban, which mainly affects the PE packaging and small injection molding fields. The impact on the overall PE consumption trend will be limited considering that the PE consumption in these fields accounts for only 8% of the total. Therefore, in 2021, China’s PE market prices will be mainly guided by three factors: cost, supply and demand. On the cost side, crude oil market prices are expected to go up in 2021. The mainstream price will move up at a slow pace on the relatively slow demand recovery in H1 of 2021, with the possibility of fluctuations due to repeated public health events. In H2 of 2021, especially in Q3, the peak demand season in the U.S., coupled with the steady recovery of the economy, will facilitate the mainstream crude oil price to see a larger upward movement. In Q4, the price may fall back a little. In terms of WTI, it is predicted to fluctuate at $45-55/bbl in 2021. However, considering the diversified development of feedstock, short-term changes in crude oil prices will have a limited impact on PE prices, but they will affect the overall trend of China’s PE prices on the whole.
