China PE Market to Be Under Pressure on Demand Slack Season
According to SCI, the Chinese PE market will probably be under pressure with the coming of the demand slack season. On the supply side, the previously overhauled units at Shenhua Baotou and ZPC (Phase II) are planned to be restarted in early May, and newly-added unit maintenance is estimated to be limited. The output loss caused by unit maintenance in May is predicted to be 377.6kt. The Chinese domestic supply is likely to grow. On the cost side, the crude oil prices are estimated to firm after falling, providing some bottom support from the cost side. On the demand side, the operating rate of the agricultural film industry may be cut to a low level during the year given thin demand, yet the operating rates of other industries may stay steady backed by rigid demand. However, profits at downstream producers underperform due to high feedstock prices, so users will likely show thin buying interest and only purchase a small batch of feedstock to cover rigid demand, failing to support the market a lot. In general, the fundamentals may underperform, yet the cost support still exists. In the short term, PE market prices are likely to fluctuate at highs, yet in the medium term, the price may fall amid increasing supply and colling demand.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
