Apr East China LLDPE Price Fluctuated Limitedly
In April, the LLDPE film price in East China fluctuated within a narrow range of RMB 8,150-8,550/mt. The average price was RMB 8,340.26/mt, up 0.50% M-O-M but down 9.06% Y-O-Y.
The price inched down from a high level in H1, and the main reasons are listed as follows. 1. The price of crude oil rose greatly from lows due to the production reduction in Middle Eastern countries, giving certain support from the cost side. However, the crude oil price started to fall afterward from highs, dampening the market sentiment. 2. The futures prices declined first and then fluctuated upwards, but finally fell again. 3. In early April, the downstream demand changed limitedly from March, giving certain support to the market, while it gradually weakened later. On the whole, from April, the demand from downstream industries dropped from March. Therein, the demand for mulch film came to an end, and orders improved slowly. The operating rate declined M-O-M, dragging down the demand for PE. The demand for greenhouse film was tepid, and orders were limited, giving thin support to the market sentiment from the demand side.
However, the price rebounded slightly in H2, mainly due to the following reasons. 1. The futures prices remained robust in H2 April, giving certain support to the spot price. 2. The output loss due to unit maintenance in April was 269.8kt, down 12.7kt or 4.50% M-O-M. However, intensive unit maintenance was seen in H2, so the spot supply declined notably, giving certain support to the market. On the whole, the LLDPE price in East China fluctuated within a narrow range in April.
Major ports such as Ningbo Port and Shanghai Port are located in East China, providing convenience to the imported resources. Therefore, imported resources exerted certain impacts on the East China market. In March 2023, the price trends of imported LLDPE and domestic LLDPE were similar, both increasing first, then declining and rebounding slightly. The domestic LLDPE price was higher than the imported one in April, and the price spread kept rising. This was because the demand in South Asia and Southeast Asia declined slightly affected by Ramadan and the Water-Sprinkling Festival. In addition, as China’s domestic PE demand was in a slack season, downstream orders were limited. Most traders cut their offers slightly to promote sales, so overseas PE prices saw a larger decline. However, China’s domestic LLDPE price was relatively robust affected by multiple factors. Therefore, the price spread between China’s domestic LLDPE price and imported LLDPE price turned from negative to positive in April.
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