China HDPE Low MI Injection Supply to Fall in H2 Apr
The production ratio of HDPE low MI injection at China’s producers was at a medium level, and mainstream prices were RMB 7,700-8,200/mt, staying at a low level among all HDPE products. It’s estimated that the supply of HDPE low MI injection in China will decline, while downstream replenishments will be limited amid a cautious sentiment. Therefore, the price may fluctuate within a narrow range.
According to SCI, the production ratio of HDPE low MI injection at China’s producers was 4.93%, staying at medium level. Currently, PetroChina Fushun Petrochemical was in the production of special materials FHP5050 for bottle caps, Fujian Refining & Petrochemical produced grade 75056, and PetroChina Guangdong Petrochemical and Sinopec Hainan Refining & Chemical were in production of grade 7260. The production of HDPE low MI injection was mainly in South China, and other areas focused on the production of HDPE pipe, small blow molding, film and LLDPE film.
The production ratio was not at a high level because PetroChina Guangdong Petrochemical, Sinopec Hainan Refining & Chemical and Shandong Jinhai Chemical focused on the production of 7260 after their newly added capacity was put into production in Q1. The prices of new products were at a low level, and that of HDPE low MI injection was lower compared with other products, and so was its profit.
Affected by the commissioning of newly added units, most producers reduced the production of HDPE low MI injection. Both PetroChina Guangdong Petrochemical and Sinopec Hainan Refining and Chemical were in South China, with a total of newly added capacity of 1,100kt/a. Therefore, the lowest price was seen in South China. The newly added 400kt/a capacity at Shandong Jinhai Chemical dragged down the local prices as well. No newly added units were seen in East China, so resources from other areas flowed into East China with certain transportation fees. Therefore, the price of HDPE low MI injection was highest in East China among all these three regions.
As for the production arrangement of HDPE low MI injection in China, PetroChina Guangdong Petrochemical will switch to produce HDPE film, and Sinopec Hainan Refining & Chemical and Fujian Refining & Petrochemical will also switch their production to other products. Although PetroChina Fushun Petrochemical plans to continue the production of FHP5050, while the impact on the market will be limited as it’s a special material for bottle cap. It’s estimated that the production ratio of HDPE low MI injection will gradually drop in H2 of April. As for imported resources, the inventory will stay at a low level and market prices will stay at highs amid limited supply. On the whole, the declined supply will give certain support to the price. As for the demand, downstream operating rates are gradually improving after the Spring Festival, so certain end demand will be seen. However, the inventory of finished products at downstream enterprises is consumed slowly, and they mainly purchase on a need-to basis in small orders due to previous replenishments. Therefore, SCI reckons that the price of HDPE low MI injection products will fluctuate within in a narrow range.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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