Q4, 2023 Forecast: China PE Price Likely to Trend Down
In Q4, it’s estimated that China’s PE market price will likely fluctuate downwards.
Macro: With China’s economy recovering steadily, it’s expected to be stable-to-rising in Q4.
Cost: Crude oil prices will likely stay at highs, giving strong support to the PE price.
Inventory: some downstream enterprises will see inventory building of feedstock and finished products after the replenishments before the holiday. Meanwhile, the PE inventory is at a high level compared with previous years after the holiday.
Supply: not many unit overhauls will be seen in Q4, so the output loss will stay at a low level. In addition, with the 400kt/a HDPE unit at Ningxia Baofeng Energy Group put into production and the 250kt/a LDPE unit coming online soon, the output will likely trend up in Q4. Although the overall import volume is likely to fall, the overall supply will remain under pressure.
Demand: in October, the demand for the agricultural film will remain in a peak season, and the packaging demand will be boosted by orders for shopping carnivals, Christmas and the Spring Festival. However, downstream users may purchase cautiously based on orders, which will give limited support to the PE market. In addition, new orders are estimated to decline from mid-October, which may weigh down the price. From November to December, with the demand peak season coming to an end, the downstream demand will likely weaken.
Price: On the whole, the demand will continue to support the PE market in October, but the price increment will be curbed by shrinking profits. From November to December, the supply may trend up while the demand is likely to fall, so China’s PE market price will likely fluctuate at highs first and then trend down.
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