2022 China LDPE Price Fluctuated Downwards
In 2022, China’s LDPE market price fluctuated downwards on the whole, and its price spread with LLDPE gradually narrowed. In Q4, the output losses of LDPE due to unit maintenance will decline notably, so China’s supply will increase. In addition, with low-priced imported resources, the supply will still face pressure, so China’s LDPE market price may continue to trend down.
In 2022, China’s LDPE market price showed an overall downtrend. As of November 14, the average price of LDPE was RMB 9,500/mt, down 13.8% from the beginning of 2022. Meanwhile, the prices spread between LDPE and LLDPE gradually narrowed, falling from RMB 3,160/mt in early 2022 to RMB 1,125/mt, registering a decline of 64.4%. The overseas demand remained sluggish amid the tepid global economy, and foreign producers cut their offers to reduce their inventory. In addition, the growth of end demand slowed down. Affected by multiple factors, China’s LDPE market price moved down notably in 2022, with the price spread between LDPE and LLDPE narrowing.
In November, most LDPE units in China ran steadily, and imported resources arrived at ports intensively, so the supply continued to face pressure. The end demand didn’t see obvious improvements, and the demand for greenhouse films gradually weakened. Downstream users mainly purchased on a need-to basis, giving thin support to the market. On the whole, China’s LDPE market price moved down.
The 400kt/a LDPE unit at Zhejiang Petroleum & Chemical Phase II was put into production in H2 March 2022, and its products was launched in Q2. China’s total LDPE capacity reached 3,635kt/a, and no other LDPE units will come online in the remaining months of 2022.
From January to October 2022, China’s LDPE output was 2,423.6kt, down 1.75% Y-O-Y. In Q4, with less LDPE unit maintenance, the output loss is estimated at 45kt, down 75.12% from Q3. Therefore, it’s estimated that China’s LDPE output will increase notably in Q4.
From January to October, China’s LDPE import volume declined by 4.48% Y-O-Y. It’s estimated that the import volume will gradually fall in Q4, while the low prices of imported resources will exert certain impacts on Chinese-made LDPE.
From January to October 2022, China’s LDPE export volume increased Y-O-Y, while it exerted few impacts on China’s market due to its small amount.
In H1, 2022, the LDPE price in South China was higher than those in North China and East China. However, from H2 July, with the low-priced imported resources arriving intensively at ports in South China, the price in South China declined rapidly. Meanwhile, the LDPE availability in North China was tight due to the LDPE unit maintenance at Sinopec Qilu Petrochemical and PetroChina Lanzhou Petrochemical. Therefore, the price decline pared back in North China.
In November, most LDPE units ran steadily and the output losses declined notably, improving the supply gradually. Meanwhile, the low-priced imported resources arrived at ports intensively in October and November, so the overall supply still faced pressure. In addition, the traditional demand peak season in October and November came to an end, so the demand from greenhouse films in Northeast China and North China gradually weakened. Therefore, the LDPE price in North China declined faster. As for East China, increasing low-priced imported resources dragged down the price of Chinese-made LDPE there. In South China, no obvious changes were seen from the demand side and the price changed limitedly. Currently, the price in East China was close to that in South China, while that in North China was at the lowest level among the three regions.
On the whole, in Q4, China’s LDPE output losses due to maintenance may decline notably, so the output will improve. In addition, the increasing low-priced imported resources will give no relief to China’s market. Therefore, China’s LDPE market price may further move downwards.
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