China Agricultural Film Prices See Limited Fluctuations Amid High Feedstock Prices
Market Review
PE Market Review
As of May 22, the mainstream prices of PE were mixed on a month-on-month basis. Taking East China as an example, the price of LLDPE film grew by 1.76% M-O-M, and that of LDPE film rose by 5.03% M-O-M. In terms of supply, the supply of general-purpose materials at the beginning of the month was limited, so prices of some products stayed high on tight supply. However, prices edged lower on rising supply with the unit maintenance coming to an end. Afterwards, the prices rebounded again amid rising futures prices stimulated by positive macro policies. On the demand side, downstream users showed resistance against the continuous rise in feedstock prices. Additionally, users cut operating rates given insufficient orders, showing thin interest in buying. Deals were mainly done based on low-priced resources.
Agricultural Film Market Review
As of May 22, the mainstream price of agricultural film saw limited increment. Taking North China market as an example, the mainstream price for PE drip-free & anti-aging films remained at RMB 9,800-10,200/mt, rising by 1.01% month-on-month. The mainstream price of mulching films remained stable at RMB 8,800-9,200/mt, steady month-on-month, but up 1.12% year-on-year. The agricultural film prices mainly kept fluctuating amid the tug of war between rising cost caused by continuous rise in PE and MLLDPE prices and the soft demand amid slack seasons.
Market Forecast
PE Market Forecast
It is expected that the overall supply of PE in May may increase by about 5.85% compared to the previous month. Therein, the supply of LLDPE is expected to decrease by about 3%, while that of LDPE is estimated to grow by about 7%. There may be certain supply pressure. Additionally, the weak performance of the downstream may further reduce acceptance towards the high PE prices. In general, it is anticipated that PE prices may fall in H2 May due to lower-than-expected demand, despite of the previously firm prices backed by high futures prices.
Agricultural Film Market Forecast
It is expected that there will likely be limited changes in the agricultural film prices in May. The demand for agricultural film is likely to stay limited, with PE prices maintaining high. Although some distributors, driven by the mentality of "buying on the rise and not on the fall," intend to stock up during the off-season, the purchasing volume is estimated to be limited. As a whole, the agricultural film market price is expected to remain stable in May.
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