HDPE Low MI Injection Supply to Decline in H2 May
Recently, the production ratio of HDPE low MI injection was at a relatively low level with merely Ningxia Baofeng Energy in production of 6081H. The mainstream prices were RMB 7,600-8,000/mt, which were at a low level among all HDPE products. In H2 May, it’s estimated that China’s HDPE low MI injection supply will likely trend down, while downstream orders may be limited as operating rates will decline amid tepid buying appetites. Therefore, the price may fluctuate downwards.
According to SCI, the production ratio of HDPE low MI injection of China’s producers was at a low level at 0.97%, down almost 5% from April. Currently, only Ningxia Baofeng Energy was in production of 6981H, while no production of HDPE low MI injection was seen at other producers. Most focused on the production of HDPE pipe, HDPE film and LLDPE film.
The low production enthusiasm was caused by the newly added units at PetroChina Guangdong Petrochemical, Sinopec Hainan Refining & Chemical and Shandong Jinhai Chemical put into production in Q1. They started up with the production of grade 7260 and the price was at low level when the products came into the market. Although these three enterprises switched production to other products, while their previous products haven’t been consumed yet. Therefore, other producers showed tepid production positivity for HDPE low MI injection.
Affected by the newly added units, most producers lowered their production of HDPE low MI injection. As PetroChina Guangdong Petrochemical and Sinopec Hainan Petrochemical were in South China, and prices of their new products were low after first launch into the market, the lowest price of HDPE low MI injection was seen in South China. As for East China, no producers there arranged production of HDPE low MI injection, so the price there was at a highest level among South China, East China and North China.
After PetroChina Guangdong Petrochemical, Sinope Hainan Refining & Chemical and Shandong Jinhai Chemical were in normal production, they switched the production to other HDPE products. Production arrangements of HDPE low MI injection are rarely seen from other producers. Therefore, it’s estimated that the production ratio of HDPE low MI injection will stay at a low level in H2 May. Meanwhile, the supply of imported resources will change limitedly. On the whole, the overall supply will likely decline, which may give certain support to the price. As for the demand, the operating rate of the injection industry will decline amid the traditional demand slack season, and orders will be limited. Most downstream users will consume the inventory of finished products and purchase on a need-to basis with tepid buying appetites. Therefore, SCI reckons that the price of HDPE low MI injection products will likely fluctuate downwards in H2 May.
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