China Low MI Injection HDPE Production Ratio Declined amid Newly Added Capacity
Recently, the production ratio of low MI injection HDPE declined notably at producers from around 6% in early January to 1.05%. The mainstream prices were RMB 7,750-8,000/mt, which were at a low level among various HDPE products. In H2 February, it’s estimated that China’s supply of low MI injection may trend down and the price may fluctuate at highs.
The production ratio declined because the price of low MI injection was lower compared with other products. Producers maintained normal production during the Spring Festival, so the market supply was ample after the holiday. In addition, the newly added capacity at PetroChina Guangdong Petrochemical and Sinopec Hainan Refining and Chemical will come online soon. The newly added capacity is of large scale and is planned to be started with the production of low MI injection.
Affected by the upcoming commissioning of newly added capacity, most producers reduced or suspended supply of low MI injection to South China in advance. However, the commissioning of newly added capacity was delayed, leading to the supply shortage of low MI injection in South China. Currently, the mainstream prices were RMB 7,750-8,000/mt. Prices of low MI injection in North China and East China were at the lowest level among various HDPE products, while those in South China were at a highest level among the three regions due to tight supply there.
In H2 February, the supply of Chinese-made low MI injection will gradually decline due to the delay commissioning of newly added units at PetroChina Guangdong Petrochemical and Sinopec Hainan Refining and Chemical and falling production ratio. Therefore, the market price may stay at a high level. As for the demand, with downstream operating rates improving, the end demand will increase. On the whole, it’s estimated that the price of low MI injection HDPE will fluctuate at highs in H2 February.
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