2023 PE Market Price Trend Forecast
In 2023, hindered by high cost and sluggish demand, only 650kt/a newly added capacity is estimated to be brought online in the year, but as 5,000kt/a newly added capacity was put into operation in 2022, SCI reckons that the output of China-origin PE in 2023 will hike by 10.64% Y-O-Y. The supply of imported PE is estimated to grow by 3%, and the total supply of PE is projected to rise by 7.93% Y-O-Y. The demand for PE is predicted to recover to some extent. The PE export demand and total demand are estimated to rally by 5% and 8.2% Y-O-Y respectively. However, due to the relatively pessimistic macro environment outlook, buyers’ procurement will be hampered, which will also put a damper on PE prices. PE production cost is expected to decline from high levels in 2022, and coupled with plastics ban order and environmental issues, PE industry is predicted to stay in a destocking stage in H1, 2023, and in H2 of the year, against the backdrop of potential stocks replenishment, the prices of PE will be higher than those in H1.
All told, SCI reckons that in 2023, the prices of LLDPE will be RMB 7,500-9,300/mt, and the monthly average prices will be RMB 8,100-8,500/mt, down around 1.3% Y-O-Y. The peak and bottom of monthly average prices are estimated to be RMB 8,200-8,800/mt and RMB 7,700-8,200/mt respectively. From the perspective of seasonality, the price peak is likely to appear in Q1 and Q3. In Q1, some PE producers are likely to run at relatively low operating rates, and combined with limited newly added capacity and anticipated demand recovery after Chinese New Year holiday, the prices of PE will be shored up. In Q3, the PE prices will be underpinned by traditional demand peak season. The annual price bottom is expected to be in Q2 and Q4, which are the traditional demand slack seasons. In addition, with the release of newly added capacity, PE market will face oversupply pressure in Q4.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
