PE Downstream Producers Gradually Resumed Production
As the public health event is getting contained in China, numerous enterprises resumed work and production in an orderly manner, and the Chinese government provided related policies to ensure the benefits of enterprises. The new policies include cutting taxes and fees, and waiving all road tolls across the country, in order to boost production resumption and support enterprises.
Next week, the PE’s downstream producers will return to work gradually, with downstream operating rates keeping increasing. According to SCI, at present, there were many downstream producers returning to work, but the operating rates were 40%-50%. Influenced by stagnant logistics and other factors, the downstream demand from pipe industry did not recover, with the operating rate of less than 30%. The operating rate of injection industry was around 80%, but the actual operating rate of their production line was around 50%. The operating rate of the agricultural film industry was relatively low. Affected by the rigid demand, most mulching film producers resumed work and production, while the greenhouse film producers resumed work slowly. Some mulching film producers in Northwest China resumed work already, and the operating rate was above 60%. Most mulching film producers in North China, Hebei Province and Shandong Province resumed work already, and the operating rate was around 30%-40%, and the operating rates of mulching film producers were relatively low.
The operating rate was relatively high in East China, with the operating rates of HDPE wrapping film and pipe were 60% and 30% respectively.
The downstream operating rates in North China were relatively low. The mulching film entered the peak season, so the operating rate was above 50%. Due to the decreasing market demand, the operating rate of greenhouse film was less than 30%.
In South China, the overall operating rates were around 50%-60%. The employees from other areas take a pretty large proportion of the total employees in many enterprises in South China, and the employees cannot return to work due to the transportation restriction. Thus, the operating rates of enterprises were relatively low. For example, the downstream operating rates of producers in Dongguan city were 30%-40%, with tepid market demand. The operating rate is predicted to improve in March.
In general, the downstream producers resumed work and production gradually, which boosted the spot market. Impelled by some increasing demand, the market trading atmosphere was relatively bullish this week. The inventory at petrochemical companies was consumed faster than before, mainly supported by the traders’ procurement and rigid demand.
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