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[Industry Focus]：PE price new trends: policy support, market speculation enthusiasm heating up

Read： 449 Time：3months ago Source：金联创

Data source: Jin Lianchuang

review of PE Market in May 1.

In May 2024, the PE market showed a volatile upward trend. Although the demand for agricultural film has declined, downstream rigid demand procurement and macro-level favorable factors have jointly promoted the market's rise. Domestic inflation expectations are heavy, linear futures performance is strong, driving the in stock market quotes to follow the rise. At the same time, due to the overhaul of Dushanzi petrochemical and other devices, the supply of some domestic resources is tight, while the international dollar price continues to rise, and the market speculation awareness is strong, which further promotes the rise of market quotation. As of May 28, the linear mainstream price in North China reached 8520-8680 yuan/ton, while the high-pressure mainstream price was 9950-10100 yuan/ton, both of which reached a two-year high.

Analysis of PE Market Supply in June 2.

In June, the maintenance of domestic PE devices will change. The pre-overhaul devices will be restarted one after another, but Dushanzi Petrochemical is still in the overhaul period, while Zhongtian Hechuang PE device will also enter the overhaul stage. On the whole, the number of maintenance devices will be reduced, and the domestic supply will increase. However, considering the gradual recovery of overseas supply, especially the weakening of demand in India and Southeast Asia, and the gradual recovery of maintenance in the Middle East, it is expected that the amount of overseas imported resources to Hong Kong will increase from June to July. However, due to the substantial increase in sea freight, the rising cost of imported resources and high prices, the impact on the domestic market is limited.

Analysis of PE Market Demand in June 3.

On the demand side, cumulative PE exports fell 0.35 percent year-on-year in January-April 2024, mainly due to higher freight costs that hampered exports. Although June is the traditional off-season for domestic demand, the enthusiasm for market speculation has increased due to the emphasis on domestic inflation expectations and the continuous rise in the previous market. In addition, with the continuous development of a series of macro policies, such as the action plan for promoting large-scale equipment renewal and trade-in of consumer goods issued by the State Council, the issuance arrangement of trillion yuan of ultra long-term special treasury bonds issued by the Ministry of finance, and the central bank's support policies for the real estate market, it is expected to have a positive impact on the recovery and development of China's manufacturing industry and structural optimization, So as to support the demand of PE to a certain extent.

4. market trend forecast

considering the above factors, it is expected that the PE market will show a long-short struggle in June. On the supply side, although the domestic maintenance equipment is reduced and overseas supply is gradually restored, it still takes time for the import resources to be released; on the demand side, although it is in the traditional off-season, with the support of domestic macro policies and the enthusiasm of market speculation, the overall demand will still be supported to some extent. With inflation expectations, most of the country continues to be bullish, but high-priced demand is hesitant to follow suit. Therefore, it is expected that the PE market will continue to fluctuate in June, and the linear mainstream price will fluctuate between 8500-9000 yuan/ton. Under the strong support of petrochemical mismatch maintenance and price willingness, the upward trend of the market has not changed. In particular, high-pressure products are affected by subsequent maintenance, resource supply has a gap support, there is still a willingness to speculate.

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