LLDPE (7042) had an average price of 8471 yuan/ton on August 18th and 8550 yuan/ton on August 25th, an increase of 0.92%. LDPE (2426H) had an average price of 10533 yuan/ton on August 18th and 10733 yuan/ton on August 25th, an increase of 1.90%. HDPE (5000S) had an average price of 10550 yuan/ton on August 18th and 10650 yuan/ton on August 25th, an increase of 0.95%.
Multiple sets of polyethylene plants in China have undergone centralized maintenance, resulting in a decline in overall production and a short-term contraction in domestic supply. The inventory of petrochemical plants remains low, and the spot market is supported. But the maintenance equipment will be restarted gradually in September, and the production will return in the later stage, and the supply pressure will reappear.
The market is in a phase of transition between peak and off peak seasons, with overall downstream production maintaining a low level, mainly focused on on-demand procurement for essential needs. The gradual entry of agricultural film into the stocking cycle has brought certain expectations of peak season, but the actual order release pace is relatively slow. Downstream acceptance of high priced raw materials is limited, and there is a lack of proactive replenishment, making it difficult for demand to drive prices up significantly.
Geopolitical factors have pushed up crude oil prices, resulting in increased costs of raw materials for oil to PE production, providing bottom support for the market and compressing processing profits for oil companies. The coal production route has stable coal prices and little change in costs.
The current market is driven by the tight balance of spot goods brought about by maintenance and the increase in costs, but the actual demand is relatively weak. Short term maintenance is not yet completed, and costs still have support, with the market mainly fluctuating at high levels.
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