[Lead] : The domestic production enterprise equipment more normal production, supply is expected to increase, the supply side pressure is still there, and with the downstream factories start one after another, the demand side support is enhanced, it is expected that next week polyethylene market price shock adjustment.
I. The normal production of domestic installations is expected to increase
The total output of polyethylene of domestic production enterprises in this cycle is 524,000 tons, slightly reduced compared with the previous cycle, mainly due to the new Qilu Petrochemical and Dushanzi petrochemical plant maintenance. In the next cycle, Shell and Qilu Petrochemical overhaul devices plan to start operation, and most domestic production devices are in normal production. The newly planned overhaul device is only Dushanzi Petrochemical’s 300,000 tons/year new full-density line 1 device. The overhaul loss in the next cycle is estimated to be 27,700 tons, which is 24.73% less than this cycle, and the domestic production supply is expected to increase.
Ii. The import of some overseas equipment maintenance is expected to increase limited
In December 2022, the import volume of polyethylene in China was 1,092,200 tons, down 13.80% from the previous month. The main reason is that the exchange rate of US dollar against RMB in November was high, the import arbitrage space was narrowed, and the willingness of merchants was weakened, so the import source arrived at the port in December decreased. Later, although the exchange rate of US dollar against RMB declined, due to the maintenance of some devices in Southeast Asia and the Middle East, the overall supply was tight, the price of imported goods went up, the import profit decreased, and the import increase was expected to be limited.
Third, the downstream factories have started to increase the demand is expected
This week the capacity utilization rate of the downstream industries of polyethylene was +0.51% compared with last week. Among them, the capacity utilization rate of pipe and packaging film increased significantly compared with last week, and the resumption of other varieties was limited. Most enterprises will resume work after the 15th day of the first month, and the long order period will be extended. Therefore, the utilization rate of polyethylene downstream capacity will be expected to rise next week, and the support of demand end will be enhanced.
On the supply side, the increase of imported resources is limited, while the domestic supply is expected to increase, so the pressure on the supply side remains. In terms of demand, downstream factories have resumed production one after another, and the demand is expected to increase. Besides, after the control of public health events was lifted, the market attitude improved and the demand side support was strengthened. In general, it is expected that the polyethylene market price adjustment mainly shocks.
Post time: Feb-03-2023