Plastics: Weak market activity; PVC prices remain stable at low levels

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Plastics: Weak market activity; PVC prices remain stable at low levels. February 23, 2017. I. Overview of upstream raw materials: International crude oil: The market expects U.S. crude oil inventories to continue to reach record highs, leading to a decline in crude oil futures prices in Europe and the United States. However, API data showed that U.S. crude oil inventories dropped unexpectedly last week, and the decline in international oil prices narrowed toward the end of the trading day. Unit: USD per barrel. Region: February 21, February 22; Change: WTI 54.06 → 53.59, change of -0.74; Brent 56.66 → 55.84, change of -0.82. Asian ethylene: As prices of ethylene in Northeast Asia have risen to their highest level in 20 months, downstream profits are under pressure. Meanwhile, the prices of related products such as styrene, polyethylene, and PVC are declining, which increases the difficulties in selling ethylene at high prices in Asia. On the other hand, given the relatively balanced overall supply and demand for ethylene in Asia, the risk of a sharp drop is low; rather, there is likely to be only a slight adjustment. Unit: USD/ton. Regional price levels as of February 21 and February 22; changes in prices: Northeast Asia – CFR 1384.5–1386.5, unchanged from 1384.5–1386.5; Southeast Asia – CFR 1149.5–1151.5, unchanged from 1149.5–1151.5.

II. Petrochemical prices (unit: RMB/ton): Domestic regions and product specifications; prices as of February 22 and February 23; changes in prices: CNPC North China – HDPE strand 5000S: 10,450 RMB/ton on February 22, 10,350–10,400 RMB/ton on February 23; HDPE film 8008: 10,900 RMB/ton on February 22, 10,800–10,900 RMB/ton on February 23; LDPE film 2426H: 10,800 RMB/ton on February 22, 10,500–10,800 RMB/ton on February 23; LLDPE film 7042: 9,950 RMB/ton on February 22, 9,850–9,950 RMB/ton on February 23. CNPC East China – HDPE strand 5000S: 10,450 RMB/ton on February 22, 10,450 RMB/ton on February 23; HDPE film 9455F: 11,020 RMB/ton on February 22, 10,200 RMB/ton on February 23; LDPE film 2426H: 10,900 RMB/ton on February 22, 10,900 RMB/ton on February 23; LLDPE film 7042: 9,800 RMB/ton on February 22, 9,800 RMB/ton on February 23. CNPC South China – HDPE strand 5000S: 10,750 RMB/ton on February 22, 10,650–10,700 RMB/ton on February 23; HDPE film 8008: 10,700 RMB/ton on February 22, 10,800–10,900 RMB/ton on February 23; LDPE film 2426H: 11,000 RMB/ton on February 22, 10,700–10,800 RMB/ton on February 23; LLDPE film 7042: 10,000 RMB/ton on February 22, 10,900–11,000 RMB/ton on February 23.

III. Market commentary and forecasts: 1. PE market in the RMB zone: Today, PE prices continued to decline. In various regions, some linear products saw price drops of 50–100 RMB/ton, while some high-pressure products experienced drops of 50–300 RMB/ton. Individual low-pressure products also saw price reductions of 50–100 RMB/ton. In the mainstream market, the price of LLDPE is 9,750–10,050 yuan per ton, LDPE costs 10,900–11,300 yuan per ton, while HDPE film material is priced at 10,200–10,500 yuan per ton. (Unit: yuan/ton) Regional product prices on February 22 and February 23 – Changes in price. North China: HDPE filament, 10,400–10,450; 10,100–10,350, a decrease of 200. HDPE film, 10,100–10,400; 10,250–10,400, an increase of 75. LDPE film, 10,650–10,850; 10,550–10,750, a decrease of 100. LLDPE film, 9,750–9,900; 9,700–9,850, a decrease of 50. East China: HDPE filament, 10,200–10,550; 10,250–10,500, no change. HDPE film, 10,250–10,550; 10,200–10,500, a decrease of 50. LDPE film, 10,650–11,000; 10,500–11,000, an increase of 75. LLDPE film, 9,850–9,900; 9,700–10,100, an increase of 25. South China: HDPE filament, 10,200–10,600; 10,300–10,700, an increase of 100. HDPE film, 10,300–10,700; 10,150–10,500, a decrease of 175. LDPE film, 10,850–10,900; 10,600–10,800, a decrease of 125. LLDPE film, 9,900–10,050; 9,850–9,950, a decrease of 75. Future outlook: International oil prices have stopped rising and are now falling. Linear polymer futures opened lower and continued to decline. Some petrochemical companies have further reduced their export prices. Market activity is weak, and sentiment is pessimistic. Most sellers are following the downward trend, offering lower prices. The downstream market is weak; adopt a cautious approach. Recently, petrochemical inventories have been high, and it will take time for the market to absorb them. Multiple indicators in futures market prices are oversold, while the spot market continues to withstand pressure. Given that previous demand growth fell short of expectations and inventory levels continued to rise, it is expected that PE market prices will continue to decline slightly. 2. US dollar market (prices in the free trade zone, unit: dollars per ton) Specification/Model February 22 February 23 Change HDPE film 6888 1205 12050 HDPE drawn film T101 200 12000 LDPE FD047 41350 13500 LLDPE 218WJ 1210 12100 Today, the price of PE in US dollars has seen a downward adjustment; market sentiment is negative, and suppliers are offering prices 10-20 dollars per ton lower. Recent sluggish shipments have dampened market confidence, leading some to try lowering prices. Demand picks up downstream in the low-pressure area, with moderate trading activity. As downstream demand gradually recovers, the mainstream grades in the US dollar market remain strong; the linear price is expected to range between 1,160 and 1,200 USD/ton tomorrow. (Excerpted from China Chemical Products Network)