During the Spring Festival of 2024, international crude oil continued to rise due to the tense situation in the Middle East. On February 16, Brent crude oil reached $83.47 per barrel, and the cost faced strong support from the PE market. After the Spring Festival, there was a willingness from all parties to raise prices, and PE is expected to usher in a good start. During the Spring Festival, data from various sectors in China improved, and consumer markets in various regions heated up during the holiday period. The Spring Festival economy was "hot and hot", and the prosperity of market supply and demand reflected the continuous recovery and improvement of the Chinese economy.
The cost support is strong, and driven by the hot and bustling holiday economy in China, the PE market will have a good start after the holiday. It will open on Monday (February 19), with a high possibility of market uplift. However, in the situation of high inventory and no resumption of downstream operations, further observation is needed to determine whether transactions can follow up. Firstly, domestic inventory data is high, with two oil inventories of 990000 tons on February 18th, accumulating 415000 tons compared to before the holiday and 150000 tons compared to the same period last year (840000 tons). Secondly, the downstream commencement before the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) Festival cannot be fully restored temporarily, and the downstream commencement will be improved after the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) Festival. Anyway, 2024 is the "Consumption Promotion Year" determined by the Ministry of Commerce, and various regions are also offering "real gold and silver" to promote consumption. PE products are closely related to life and production, and it is expected that demand will be promoted to a certain extent.
As of February 18, 2024, the domestic linear mainstream is priced at 8100-8400 yuan/ton, high-pressure ordinary membrane materials are priced at 8950-9200 yuan/ton, and low-pressure products are priced at 7700-8200 yuan/ton. In terms of price, there is room for improvement in the market, but with high domestic inventory and relatively flat demand, there may not be much room for improvement in the market. Pay attention to the situation of market destocking. With the arrival of the Two Sessions in March, the expected policies related to maintaining growth are likely to increase, and the relationship between China and the United States has eased to some extent. Policies and external events are more positive. Considering the Spring Festival holiday in February and the accumulation of social inventory, the amount of resources that need to be digested from February to March will increase, suppressing the upward trend of the market. It is expected that the market trend will be stronger but the extent is limited, and all parties will still actively reduce inventory. If the actual demand increase is not followed up well, there is still a possibility of a downward trend in the market.
Post time: Feb-21-2024