Chine PE Market Forecast
Supply: There are still few planned overhauls in September. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 270kt/a LDPE unit at Shenhua Xinjiang Energy is planned to be restarted on September 4. The 100kt/a LDPE unit at Sinopec Shanghai Petrochemical parked amid operational reason. The 300kt/a FDPE unit at Shenhua Baotou Coal Chemical will start maintenance on September 4. The 110kt/a LDPE unit at Sinopec Maoming Company is planned to be shut for 3 days. The expected decreases in supply will be 7kt next week. The import volume will keep flat. The import volume of low-end sources will decrease.
Demand: In terms of the agricultural film, the demand rose slowly. The operating rates at film factories were limited by the environmental protection inspections. The factories purchased based on needs amid the cautious attitude.
Overall, the upstream crude oil market kept moving down, providing limited support to PE prices, but it was beneficial to the cost of oil-based polyolefin. On the supply side, the total supply volume is ample. The decreases in supply of LDPE materials amid turnarounds next week will be more than in this week, yet the supply of blow molding and injection materials will be released in succession. The import volume will be stable. With the next month approaching, the ex-works prices of PE will be stable or be uplifted at petrochemical companies. Players should pay attention to the LLDPE futures prices after the prices rise quickly. SCI holds that the Chinese PE prices will fluctuate at highs next week. The mainstream
LLDPE prices will be RMB 9,700-10,300/mt.
China SM Market Forecast
Merchantable spots styrene totaled below 40kt up to August 30, according to SCI statistics. Limited imported shiploads are expected to arrive in the short term. Mainstream traders in East China are faced with tight spot supply and they will continue replenishing stocks. CNOOC and Shell Petrochemical cut the operating rate to change catalyst, further intensifying the tight supply in South China. Styrene stocks at Shandong styrene producers have reduced to a low level. Market will have positive attitude to the styrene next week.
China Methanol Market Forecast
In the major producing areas, the methanol inventory level was stable-to-slipping. In other inland areas, some methanol units were shut down accidentally, and the methanol inventory level was also low. Meanwhile, the demand from olefin plants was steady. However, the operating rates at traditional downstream plants were low due to the inspection on environmental protection and safety production. Thus, the overall methanol trading was average. It is predicted that the methanol prices may continue to rise next week, as the supply is tending tight. But the trading volume can hardly increase a lot.
The prices will be in the range of RMB 2,600-2,750/mt in Shandong and RMB 2,300-2,350/mt in Inner Mongolia next week. In the coastal areas, the sharp rise in futures prices pushed up spot prices, but spot deals were limited due to the downstream resistance to high prices. Considering the tight supply of imported methanol and the firm futures market, it is predicted that local methanol market may adjust at a high level next week, and the prices may be in the range of RMB 2,770-2,810/mt. However, the support from downstream demand is not ideal, so the market may fall back in the long term.