China Market Reports 30 July 2017

Chine PE Market Forecast
Supply: The maintenance of China’s PE units gradually ended by the end of July. The supply was gradually recovered. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 300kt/a LLDPE unit at Zhongtian Hechuang Energy was shutdown. The 270kt/a LDPE unit at Shenhua Xinjiang Energy keeps in maintenance. The expected decreases in supply will be 12kt next week. The import volume in the next week is expected to be stable. From the yearly trend, the import volume is now at a low level.

Demand: In terms of the agricultural film, the demand rose slowly. The operating rates at film factories inched up amid more orders. But the factories purchased based on needs amid the cautious attitude, giving limited support to the market.

To sum up, the upstream crude oil market moved upwards, strengthening the confidence of market players. In terms of the spot PE supply, the PE units gradually resumed production, and the imports remained stable. Thus, the market total supply saw an increase. In terms of the demand side, the speculation demand was limited. Most downstream factories purchased based on needs due to the unclear market outlook and the ample supply. In the futures market, the futures prices slipped back this week after boosted by the news last week. In the short run, the futures prices may continue the downtrend. Based on experts forecasts, The Chinese PE market will keep volatile next week. The ex-works prices at petrochemical companies should be focused. The Chinese mainstream LLDPE prices will be RMB 9,300-9,700/mt next week.

China SM Market Forecast

The styrene stocks as the main ports of East China will probably stop decreasing with imports arriving next week.
The sluggish demand is likely to continue given the environmental protection inspection and the hot weather. On the whole, the styrene market in Jiangsu will lose ground next week.
However, the stocks at the main ports of East China are at a low level. The tight spot supply will restrict the downward space of the styrene market.

China Methanol Market Forecast

For the inland methanol market, the methanol supply in the major producing areas is relatively stable, and some olefin plants are maintaining normal purchases. However, the purchasing interest from most traditional downstream plants is low, influenced by the environmental protection inspection.
On the whole, could be considered that the inland methanol market will be largely stable next week, but the downward pressure still exists. The prices are estimated in the range of RMB 2,140–2,230/mt in Shandong and RMB 1,950–1,970/mt in Inner Mongolia.
In the coastal areas, short positions are dominant in the near term. The support from limited merchantable resources and demand side is weak, so the consumption of inventories is extremely slow. The price gains accumulated in H1 July have disappeared within one week. It is predicted that the coastal market will continue to slip next week, and RMB 2,340–2,350/mt may be a support level.

Jul 31, 2017 12:04
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