Chine PE Market Forecast
Supply: The market supply was sufficient as a whole in recently, except for few grades. Less turnarounds will be newly added next week. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical keep in maintenance. The 300kt/a LLDPE unit at Zhongtian Hechuang Energy was shutdown. The 270kt/a LDPE unit at Shenhua Xinjiang Energy keep in maintenance. The 50kt/a PE Line 1 at Sinopec Shanghai Petrochemical will start maintenance from Aug 13, and its 250kt/a HDPE will be maintained from Aug 15. The 110kt/a and 250kt/a HDPE units at Sinopec Maoming Company was shut temporary this week, and planned to restart next week. The expected decreases in supply will be 23kt next week. The import volume in the next week is expected to rise; the goods to be arrived are mainly HDPE sources.
Demand: In terms of the agricultural film, the demand continued to rise. The operating rates at film factories were limited by the environmental protection inspections. The factories purchased based on needs amid the cautious attitude.
To sum up, the upstream crude oil market was filled with downside risks, putting some pressure on the spot PE market. On the supply side, the overall market supply was sufficient. But the PE heavy bags and tubes in some areas were in short supply. The import volume remained high. On the demand side, the strict environmental protection inspections in North China will continued to limit the production of downstream factories, dragging down the buying interests. The environmental protection inspections in East China, South China and Southwest China will begin in succession. The Chinese PE market will move sideways. The mainstream LLDPE prices will be RMB 9,450-9,900/mt.
China SM Market Forecast
The styrene stocks at the main ports of East China will probably increase next week with shipments from the U.S. and Iran arriving. The insensitive purchases from traders may come to an end. Positive factors triggering this round of rises will gradually weaken. The styrene market price in Jiangsu will probably fluctuate at highs next week.
China Methanol Market Forecast
In the major producing areas, the methanol production is stable, but the inventory level is not high, as the methanol resources are basically supplied to local olefin plants. For other inland areas, the methanol supply from Northwest China declines and the transportation vehicles are also limited. With the methanol producers raising offers, the mainstream negotiation prices keep rising. It is predicted that the methanol prices in Northwest China may still have small upward potentials next week. However, some downstream plants under the environmental protection pressure will just maintain basic purchases. The overall trading can hardly improve a lot. The prices are estimated in the range of RMB 2,270-2,320/mt in Shandong and RMB 2,010-2,120/mt in Inner Mongolia.
In the coastal areas, the methanol resources are concentrated at a few suppliers, and the speculation continues to support the market sentiment. In the near term, the market is still under bullish expectation. However, the trading may be tepid. The players should pay attention to the price level of RMB 2,520-2,530/mt.