Chine PE Market Forecast
Supply: Less maintenance will be in next week. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical will keep shut. The 100kt/a LDPE unit at Sinopec Shanghai Petrochemical will keep shut. The 300kt/a FDPE unit at Shenhua Baotou Energy will resume production in early October. The 150kt/a PE unit at Shanghai Golden Phillips Petrochemical will keep shut. The expected decreases in supply will be 6kt. The import volume after National Day holiday is expected to increase.
Demand: In terms of the agricultural film, demand from shed plastic film users kept high in peak season. Many factories had finished stocking up ahead of the National Day holiday. So the procurement volume would give less support to the PE market in the short term.
Overall, the upstream crude oil prices kept volatile, giving limited support to the PE market. On the supply side, LLDPE futures prices moved down and factories did less procurement before National Day holiday, so the players held cautious attitude. The total supply in the spot market will abundant with the accumulation of inventory during holiday and the expectation of arrival of imports in H2 of October. From the demand side, the rigid demand will give limited support to the PE prices after holiday. Overall, the PE market will be volatile after National Day holiday, and the PE prices are very likely to move down first and then up. The LLDPE prices will be RMB 9,400-10,150/mt.
China SM Market Forecast
The transportation of styrene will bear little impact from the 19th CPC National Congress. The positive support does not exist anymore. Some downstream producers plan to take turnarounds or cut the operating rates in October. A large amount of styrene imports is expected to arrive during the National Day holiday. Styrene stocks at the main ports of East China will probably rally. The spot styrene market is likely to continue going lower for lack of support. As for the styrene price on Huaxicun Commodity Contracts Exchange, players adopt cautious sentiments with prices falling to such a low.
China Methanol Market Forecast
In the major producing areas, the methanol inventory is at a medium-to-low level, and the demand from olefin plants is fine. Some units are scheduled to undergo maintenance after the National Day holiday, so the methanol supply will decrease. Thus, local methanol prices are still likely to rise slightly. In the other inland areas, the suppliers are selling goods cautiously, considering the high cost. Moreover, the downstream plants may restock after the holiday with the feedstock inventories consumed. Therefore, the prices still have upside potentials. It is predicted that the prices will be in the range of RMB 2,750-2,950/mt in Shandong and RMB 2,550-2,650/mt in Inner Mongolia after the National Day holiday.
In the coastal areas, with the restocking for the holiday coming to an end, the trading atmosphere is stabilizing. At present, local trading is mainly consuming the inventories. It is predicted that the methanol prices in the coastal areas may move sideways in the near term, and the prices will be in the range of 2,700-2,800/mt after the holiday.
China MEG Market Forecast
Total MEG inventory will decrease slightly in Oct, and demand remains firm with restarts of polyester plants.
Currently, operating rate of polyester plants has stand at about 93.1%, and may see slight increase further.
While support from fundamentals weakens as falling commodity prices weigh on market sentiment. Pressure of
increasing polyester product inventories and inventories in end-users may emerge after the holiday. MEG
market is likely to keep weak in short term.