Imported PE market review in H1 2024

In the first half of 2024, the imported PE market showed a slight divergence in trends. LDPE exhibited a strong upward trend, while LLDPE and HDPE film stable-to-higher, with overall price increases being relatively small. The overall PE price experienced fluctuations in the first quarter, but starting in the second quarter, LDPE showed a more pronounced upward momentum.

In early January, the market remained weak, and market transaction for high-price materials was poor. Most trades were done with low price. However, in the middle of the month, RMB futures-spot market markets rose, and the imports arrived were expected to be limited. Supported by some downstream stocking intentions, the CFR China price slightly shifted upward. In the latter part of the month, the market continued to see slight increases, and the RMB appreciated slightly, further raising CFR China prices. However, with the approaching of Chinese New Year at the end of the month, downstream began to take holidays gradually, leading to a slight softening of prices and a decrease in negotiations.

In early February, due to the approaching holiday, most participants were focused on observing the post-holiday market, with only some pre-holiday stocking demand. The overall market was quiet with little negotiation. By mid-February, trading activity came to a standstill. However, during the holiday, crude oil prices surged, prompting traders to raise their offers after the holiday. Nonetheless, the return of downstream participators was relatively slow, resulting in limited actual transactions. As downstream players gradually returned, trading activity began to increase.

In early March, some prices experienced a slight uptrend amid reports of tight supply for forward goods, but traders were not willing sell at lower prices. However, as the RMB futures-spot markets softened, traders had to lower their offers accordingly. By mid-March, the market was characterized by fluctuations, with various grades generally adjusting within a range of $5-10/mt. HDPE film, however, saw its price rise. Toward the end of the month, the market experienced a slight decline, with high-priced transactions lacking momentum and more negotiations occurring at lower price levels.

In April, the overall market fluctuated higher supported by the RMB market, which led to relatively active trading. However, by the end of the month, ChinaPlas was held, with industry participants gradually heading to the venue for discussions primarily focused on business. Market players stood on the sidelines, and some stocked up for the holiday. During the ChinaPlas, it became clear that the subsequent imports arrived would be limited, providing some theoretical support for a potential price increase in the future.

Starting in May, the overall market price shifted upward, particularly for LDPE, where supply was tight and prices rose significantly, providing some support for other products as well.

By June, LDPE market continued to strengthen, while other products faced slight declines due to the weakening RMB futures-spot market. Consequently, the imported PE market showed a divergence in trends among various grades, with downstream demand being generally moderate and primarily driven by essential purchases.

The imported PE market has shown the following characteristics in the first half of this year:

1. LDPE outshines other products in terms of price growth

As previously described in market reports, LDPE has notably outperformed other products in the first half of the year. For example, the price spread between LLDPE and LDPE was generally maintained at around $100yuan/mt in the first quarter, but the spread significantly widened in the second quarter, reaching approximately $230/mt by the end of June. In the first half of 2024, LDPE price rose from a low at the beginning of the year to a high by mid-year, with an increase of about 17.31%, while LLDPE increase during the same period was only about 6%.

2. Overall import and export volumes decreased

According to the customs data, total import volume for the first half of the year reached 6.5383 million tons, reflecting a year-on-year increase of 3.38%. However, on a monthly basis, aside from March, which saw a spike in imports due to delays affected by the Chinese New Year in February, subsequent months experienced a reduction in import volume due to intensively maintenance at foreign factories, resulting in decreased supply.