China PE eases after brief uptick as Golden September flare burns out too soon

China’s PE markets failed to sustain their early-September uptick, with prices slipping again by mid-month as demand proved too weak to support further gains. Unlike PP, PE had managed modest increases during the first half of the month, raising hopes for a stronger “Golden September.” But the seasonal boost quickly ran out of steam, leaving the market facing renewed softness instead of stability or further hikes.

Local PE film prices saw mild declines last week as demand failed to pick up despite seasonal expectations. Earlier support from tight LDPE supply faded, while broader market sentiment remained bearish amid cautious buying and adequate inventory levels. Similarly, import offers saw downward revisions as suppliers responded to weak regional demand and muted buyer interest.

Players now expect the market to remain rangebound or see limited recovery heading into the October holidays. A trader noted, "New capacity is still competing for market share, so spot prices remain under pressure. With the National Day holiday approaching, downstream buyers are stocking up early, which is tightening cash flow. After the holiday, we expect demand to weaken."

Domestic market: Supply curbs can’t offset sluggish demand

In the week ending September 19, local LDPE prices fell for the first time since late July, slipping by up to CNY140/ton ($20/ton). This drop pulled weekly average prices off their three-month highs, according to the ChemOrbis Price Index. HDPE prices were mostly steady to CNY40/ton ($6/ton) lower, resuming their downward course after briefly stabilizing. Current average levels are now off their recent three-month highs, reached just before the correction began in mid-August. LLDPE prices dropped between CNY50-110/ton ($7–15/ton) over the same period. This marked a continuation of the weak trend that has been in place since late August, following a short-lived pause in declines the previous week.

“Supply is not that long, but the price is still difficult to rise,” said a trader, pointing to a disconnect between stock levels and buying sentiment. While some pre-holiday restocking emerged, the broader demand recovery was underwhelming. “Golden September didn’t materialize this year,” one trader noted, reflecting widespread disappointment across the market.

Domestic inventories were reportedly 145,000 tons lower year-on-year as of September 19, but this decline didn’t translate into stronger demand. “Producers are reducing stocks ahead of the October holidays while keeping run rates low to manage oversupply,” a market player explained. Still, demand from the agricultural film and packaging sectors offered some support, with one trader noting, “Orders are improving slightly, and market sentiment is more active, but recovery is narrow and cautious.”

Import market: Supply pressure grows, buyers stay defensive

Import LDPE prices eased by up to $20/ton during the week ending September 19, with some Middle Eastern offers trimmed by as much as $30/ton, and Iranian cargoes down $10/ton. These reductions brought average LDPE prices down from their highest levels in over five months, signaling the end of a steady uptrend that had persisted since July.

For HDPE film, overall import prices were stable to $10/ton lower, with Middle Eastern cargoes slipping $10-20/ton, and Iranian offers down by as much as $20/ton. This pulled HDPE off its six-month highs, which were maintained through modest gains and flat trends in previous weeks. LLDPE film imports also saw their first notable dip since July, with average prices down by up to $20/ton. Offers from the Middle East declined by $10-20/ton, while ASEAN-origin cargoes held mostly stable. The midpoint of the overall price range slipped from more than two-month highs, ending a previously firm trend.

A South Korean producer’s source said they reduced offers across all film grades due to “stalled regional demand following an initial uptick.” Despite lower prices, traders reported limited purchasing appetite, with one noting, “Buyers are only purchasing for basic needs, and overall sentiment is not optimistic.”

“US offers are limited, and Iranian cargoes are awaiting approval, which may add to supply if cleared,” said a trader, adding that the uncertain timing of Iranian arrivals added to the wait-and-see approach among buyers. Downstream users, including packaging and film manufacturers, restocked at minimal levels, wary of external factors such as trade tariffs and logistics disruptions. “Despite some spot demand, prices are under pressure, and we expect the market to stay weak in the near term,” a downstream buyer commented.