China’s PE markets slip on weak demand, falling costs

China’s PE market remained subdued in the first half of July, with prices mostly stagnant and trading limited due to weak sentiment. Import LDPE film prices initially extended gains, driven by tight supply from Iran and the Middle East, but this strength quickly faded amid broader market weakness.

By mid-month, import and domestic PE prices saw renewed declines, particularly in LLDPE and HDPE film grades, as weak demand and cautious sentiment dominated. Ample supply and softening cost support further deepened the bearish tone in the market.

LL, HD see renewed drops, import LD hold firm

This week, the import LDPE film market remained range-bound, with sellers maintaining firm offers. However, LLDPE and HDPE film prices saw fresh decreases of $10/ton at the low end, pressured by softer offers from the Middle East and the US—marking the first downward movement in import PE since early June.

Middle Eastern LDPE film offers were unchanged week-on-week at $1010-1060/ton CIF China, cash. LLDPE and HDPE film prices, however, fell by $10-20/ton to $820-860/ton and $830-880/ton, respectively. Domestic prices also slipped by CNY80-300/ton ($11-42/ton), weighed down by losses in Dalian futures and persistently sluggish demand.

Tepid demand meets long supply, weaker costs

Although capacity losses in July—due to maintenance shutdowns and lower run rates—offered slight supply relief, inventories remained ample. Upcoming capacity additions further intensified supply concerns, with around 1.3 million tons/year of new capacity expected online by late July, according to ChemOrbis Supply Wizard.

On the demand side, buying interest remained weak. The seasonal summer slowdown and ongoing macroeconomic uncertainties limited purchasing activity to basic replenishment needs.

A trader commented, “Operating rates at downstream factories are rising slightly, but demand remains flat. End-users are only buying to replenish inventories. While supply pressure is easing, demand support remains limited.” A converter based in Dalian echoed, “We’re not in a rush to restock. Supply is long, and demand is soft during the off-season.”

Players also highlighted the impact of falling crude oil and futures prices. Another trader shared, “Futures prices have declined along with crude oil, weakening cost support. Market activity remains moderate, with downstream buyers mostly sticking to need-based purchases amid the off-season.”