I. Overall Trend

This week (6.17-6.21) polyethylene showed a narrow downward trend. The average price of LDPE 2426H in East China monitored by business associations was about 8287.5 yuan/ton; the average price of HDPE 5000S was about 8800 yuan/ton; and the average price of LLDPE 7042 was about 7800 yuan/ton. As of June 21, the price of LLDPE in East China showed a trend of falling first and then rising this week. LDPE prices showed a trend of falling first and then stabilizing this week. HDPE prices showed a steady trend this week.

On June 23, the LLDPE commodity index was 74.70, unchanged from yesterday, down 36.46% from the peak of 117.56 points in the cycle (2013-12-11), and up 0.86% from the low of 74.06 points on June 20, 2019. (Note: Period refers to 2011-09-01 to date)

On June 23, the LDPE commodity index was 64.49, unchanged from yesterday, hitting a new low in the cycle, down 43.10% from its peak of 113.33 on December 08, 2013. (Note: Period refers to 2011-09-01 to date)

On June 23, the HDPE commodity index was 71.33, the same as yesterday, hitting a new low in the cycle, down 30.29% from the highest point of 102.33 on July 24, 2014. (Note: Period refers to 2011-09-01 to date)

II. Market Analysis

Upstream: This week’s international oil price surge. Geographical tensions, supply contraction expectations are the main positive factors, but IEA downward demand expectations restrain the increase. On Monday (June 17), WTI crude oil July futures settled at $51.93 a barrel, down $0.58 from the previous trading day, trading range $51.59-52.73; Brent crude oil August futures settled at $60.94 a barrel, down $1.07 from the previous trading day, trading range $60.74-62.37. On Friday (June 21), WTI crude oil August futures settled at $57.43 a barrel, up $0.36 from the previous trading day, trading range $56.66-57.98; Brent crude oil August futures settled at $65.20 a barrel, up $0.75 from the previous trading day, trading range $64.00-65.76.

Manufacturer dynamics: This week, the overall start-up rate of agricultural film enterprises is about 12%, which is the same as last week. The start-up time of agricultural film enterprises is mainly in August, and the earliest device restart time is in August. Although there is a part of the bargain reserve behavior, but the long-term expectations are weak, the terminal still maintains the idea of bargain purchase.

Futures Trend: On June 21, polyethylene futures L1909 main contract opening price 7775, maximum price 7800, minimum price 7680, closing price 7740, pre-settlement price 7700, settlement price 7740, up 40, 0.52%, turnover 507906, position 652322, daily increase warehouse-17496. (Quote unit: yuan/ton)

Industry: According to the price monitoring of business associations, in the 20th week of 2019 (5.20-5.24), there were 6 kinds of commodities in the price rising and falling list of rubber and plastic plates. The top three commodities were EPS (1.02%), PP (0.99%) and HDPE (0.75%). There are 6 kinds of goods falling in the ring ratio, one of which is more than 5%, accounting for 6.3% of the monitored commodities in this sector. The products of the first three declines are PET (-5.77%), PA6 (-2.78%) and natural rubber (-2.45%). Average gains and losses this week were -0.66%.

3. Future Market Forecast

Looking forward to the future market, business analysts believe that the current two barrels of oil inventory has fallen to a low level, and the factory may need to purchase just next week after a low price replenishment in the early stage, but the overall market is in the off-season and the market demand is not large. Horizontal consolidation is expected to dominate in the near future.