Polyethylene

Polyethylene Market Dynamics Report (Recent Update)

I. Price Trends
1. LDPE Prices: As of July 15, 2026, the Business Society’s benchmark LDPE price stood at RMB 10,400.00/ton, representing a 12.64% increase from the beginning-of-month level (RMB 9,233.33/ton) and a daily gain of 4.00%. Year-to-date statistics indicate that the median LDPE price is RMB 10,175/ton; the current price thus sits at the median level.
2. LLDPE Prices: As of July 13, 2026, in China’s USD-denominated polyethylene market, Kuwait’s LLDPE grade 7047 (film-grade) was quoted at USD 925/ton; SABIC’s 218WJ (film-grade) at USD 985/ton; and NOVA’s 0218D (film-grade) at USD 950/ton. Domestically, as of July 9, the mainstream price for linear low-density polyethylene (LLDPE) in North China ranged between RMB 7,500–7,700/ton, with weekly gains of approximately RMB 500/ton.

II. Supply Situation
1. Domestic Supply: Few planned maintenance shutdowns are scheduled; some unplanned outages are expected to resume operations shortly, and Tarim Petrochemical’s Phase II plant is anticipated to gradually ramp up output. In July, the total planned maintenance volume remains relatively high, with estimated production losses totaling 517,100 tons—down 15.26% month-on-month but up 2.06% year-on-year. Polyethylene output for the week of July 3–9 amounted to 637,400 tons, a 0.98% decline week-on-week.
2. Import Situation: Overseas suppliers recently tested lower price offers, leading to increased transactions of low-priced cargoes. With rising trade volumes, foreign suppliers have subsequently raised their offered prices. While market participants show moderate willingness to absorb competitively priced imports, they remain cautious toward premium-priced cargoes.

III. Demand Situation
1. Downstream Operating Rates: The decline in downstream factory operating rates has slowed; some downstream players have begun purchasing opportunistically at lower prices. However, against the backdrop of seasonal weakness, sustained restocking momentum remains uncertain. Overall downstream operating rates across polyethylene-consuming industries stood at 34.31% for the reporting week (July 3–9), down 0.47% week-on-week; next week’s rate is forecast to fall further by 0.59%. Specifically, agricultural film producers operated at 10.35% (down 0.09% week-on-week), while PE packaging film producers operated at 45.00% (down 0.44% week-on-week).
2. Market Demand: Market sentiment remains weak, with limited transaction activity among film producers. End-user consumption lacks momentum, and production activities reflect typical off-season conditions. Downstream players currently exhibit no significant pre-stocking intentions, offering limited order support to film producers.

IV. Cost Support
1. Crude Oil Prices: Escalating Middle East conflicts have driven consecutive increases in international crude oil prices, thereby strengthening cost-side support. Crude oil prices are projected to rise further next week, with WTI expected to trade between USD 70–78/barrel and Brent between USD 74–82/barrel.
2. Cost Differential: This week, the cost gap between oil-based and coal-based polyethylene production widened by RMB 575/ton, while the profit differential narrowed by RMB 675/ton. Overall, profitability improved across most segments, except for low-pressure injection molding, where profits declined by RMB 435/ton.

Analysis & Assessment
1. Supply-Demand Balance: While supply recovery is expected as maintenance units restart operations, the number of ongoing maintenance units remains substantial, limiting overall supply growth. On the demand side, seasonal weakness continues to suppress downstream operating rates and dampens sustained restocking enthusiasm—resulting in a marginally weak supply-demand balance.
2. Cost Support: Escalating Middle East tensions have lifted international oil prices, reinforcing cost-side support and providing short-term upward price pressure on polyethylene.
3. Market Sentiment: Buyers demonstrate modest receptiveness to competitively priced material but remain cautious toward premium-priced offerings—indicating an overall wait-and-see market mood.

Outlook
1. Price Trend: In the near term, supported by robust cost fundamentals and constrained supply growth, polyethylene prices are expected to consolidate at elevated levels with modest upward oscillation, ranging between RMB 150–400/ton.
2. Supply-Demand Evolution: As maintenance units progressively resume operations, supply volumes are anticipated to rise. However, seasonal demand weakness and insufficient restocking appetite may gradually shift the supply-demand balance toward relative looseness.
3. Cost Impact: Should Middle East hostilities persist or intensify, further crude oil price increases would strengthen cost support and push polyethylene prices higher. Conversely, de-escalation and subsequent oil price declines would weaken cost support and expose polyethylene prices to potential downward correction.