LLDPE Prices Marginally Slipped in China in January 2024

The LLDPE (Linear Low-Density Polyethylene) prices experienced fluctuations and remained on a lower end in January 2024 in China. The dwindling LLDPE price trend was primarily influenced by a mix of factors, beginning with a post-New Year's inventory accumulation by petrochemical companies. This accumulation exerted supply-side pressure, leading to a subdued and slightly downward trajectory in LLDPE prices initially. However, as the month advanced, a revival in the futures market injected momentum into LLDPE spot prices, counteracting the early downtrend.

Several positive developments played a pivotal role in reversing the market's direction slightly upwards for LLDPE. A rebound in crude oil prices, the anticipation of domestic interest rate reductions, and the approach of the Spring Festival, which traditionally stimulates market demand for restocking, were key contributors. Despite the initial downward movement, LLDPE futures demonstrated resilience, hinting at a favorable scenario for the spot market and casting an optimistic light on the outlook for February 2024.

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Nonetheless, the supply pressure on LLDPE remained steady. As the Spring Festival neared, a gradual decline in demand was noted, attributed to downstream factories entering their holiday shutdowns. This led to expectations of a limited operational adjustment in the LLDPE market before the festival, with minimal scope for significant price increases.