Chinese Polyethylene prices have been constantly rising amid supply shortage, robust demand, and soaring crude oil prices

Polyethylene prices in China have been seeing a consistent uptrend over the last month. LLDPE, LDPE, HDPE prices have been rising on the back of supply constraints, maintenance activities in factories, and elevation in the prices of crude oil amidst disturbance in the Middle-Eastern disruption in the logistics owing to Israel and Iranian war.

The supply side experienced significant tightening due to several factors. Petrochemical plants entered a period of intensive maintenance in the spring, leading to widespread shutdowns. This routine, termed 'spring inspections', has reduced PE production capacity and lowered inventory levels. These maintenance activities are part of a cyclical pattern within the industry but have been more pronounced this season, contributing to the supply shortage.

The ongoing havoc in the Middle East amidst ceaseless attacks of Israel and Iran on each other, along with other geopolitical factors, has driven crude oil prices up. These hikes occurred notably in early April and persisted at high levels through mid-April, thereby pushing up the cost of polyethylene production. The volatile crude oil market continues to exert a strong influence on PE pricing dynamics.

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Demand for PE has shown significant improvement following the Qingming Festival holiday. Downstream industries, particularly in sectors like agricultural film and packaging, have ramped up their operations, leading to increased market activity. The end of the peak season for agricultural films and strong consumer expectations for packaging films, especially in anticipation of hotter weather and increased needs for frozen food and fresh-keeping packaging, have helped sustain demand.