News and Articles

• PE futures settled at 8,080 yuan per tonne, down 0.76 percent on day
• Shanghai SECCO 300,000 tonne FDP unit restarting with grade 5502FA
• April China PE output down 8.2 percent year on year on naphtha shortages
• 46 million tonnes of global ethylene capacity remains non operational
• China has moved into net PE exporter territory for several grades

Polyethylene prices on the Dalian futures market closed at 8,080 yuan per tonne, a single-session decline of 0.76 percent but still 7.63 percent higher than the same date a year earlier. The PE market is showing conflicting signals. On the supply side, output cuts at non coal-based plants across Northeast and East Asia continue to constrain availability, but on the demand side downstream film, packaging and pipe converters are running rigid demand replenishment rather than rebuilding stocks. Shanghai SECCO's 300,000 tonne per year full density polyethylene unit was expected to restart on Monday, with the accompanying 300,000 tonne per year low pressure unit set to produce grade 5502FA.

The Chinese export-led arbitrage continues to reshape Asian flows. With the effective closure of the Strait of Hormuz, China has moved into net exporter territory for several PE grades, and Indian, Southeast Asian and African buyers are increasingly looking to Chinese coal-to-olefin and PDH producers for cover. April PE output in China fell 8.2 percent year on year as Middle East feedstock shortages forced rate cuts at non-CTO crackers, but cumulative export volumes have surged. PP exports rose 65 percent year on year in March, and PE has tracked a similar trajectory.

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Producers across the value chain are now navigating a complex two-track market. CTO and coal-based PE producers in China are running flat out and capturing widened spreads, while naphtha-based crackers across South Korea, Japan and Taiwan are losing money on every tonne. SCG Chemicals reported that approximately 46 million tonnes of global ethylene capacity, equivalent to around 20 percent of nameplate, has become non operational since the start of the conflict due to the Hormuz closure. That figure is consistent with supply-demand database estimates that the Middle East accounts for roughly 15 percent of global PE and ethylene capacity, with around 9 percent located in or near the strait.

Procurement teams sourcing LDPE for film, HDPE for pipes and blow molding, and LLDPE for stretch and shrink film should treat the current market as transient. The Shanghai SECCO restart and the early summer monsoon lull in India will create episodic pricing windows. Buyers running just-in-time inventory should consider building two to four weeks of additional cover at current Chinese export levels, particularly for blow molding HDPE and high pressure LDPE where availability remains acute. Carbide-based PVC arbitrage continues to draw some converter attention away from PE in dual-use applications.