Chine PE Market Forecast
Supply: Less turnarounds will be in next week. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 250kt/a LDPE unit at Zhongtian Hechuang Energy will be shut down. The 270kt/a LDPE unit at Shenhua Xinjiang Energy keeps in maintenance. The 50kt/a PE Line 1 at Sinopec Shanghai Petrochemical keeps maintenance until late Aug, and another 50kt/a LDPE unit will be maintained next week. The expected decreases in supply will be 8.2kt next week. The import volume in the next week is expected to be increase. The sources are mainly from the Middle East.
Demand: In terms of the agricultural film, the demand rose slowly. The operating rates at film factories were limited by the environmental protection inspections. The factories purchased based on needs amid the cautious attitude.
Overall, the upstream crude oil market keeps moving down. The profits at oil-to-olefin enterprises are high. On the supply side, the total supply is ample. The Chinese-made PE supply is stable and the import volume is expected to rise. On the demand side, the total demand keeps thin. The environmental storm will continue to affect the production of downstream factories. Besides, the overall demand in 2017 is less than expectation. From the LLDPE futures market, the LLDPE futures broke throughRMB10,000/mt and then kept volatile. The uptrend will continue but the strengthwill diminish. To sum up, the ex-works prices of PE at petrochemical companies will be stable at the end of the month. The Chinese PE market will move in highs. The mainstream LLDPE prices will be RMB 9,600-10,150/mt.
China SM Market Forecast
The styrene stocks at the main ports of East China are not likely to see notable growth, as limited imports will arrive and the delivery speeds up. With the demand peak season coming, operating rates of major downstream industries will notably increase. Additionally, merchantable spot styrene resources were insufficient in East China. Mainstream traders will continue replenishing their stocks. The buying-high sentiments in the Asian market also provides certain support. On the whole, positives attitudes toward the Jiangsu styrene market next week could be forecasted.
China Methanol Market Forecast
In Northwest China, the methanol production is steady, and the inventory is stable-to-rising. It is predicted that local methanol producers will maintain normal sales next week. The presold resources will flow into other inland areas and coastal areas for arbitrage, and the prices will adjust at a high level. In other inland areas, the inventory at methanol producers is low, and the demand from olefin plants is fine. However, the environmental protection inspection slightly curbs the operating rates at some methanol producers and traditional downstream plants. The negotiation prices may keep adjusting within a narrow range. The prices will be in the range of RMB 2,240-2,390/mt in Shandong and RMB 2,020-2,120/mt in Inner Mongolia next week.
In the coastal areas, the spot sales this week were still mainly concluded on the arbitrage and short-covering demand. Downstream plants showed resistance to high methanol prices. However, the supply of merchantable resources will remain tight, as the import arrivals from mid-August to end-August are still extremely concentrated. In the near term, the methanol prices in the coastal areas will adjust in the range of RMB 2,580-2,650/mt. However, the uptrend lacks stable demand support, so the market may fall back in the long term. In the coastal areas, except the restocking on rigid demand, the consumption of inventories is slow. Moreover, imported methanol cargoes will arrive intensively in H2 August, so most players with complicated mentality are still cautious about the speculation and purchasing. It is predicted that the spot prices may fluctuate in the range of RMB 2,450-2,550/mt in the coastal areas next week.