The Most Obvious Aspect on The Supply Side Is The Significant Increase in Domestic Production Capacity

The most obvious aspect on the supply side is the significant increase in domestic production capacity. Currently, the 500kt/year HDPE plant and 300kt/year HDPE/LLDPE plant of Sinopec/Ineos Tianjin has been commenced in Nov. It is estimated that the average monthly increase is around 70,000 tons. Subsequently, there are still plants such as Baofeng, Wanhua, Yulong, etc. Even though there is a probability of delay for some plants, they can basically be implemented before the first quarter of 2025. The subsequent domestic supply cannot be underestimated.

The increase in domestic production will, to a certain extent, squeeze the supply of imported materials. However, currently, the overall import volume is still relatively sufficient. From January to October 2024, China's total PE imports were 11.4013 million tons, an increase of 3.15% compared to the same period last year.