international oil price has been in a relatively stable range-bound at present from the view of overall energy & chemical industry

Secondly, from the aspect of new start-ups, PE plants that were originally planned to put into production in the fourth quarter such as Hengli Petrochemical I and Zhejiang Petrochemical were difficult to start up in 2019. Thus as there was no new capacity start-up in the market, the LLDPE Jan future contract was hard to be impacted. And the power for crushing the LLDPE market weakened. As for the Baofeng II which had put into production, it’s a 300kt/year HDPE plant and had few influence on the LLDPE market.

Moreover, international oil price has been in a relatively stable range-bound at present from the view of overall energy & chemical industry. Offers for WTI crude oil are at around $50-55/barrel, and Brent are at around $55-60/barrel, which have strong supporting powers. And unilateral market is hard to establish. Although crude oil have limited influence on domestic LLDPE market, the market could be supported when the crude oil price is stable.

Overall, although domestic LLDPE market appears weak after the National Day holiday, the actual downward momentum is not strong and the up space is limited. In the late market, downward pressure on the Jan futures contract would declines quickly when it drops below 7,300yuan/mt. This situation would remain for a while, and the market would not decline too much.