Demand growth is slow LLDPE volatility higher

News: From the end of 2018 to April 2019, both Lotte Chemical and LG Chem completed the expansion of ethylene cracking, increasing ethylene supply
.
By the end of 2019, more than 2 million mt/year of ethylene glycol projects will be operational
in China, Malaysia and the United States.
U.
S.
ethylene exports will also increase
by the end of the year if Enterprise Products Partners and Navigator Holdings' new 1 million mt/year export terminal comes online in the fourth quarter of 2019.
Ethylene supply in Southeast Asia was also plentiful
in the first half of 2019 due to continued weakness in the linear low-density polyethylene (LLDPE) market, downstream maintenance and production failures.
Downstream: LLDPE producers will continue to maintain download production due to global oversupply in order to manage inventories
.
Under the trade-off, Asian ethylene continues to be oversupplied
.

Upstream raw materials market: The price of naphtha in Japan continued to rise, at $478.
13/mt, +6.
63
.
Ethylene Asian market Northeast Asia quotation is 860 US dollars / ton, -10; Southeast Asia region is 800 US dollars / ton, -10
.

Spot market: The domestic LLDPE spot market price has generally increased the unit price
.
The North China market rose 20-100 yuan / ton, and the mainstream price was 7250 yuan / ton, +20
.
The East China market rose 50-150 yuan / ton, and the mainstream quotation was 7400 yuan / ton, +100
.
The South China market rose 50 yuan / ton, and the mainstream price was 7550 yuan / ton, 0
.

Warehouse receipt inventory: exchange warehouse receipt reported 3738 lots, intraday - 85 lots; It is in the all-time high zone
.
Main position: the top 20 long positions in the main contract are 255853 lots, -14159 lots, short positions are 280732 lots, -19237 lots, net positions are -24879 lots, net space is reduced
.

Summary: Affected by the record low number of crude oil rigs in the United States, international oil prices continued to rise; Naphtha prices in the Japanese market also continued to rise, which supported costs to some extent
.
The atmosphere of the spot market is improving, and merchants generally raise the unit price
.
Port inventories declined, down 72,500 tons year-on-year, and the speed of destocking was acceptable
.
The downstream agricultural film start is growing slowly, the number of days used in raw material inventory has decreased, the market is in a wait-and-see mood, and merchants have mainly consumed the current inventory
.
The main contract of L2001 fluctuated higher, and the MACD green bar turned to a red column, and the price may continue the rebound trend
in the short term.
However, at present, downstream demand is still growing slowly, driving price upward momentum is insufficient, and it is expected that the rebound space is limited
.