PE prices are improving next month and there is room for improvement

Market Analysis:

Crude oil: Oil prices generally showed a downward trend in July, mainly due to trade risks, market concerns about lower demand, triggering selling sentiment
.
Then the United States suspended sanctions on Iran and may release strategic reserve crude oil, easing the pressure
on the supply-side gap.
However, with the decline in US inventories and the easing of the US-Europe trade dispute, oil prices have clearly begun to bottom out.

On July 31, WTI crude oil September futures settled at $68.
76 per barrel, trading in a range of $68.
05-70.
22, and Brent crude oil September futures settled at $74.
25 per barrel, trading in a range of $
74.
14-$75.
10.

Ethylene: According to analysis, Asian ethylene prices generally showed a trend of first rising and then suppressing in July, mainly due to the tight spot supply of ethylene in the early stage, strong downstream demand, coupled with the high level of international crude oil prices to boost the confidence of the market and traders, ethylene prices rose
.
Then, with the weak operation of downstream products, the overall trading atmosphere of the market was not good, and the price of ethylene fell
.
Ethylene prices are expected to be volatile early next month
.

Petrochemical manufacturers: 1.
Price adjustment: In July, in terms of factory prices of domestic petrochemical manufacturers, LDPE and LLDPE showed a volatile upward trend, and HDPE prices first fell and then rose
.
The main reasons for the price adjustment of petrochemical plants are: a, the overall trend of polyethylene futures shows an upward trend, although there is a slight shock decline in the middle of the month, but the overall situation has little impact, and the trading atmosphere in the spot market has not been high, some petrochemical plants have raised prices, resulting in downstream resistance to high-priced raw materials, weak demand, procurement is mainly based on rigid demand, and shipments are poor
.
b.
In July, except for special varieties, the operating rate of agricultural film products maintained a weak trend, which had the impact of environmental protection, and downstream shipments were not active, and rigid demand was the mainstay
.
In February and July, some of the petrochemical manufacturers' equipment ended maintenance, and at the same time, the equipment was stopped for maintenance, and the overall production capacity increased compared with the previous month, but it had little impact on the downstream inventory, and the downstream still had a rigid attitude
.
3.
Inventory: The pressure of inventory digestion of petrochemical plants in July was reduced
compared with June.
Mainly the upstream crude oil situation has improved, while the futures market trend volatility upward, the market has a certain favorable support, although downstream enterprises are still cautious wait-and-see, but the overall situation of inventory digestion pressure is not large
.
Aggregate domestic inventories are expected to fluctuate in a narrow range in
August.

Futures: July futures trend is volatile
upward.
Although there was a small shock decline in the middle of the month, it had little impact on the overall trend situation
.
However, the impact on the current spot market is limited, and the transaction situation is general, mainly based on just demand
.
It is expected to maintain a slight rally in the early part of August, but be careful of the possibility of a pullback, and it is recommended to maintain a cautious wait-and-see situation
.

In terms of downstream enterprises, the peak season of agricultural film and mulch film production in early July has passed, and the operating rate has decreased
.
Operating rates were affected, which dampened
transactions.
Looking forward to August, the demand for low-pressure pipes is still in the off-season, but the demand for high-end agricultural film may be started, and the start of other industries is stable
.
The supply and demand situation has not changed much, and it is still dominated by rigid demand
.

Future market forecast: There is still room for the upstream crude oil market to rise in August, which can form a certain cost support
for the downstream.
On the supply side, imports in August are expected to continue to decline month-on-month, but the period of concentration of domestic installations has passed, the maintenance loss in August has increased, and the current upstream inventory pressure is not large, and the total domestic supply is expected to decline in August, but to a limited
extent.
Overall, the basic situation of PE improved in August, and the market trading situation was expected to improve, but it remained cautious
.