Supply and demand pressures remain LLDPE price upward momentum is insufficient

News: Longzhong Information reported on August 14 that Lanzhou Petrochemical's 200,000-ton high-pressure unit produced 2426H, and the 60,000-ton old full-density plant was stopped on May 17, 2013 due to insufficient raw material supply, and has not been restarted; The 300,000-ton full-density plant is scheduled to be converted to 7042
.
Tianjin Lianhua's 120,000 tons/year LLDPE plant is planned to be converted to 9085
.

Upstream raw materials market: Naphtha prices rebounded, and the market price in Japan was $456.
38/ton, +1.
36%.

Ethylene prices rose in Asia, with the price in Northeast Asia being $940/ton, +2.
17%; In Southeast Asia, it was $840/mt, +2.
44%.

Spot market: LLDPE spot prices are generally upward
.
North China rose 30 yuan / ton, and the mainstream price was 7550 yuan / ton
.
East China rose 50 yuan / ton, and the mainstream price was 7600 yuan ton
.
South China raised by 100 yuan / ton, the mainstream price is 7700 yuan / ton, +100
.

Summary: Affected by the improvement of trade prospects and the better-than-expected performance of the US CPI, international crude oil prices rose, and naphtha and ethylene prices both recovered, supporting cost prices
.
However, on the supply side, the operating rate of polyethylene enterprises is at a high level, the total inventory of PE has risen, and the impact of PE equipment maintenance has decreased slightly; In terms of downstream demand, the operating rate of agricultural film is growing slowly, and the factory is mainly
based on just-in-demand procurement.
Supply and demand pressures remain, and there is not
enough upward momentum to drive prices in the short term.
L2001 futures price rose to the 60-day moving average after falling, and closed down at the end of the day, and it is expected that the short-term price will be weak and volatile
.
Operationally, you can take a short position around 7550 and stop loss 7600
.