China PE Prices Keep Rising as Seasonal Demand and Holiday Buying Strengthen

China’s PE market has continued its upward movement into mid-September, with both import and domestic prices increasing further this week. Strong crude and feedstock costs, tighter availability in China and the Middle East, and improving seasonal demand are supporting sellers, despite January LLDPE futures on Dalian falling for two consecutive sessions at the beginning of the week.

Import PE offers have increased by $10-50/ton this week, depending on the grade, while domestic prices have risen by around CNY200-500/ton ($30-74/ton). Overall consumption remains moderate, but demand has improved from last month as the market moves further into the traditional “Golden September” period.

Agricultural film demand is picking up, inquiries are increasing, and some buyers have started preparing for the upcoming holidays. The Mid-Autumn Festival falls on September 25-27, followed by the National Day holiday from October 1-7, encouraging some pre-holiday procurement.

The latest gains extend a rally that has lasted around two months, increasingly driven by higher energy and feedstock costs alongside tighter supply. November Brent futures remain around $105-107/bbl, while unstable shipping schedules continue to restrict Middle Eastern PE availability, keeping near-term market sentiment firm.

Import PE Offers Rise Across Film Grades

Import sellers have raised offers for all major film grades this week. LDPE film has recorded the largest increase of $40-50/ton, while LLDPE film is up $10-30/ton and HDPE film has gained $20-30/ton.

A Hong Kong-based trader said Middle Eastern suppliers had again increased HDPE, LLDPE and LDPE offers, citing higher ethylene, naphtha and propane costs as well as elevated crude prices. The trader also highlighted tighter domestic availability in China due to increased maintenance activity.

These increases follow gains of $20-50/ton during the week ending September 11, when the sharp rise across energy and upstream markets encouraged sellers to target higher PE prices.

The ChemOrbis Price Index showed that weekly average import prices for LDPE and HDPE film had already reached four-month highs last week, while LLDPE film reached a five-month high. LLDPE was particularly close to the peak recorded during the first rally following the outbreak of the US-Iran conflict, standing just $5/ton below that level as of last week.

Domestic PE prices have also moved higher this week by around CNY200-500/ton. Local prices had outpaced imports during much of the recent rally, with the weekly average LDPE price exceeding its previous May peak last week and reaching its highest level since June 2022. LLDPE also moved close to its April peak.

High Crude and Feedstock Costs Continue to Support Prices

Energy costs remain a major factor behind the PE rally. November Brent crude rose $1.07/bbl to $105.68/bbl on Monday, while intraday prices remained around $107/bbl amid continuing concerns over Middle Eastern supply disruptions.

The shutdown of Saudi Arabia’s East-West Pipeline has added to supply concerns, while uncertainty over shipping through the Strait of Hormuz and risks around the Bab el-Mandeb Strait have kept geopolitical premiums elevated.

Feedstock markets have also followed crude higher, increasing PE producers’ replacement costs. Market participants have specifically cited rising ethylene, naphtha and propane prices behind the latest PE increases.

Dalian futures have offered a contrasting signal. January LLDPE futures fell CNY75/ton ($11/ton) on Monday and declined another CNY66/ton ($10/ton) on Tuesday.

The two-session decline has not yet disrupted the physical PE rally because crude and feedstock costs remain high and supply is relatively tight. However, futures movements will remain important. Continued crude strength could restore support to Dalian, while a deeper futures correction could reduce buying enthusiasm in the spot market.

Agricultural Film Demand Gains Momentum

Demand conditions have become more supportive in September compared with the earlier stages of the rally. While the recovery remains uneven, agricultural applications are providing clearer support.

A local PE trader said that as temperatures gradually fall in northern China, the peak greenhouse-film season is approaching, while agricultural and mulch-film demand has already improved. Some downstream producers have consequently increased operating rates.

A source at a Taiwanese PE producer also reported stronger sentiment, particularly for HDPE film, alongside improved agricultural film demand during the Golden September period. More buyers are checking offers, although demand from other downstream sectors remains relatively weak.

Another Chinese trader similarly reported better agricultural and mulch-film demand, while packaging consumption remained sluggish. Buyers are increasingly checking prices but continue to purchase mainly according to immediate requirements, keeping actual transactions moderate.

Therefore, demand is no longer as significant a drag as it was last month. Consumption is still not broadly strong, but seasonal improvement, higher agricultural-film operating rates and some pre-holiday replenishment are providing additional support.

Holiday Preparations Could Boost Near-Term Buying

Market attention is increasingly turning to China’s upcoming holidays. The Mid-Autumn Festival from September 25-27 will be followed shortly by the National Day holiday from October 1-7.

With the two holiday periods close together, converters may have a limited window to complete purchases and arrange logistics before activity slows. This could encourage some buyers to secure near-term requirements while seasonal demand improves and supply remains constrained.

However, buyers remain cautious following the rapid price increases. A trader said high initial offers from overseas suppliers have not always resulted in transactions because downstream converters remain reluctant to accept elevated prices. Buying interest has increased, but purchases are still mainly for immediate needs rather than aggressive stock building.

Tight Supply Continues to Support the Market

Supply conditions are adding to the cost-driven support. Middle Eastern PE availability remains restricted because of unstable shipping schedules, while a trader also pointed to limited US availability amid shipping delays.

Domestic Chinese supply has tightened due to concentrated maintenance and lower operating rates. A local trader said some producers have reduced production because of high costs and pressure on margins.

A Taiwanese producer reported low operating rates at its PE facilities, with LLDPE at around 40%, HDPE at 20-30% and LDPE at 80-90%, citing tight raw-material availability and high costs.

The supply situation may ease later. Several Chinese plants are scheduled to restart, while significant new PE capacity is expected in the fourth quarter. According to ChemOrbis Supply Wizard, around 4.25 million tons/year of new PE capacity is scheduled to start up in China during Q4.

For now, however, upcoming restarts and new capacity have not offset the combined impact of high production costs, maintenance-related supply restrictions, limited Middle Eastern availability and improving seasonal demand. With the two major holiday periods approaching and crude prices remaining elevated, China’s PE market continues to show a firm near-term trend, although the recent decline in Dalian LLDPE futures remains a factor to monitor.

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