China’s PE Market at Crossroads: Import Strength Counters Domestic Weakness Going into Lunar New Year

China’s polyethylene (PE) markets followed diverging trends in the week ending February 13, just ahead of the Lunar New Year holidays. While import prices continued to rise on tighter availability and firm supplier sentiment, domestic prices softened under seasonal demand pressure as downstream converters gradually suspended operations for the holiday period.

The early start of holiday shutdowns weighed on consumption across key sectors, creating a cautious short-term outlook domestically. At the same time, expectations of a post-holiday rebound supported firmer import pricing, leaving the market in a transitional phase.

Import Gains Persist as Domestic Prices Ease

Domestic PE prices shifted to a softer trend during the week. Local LDPE film prices declined by up to CNY150/ton after three consecutive weeks of stability. HDPE film prices also reversed their firm trend seen since early January, falling by up to CNY50/ton. LLDPE film extended its decline for a second straight week, posting similar losses.

In contrast, import PE markets maintained their upward momentum. Import LDPE and LLDPE film prices rose by up to $20/ton, marking a second consecutive week of gains. HDPE film prices increased by $10–30/ton, extending their uptrend into a fifth straight week. Suppliers, particularly from the Middle East and South Korea, continued to test higher offers amid expectations of stronger demand after the holiday break.

Market feedback reflected mixed sentiment. Traders reported weaker domestic demand as market participants left for the holidays, while import players pointed to renewed buying interest and anticipated restocking after the Lunar New Year.

Seasonal Slowdown Shapes Near-Term Outlook

As converters gradually shut down operations, immediate demand declined. Logistics and transportation activity also slowed, further limiting transactions. Feedstock procurement for agricultural film production was largely completed for the week, contributing to softer buying activity.

Meanwhile, expectations of increasing domestic supply added pressure to local prices. Planned unit restarts at major facilities, including Guangdong Petrochemical, Sinochem Quanzhou, and Sinopec-INEOS, reinforced projections of higher output in the coming weeks.

Market indicators offered a mixed picture. Polyolefin inventories initially remained below 450,000 tons on February 12, when price assessments were conducted, but rose on February 13, signaling slower consumption. May LLDPE futures on the Dalian Commodity Exchange edged slightly lower, reflecting cautious sentiment, while flat ethylene prices provided limited cost support.

Despite the short-term weakness, some market participants remain optimistic about post-holiday prospects. Several buyers anticipate renewed restocking activity and gradually improving downstream operating rates once factories resume full operations.

Overall, China’s PE market stands at a crossroads, balancing seasonal domestic softness against firm import trends and expectations of a demand recovery after the Lunar New Year holidays.

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