After the peak season for PE film ends, the release of packaging demand from the Double 11 shopping frenzy, and the arrival of winter, the overall plant operating rate is expected to decline and remain at a relatively low level.
According to foreign media reports, recently, polyethylene (PE) prices have generally declined, and the market may be pressured by weak demand and economic downturn for the rest of this year.
The Global Manufacturing Purchasing Managers' Index (PMI) has been in a contraction range for 13 consecutive months, indicating a weak global economy.
Even during the traditional peak season, demand in China's domestic market is relatively lukewarm. Many traders say downstream producers face low profit margins, and new orders lack momentum to rise.
Therefore, after the peak season for PE film ends, the release of packaging demand from the Double 11 shopping frenzy, and the arrival of winter, the overall plant operating rate is expected to decline and remain at a relatively low level.
End users are expected to make on-demand purchases in the fourth quarter.
Overseas demand is also weak. According to ICIS, in Europe, the effects of the recession are being felt, and recent key trends have affected the packaging industry, including more online shopping and food delivery.
However, compared to previous years, the holiday season at the end of this year is likely to see a decline in demand for food and gifts due to rising unemployment and economic concerns entering the new year.
In Asia, due to increased financial uncertainty, consumers are delaying the purchase of non-essential goods, and it is expected that the durable part of the packaging industry will be affected.
Supply pressure is unlikely to ease in the short term. According to ICIS's forecast, the loss of PE production capacity due to factory maintenance in the fourth quarter is expected to be at a relatively low level. The total volume from November to December is expected to be about 202,000 tons, a year-on-year decrease of 38%.
Some Middle Eastern suppliers prefer to sell products to India rather than China, but the sharp increase in the supply of bagged goods from US traders has raised concerns that the influx of these lower-priced goods into China may put pressure on the prices of domestic products, further weakening interest in purchasing.