China Polyethylene Market Stable Amid Cautious Demand and Improving Production Margins

Key Highlights

• RIL, IOCL, OPaL announce ₹1,000–₹2,000/MT hikes in PE and PP prices
• LDPE faced highest throughput loss (~12 kt), impacting short-term availability
• DGTR initiates anti-dumping probe on LLDPE imports from six Gulf nations
• Ethylene margin recovery signals improved feedstock economics

PE Market Price: Feedstock and Products

• During the first week of July 2025, domestic prices for Polyethylene and related feedstocks in East China showed moderate stability. 
• LDPE film was assessed around CNY 9,400/ton, HDPE film near CNY 8,300/ton, and LLDPE film hovered at CNY 8,000/ton. 
• Recycled LDPE maintained at approximately CNY 6,500/ton, while ethylene stood at CNY 3,300/ton, and methanol at CNY 2,400/ton.
• On the profitability side, PE production via ethane cracking reported a slight weekly gain of CNY 9.60/ton to settle at CNY 615.00/ton, while ethylene margins showed a sharp improvement across MTO, FCC, and ethane cracking routes—indicating a rebound in feedstock economics.

PE Market Demand and Supply Dynamics

• The throughput loss data indicates LDPE faced the highest weekly operational disruptions, exceeding 12 kt, while HDPE and LLDPE registered comparatively lower losses. These figures point to production fluctuations that could influence short-term availability.
• Downstream activity remains lukewarm across most processing sectors. Operating rates were underwhelming, with packaging film and blow molding hovering around 45–50%, and segments like agricultural film, raffia, and pipes operating between 30–40%. This signals cautious demand amid weak downstream consumption and possibly planned shutdowns or inventory control strategies.
• Inventory-wise, traders' stockpiles have declined slightly from peak levels in June, now standing around 60–62 (10kt units), while producers’ inventories have remained steady at ~40–42 units, indicating a gradual rebalancing of supply.

PE Market News

• Reliance Industries Limited (RIL) has announced an increase in polymer prices effective July 1, 2025. HDPE prices have been raised by Rs. 2,000/MT, LLDPE by Rs. 1,500/MT, and LDPE by Rs. 1,500/MT. However, the price for LD AL has been increased by only Rs. 1,000/MT, while LD EC/HD prices have been rolled over.
• Indian Oil Corporation Ltd. (IOCL) followed suit by increasing PP prices by Rs. 1,000/MT, HDPE by Rs. 2,000/MT, and LLDPE by Rs. 1,500/MT, also effective from July 1, 2025.
• ONGC Petro additions Ltd. (OPaL) has also revised its polymer prices, raising PP prices by Rs. 1,000/MT, HDPE by Rs. 2,000/MT, and LLDPE by Rs. 1,500/MT, effective the same day.
• India’s Directorate General of Trade Remedies (DGTR) has initiated an anti-dumping investigation into imports of Linear Low-Density Polyethylene (LLDPE) from Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, and the UAE. The probe aims to assess whether these imports are being dumped into the Indian market, thereby harming domestic manufacturers.
• Lotte Titan Nusantara is preparing to restart its PE plant in Cilegon, Indonesia, following a three-week unplanned outage caused by feedstock supply disruptions. The facility has a combined production capacity of 450,000 tons/year across HDPE and LLDPE lines.
• Meanwhile, MOL Petrochemicals is planning a maintenance shutdown of its No.2 HDPE plant in Tiszaujvaros, Hungary. The plant has an annual capacity of 220,000 tons, and the scheduled maintenance will temporarily reduce HDPE availability in the European region.

Expert Opinion: Rangebound Market with Upward Bias if Demand Improves

• The Chinese market is expected to remain rangebound in the near term. Improving production margins, especially in ethylene, could encourage higher operating rates if downstream demand picks up. However, muted operating rates, stable to falling inventory, and a cautiously optimistic trade environment suggest that suppliers may avoid aggressive pricing moves.
• Sustained improvements in global crude and naphtha markets, alongside seasonal demand recovery in sectors like packaging and agriculture, could provide upward momentum. However, weak macroeconomic cues and export uncertainties may keep sentiment restrained until clearer signs of demand emerge in the second half of July.