Insight
Healthy polyethylene margins in China – is it sustainable?
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Report summary
The collapse of crude oil prices has softened the blow dealt by coronavirus to petrochemical producers in China. Naphtha prices have fallen 70% since January 2020, and polyethylene has only fallen by 17% since January 2020. As such, the polyethylene-naphtha spread has gone from $300/ton at the start of the year to nearly $600/ton. Against the background of global oversupply and coronavirus reducing the demand, how sustainable are polyethylene integrated margins?
Table of contents
- Slow recovery in demand as global recession fears loom
- Domestic production will be delayed but won’t decline year-on-year
- Large import volumes will swell port inventory in the short term
- Manufacturers’ stockpiles likely to rise again as production outpaces demand
- Conclusion
Tables and charts
This report includes the following images and tables:
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China polyethylene production forecastPolyethylene port inventoryPolyethylene manufacturers’ inventoryPolyethylene-naphtha spread forecastGlobal HDPE plant gate cash cost curve, Brent $34/bbl
What's included
This report contains:
