PE supply expects to increase –
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PE supply expects to increase

2022-01-29 13:45:35 CCFGroup

Since the beginning of 2022, PE market fluctuates higher. The trend of LLDPE futures is stronger, but the upward space of spot market is limited. Taking the East China LLDPE price as an example, it only increased from 8,900-9,000yuan/mt to 9,100-9,150 yuan/mt. The strong LLDPE futures is mainly supported by crude oil, while the spot market is mainly restricted by the loose supply and demand pattern. Therefore, the overall market is mainly volatile.



With the Spring Festival holiday approaching, both upstream traders and downstream plants will have their Spring Festival holiday gradually, and market transaction sentiment weakens. If the high cost support of crude oil is not taken into account, PE market may retreat from high price.


In addition, seeing from the new production capacity in 2022, supply pressure will remains. According to CCFGroup, a total of 3.95 million tons of PE plants are planned to be put into production in 2022, with a capacity growth rate of 14.74%. It is estimated that by the end of 2022, the total production capacity of PE in China will reach 31.495 million tons.


Company Plant Capacity (kt/year) Startup time
Zhejiang Petroleum & Chemical II HDPE 350 Jan
Sinopec Zhenhai (ZRCC) HDPE 300 Jan
Zhejiang Petroleum & Chemical II LDPE 400 Q1
Sinopec Zhenhai (ZRCC) HDPE 300 Mar
Shandong Jinhai Chemical HDPE 400 May
Sinopec Jieyang HDPE 400 Sep
Sinopec Jieyang HDPE/LLDPE 800 Sep
Sinopec Hainan HDPE 300 2022
Sinopec Hainan HDPE/LLDPE 300 2022
Satellite petrochemical II HDPE 400 end of 2022
total   3950  


Among them, the first HDPE plant of Sinopec Zhenhai (ZRCC) has been successfully put into operation, and CCFGroup plans to add the new plant from February), and the second HDPE plant has also begun to test run. The HDPE plant of Zhejiang Petroleum & Chemical II is in trial run, and its LDPE plant is expected to be put into production in the first quarter. The production time of the other plants has great uncertainty, and the progress of their production implementation still needs to be observed. As for whether it can be put into production as scheduled, CCFGroup will also update in time according to the actual progress.




Counting the growth rate of PE new startups since 2014, although the production growth rate in 2022 is lower than that in 2020 and 2021, with the continuous increase of its plant base, the subsequent supply pressure cannot be underestimated. In addition, coal chemical plants were concentrated put into production in 2014-2019, and petrochemical and ethane dehydrogenation projects have been put into production continuously since 2020, which brings new challenges and opportunities to the PE market pattern.