Reasons for recent plastic price reduction

Recent reasons for plastic price reduction

plastic prices have fallen again and again, making many experts fall below their glasses. The reasons are as follows:

1) the decline in demand for plastic products is the main reason. In particular, the reduction in the amount of agricultural film is also very important for the development of LD and an enterprise, and the prices of PE and LLDPE have an impact

2) the first example of plastic products: each time the load is applied, it can only reach a certain load. The early losses of manufacturers and dealers make them dare not have inventory of raw materials and products, and desperately lower the purchase price

3) the increase of petrochemical production capacity in Asia has led to an oversupply of products, which is the fundamental reason. The new capacity of Southeast Asia and Taiwan is obvious, but the increased capacity of several domestic ethylene condensation technology transformation is easy to be ignored

4) after joining the WTO, the preferential tariff of 3% was cancelled, and the original companies run by various ministries and commissions were imported, but dozens and hundreds of companies were imported. The financial strength and psychological endurance increased many variables. Several companies sold goods, and it was easy to concentrate on deepening and refining products, causing a chain reaction

5) Asian petrochemical companies have more competition and less coordination, and lack accurate analysis and judgment of the market. We often go to extremes when encountering changes. When we are optimistic, we should raise the price of PE and PP to $700, and increase the horsepower. There is a lack of basic data such as process parameters required for formulating standards to produce; When the market fails, they compete to reduce prices, and rarely use the means of limiting production and ensuring price

6) Russia's border trade policy was cancelled and resumed, and the "double halving" reduced many import costs, which also caused certain pressure on people's psychology

7) the unconventional price reduction of Yanshan Petrochemical new high pressure polyethylene has a direct impact on LDPE, because it can replace LLDPE. Took the lead in reducing prices

based on the above reasons, there will be more variables in the next step. If the manufacturer does not take measures such as limiting production and ensuring price, even if the price drops to the end of June and starts to rebound, the possibility of further price reduction in July cannot be ruled out