The situation between Russia and Ukraine continues to be confusing, with reports of Ukraine continuing to attack Russia. Trump also threatened today to impose a 25% secondary tariff on Russian oil. Brent crude oil's intraday gains have expanded to 1.00%, currently priced at $73.08 per barrel.

So how will the polyolefin market perform this week?

Polyolefins remained generally range-bound, with weak support from the cost side. On the supply side, new capacity is still being released recently, while demand lacks significant highlights. Overall, with the support of maintenance and losses, the market continues to trend weakly. For PP, China's polypropylene commercial inventory decreased by 7.81% week-on-week last week, with total producer inventories down 8.42% week-on-week. Trader inventories fell by 7.31% week-on-week, while port warehouse inventories dropped by 2.92% week-on-week. By product category, homopolymer inventory decreased by 2.59% week-on-week, and fiber-grade inventory declined by 16.04% week-on-week.

On the supply side, the No. 1 ethylene plant of Dushanzi Petrochemical with a capacity of 70,000 tons/year and the PP unit of Hainan Ethylene with a capacity of 300,000 tons/year have started operation. The No. 5 line (300,000 tons/year) PP unit of Yulong Petrochemical is under maintenance shutdown. The PP unit of Beihai Refining and Chemical (200,000 tons/year) is also under maintenance shutdown. The daily production proportion of draw has decreased by 2.74% to 25.28%. The three-line 500,000-ton/year facility of Inner Mongolia Baofeng plans to start production, but future maintenance periods for these facilities will partly offset the supply pressure brought by new facilities coming online.

On the demand side, the raw material inventory days for large enterprises in the plastic weaving sample increased by 2.08% compared to last week; the raw material inventory days for BOPP sample enterprises rose by 0.20%. The raw material inventory days for modified PP increased by 2.16% compared to last week. Downstream procurement remains primarily rigid, with demand follow-up falling short of expectations, leading to slower inventory digestion. Due to global economic weakness and the impact of overseas tariffs on some downstream export orders, coupled with the dual pressure of shrinking domestic and international orders, downstream willingness to replenish raw material inventories remains low.

On the PE front, supply-side, the maintenance of Yulong Petrochemical's HDPE Line 1 was completed and restarted, while new maintenance began at Lanzhou Petrochemical's old full-density unit and Wanhua Chemical's LDPE unit. The capacity utilization rate for polyethylene dropped from 82.38% to 82.20%, a decrease of 0.18% month-on-month. On the demand side, the capacity utilization rate in the methanol-to-olefins (MTO) industry this week was 87.27%, down 2.28% month-on-month. Downstream factories are experiencing peak seasonal demand for ground applications, and operating rates are expected to maintain an upward trend. However, new orders are limited, leading to only a slight increase in operating rates, and sustained restocking efforts remain weak.

Strategy: Short-term supply maintenance is frequent, and demand has shown some improvement. Entering the peak season, demand recovery remains slow. Approaching the end of the month, upstream petrochemical companies are actively destocking, while intermediate traders purchase goods to fulfill their plans, shifting inventory to the middle of the supply chain. Focus on the commissioning of new production capacities on the supply side and the recovery of demand. In the short term, the strategy for polyolefins remains short positioning.