1. Maintenance Peak Over, June Supply to Recover Significantly
According to SCI99 statistics, in May 2026, PE petrochemical plants under maintenance had an annual capacity of 13.905 million tons, with monthly maintenance losses at 668.8kt, down 32.5kt month-on-month but still at yearly highs. Entering June, PE maintenance losses are projected to drop to 482kt, a sharp reduction of 186.8kt or 27.9% from May. No new capacity launches are planned for June, but utilization of existing capacity will increase notably.
| Item | May Actual | June Forecast | Change |
|---|---|---|---|
| Maintenance Loss (kt) | 668.8 | 482 | -186.8 |
| Capacity Affected (kt/yr) | 13,905 | — | Decreasing |
| New Capacity | None | None | — |
2. Cost Support Loosens, Industry Chain Profit Redistribution
US-Iran negotiation expectations have pushed international oil prices lower from highs, with WTI posting a monthly decline of 16.86%. Cost-side support for PE prices has loosened noticeably. In the oil-to-naphtha-to-ethylene transmission chain, the decline in upstream costs has not been proportionally passed to downstream; intermediate segment profits have recovered somewhat, but PE producer profit improvement remains limited. While tight supply during May maintenance supported prices, if demand does not follow supply recovery in June, profit gains may be offset by supply increases.
Notably, the May agricultural film sentiment index was only 10.1, down 19.9 month-on-month, reflecting that agricultural film demand had entered a quiet period with overall orders continuing to decline from April. Most factories reduced operating rates or shut down for the off-season. June agricultural film demand is expected to remain low, with negative demand-side feedback continuing to suppress PE price upside.
3. Supply-Demand Analysis: Supply Recovery Meets Demand Vacuum
The core contradiction facing the June PE market is that supply recovery outpaces demand improvement. On one hand, the restart of maintenance units brings approximately 186.8kt of supply increment; on the other, the agricultural film off-season persists with downstream factory operating rates low and weak raw material procurement appetite. Additionally, falling crude prices further weaken cost support expectations for PE, and the buy-on-dip mentality downstream will intensify destocking pressure.
Looking at overall petrochemical performance, 66.7% of 42 monitored products declined in the week of May 29, with a clear weak trend across chemicals. Intermediate products like pure benzene are under pressure, and the dual pressure of loosening costs and negative demand feedback means PE cannot find effective support in the short term.
4. Market Forecast
The June PE market is expected to trend weakly with range-bound trading. On the supply side, the 186.8kt reduction in maintenance losses will significantly increase supply pressure; on the demand side, the agricultural film off-season combined with cautious downstream procurement will limit upside; on the cost side, crude oil price decline expectations are still being digested. Price-wise, LLDPE front-month contracts are projected to oscillate in the 7,800-8,300 CNY/ton range, while LDPE and HDPE may see varied impacts due to maintenance-related product differentiation, with some grades potentially offering minor rebound opportunities. Focus should be on mid-June maintenance restart progress and downstream restocking pace. If restocking demand concentrates, a phased rebound may occur.
