Polyethylene: a brief introduction to the seasonal factors affecting the demand for plastic agricultural film

- May 30, 2019-

As we all know, polyethylene is used in the production of agricultural film. What are the influences of the seasonal demand of agricultural film?

Let's first look at the advantages of LLDPE.

The advantages of LLDPE

Compared with LDPE, LLDPE has a higher softening temperature and melting temperature, with great strength, toughness, rigidity, heat resistance, cold resistance and other advantages, but also has a good resistance to environmental stress cracking, impact strength, tear resistance and other properties, and acid, alkali, organic solvents and so on.

At present, it is widely used in industry, agriculture, medicine, health and daily necessities.

LLDPE has penetrated most of the traditional markets of plastics, including film, injection molding, wire and cable sheath, pipe, hollow container, etc.

China is the world's largest consumer of agricultural film, although in recent years, the domestic agricultural investment has been increasing, but due to the close to saturation of film and film coverage area, the new coverage area began to decline significantly.

Seasonal characteristics of agricultural film production

In China, the production of agricultural film has obvious periods of low and high season, which is mainly determined by the different production cycles of various agricultural products, and the specific purchase time of agricultural film dealers also has an important impact on the production of agricultural film, most agricultural film manufacturers' production scheduling plans are arranged according to the orders of agricultural film dealers.

For agricultural film dealers, they are mainly based on raw materials (mainly LLDPE and LDPE) market trend to determine the hoarding film intensity, when the raw material price is relatively low, agricultural film dealers will increase the hoarding film intensity, and in the raw material is relatively high, agricultural film dealers use the "cash and sell" way to purchase agricultural film manufacturers.

In addition, the uncertainty of purchasing time of agricultural film dealers also leads to changes in the off-season season of agricultural film production every year, which also leads to changes in the time of demand for LLDPE.

Based on this, we can classify the production season as follows:

Production of shed film: it starts from June to July every year, and starts from shandong province in August. The sales of shed film gradually enters the peak season, and dealers' purchase volume is enlarged. The production of shed film also reaches the peak season from September to October.

The production of film usually lasts until the Spring Festival.

Garlic film: production starts from mid-august to mid-september, and lasts for about a month.

Spring film: every year from December to January is the beginning time of spring film production, in February to march into the production season, followed by the middle of march to May Day, is the spring film sales season.

Enter may, most agricultural film production enterprises stop production, machine maintenance.

According to zhongyu, the follow-up of agricultural film orders in December 2018 was a little slow, among which the order of plastic film decreased due to the weakening demand in the northern market.

Mulch orders slightly follow up, but the overall follow up is not as expected by the manufacturer.

Analysis of the influence of seasonal demand on domestic polyethylene trend

Since the listing of linear futures, the price fluctuates frequently.

Next, we analyze the seasonal trend of plastics from the perspective of seasonal demand, combined with the futures market in 2018.

First of all, driven by seasonal demand in the first half of 2018, the main contract of L has a small rebound.

Second, in August 2018, L futures price also went out of a wave of rebound market under the seasonal demand speculation, * hit 9870 yuan/ton;

Moreover, in October 2018, the L futures price again reached 9,840 yuan/ton.

As the raw material of polyethylene production, the fluctuation of crude oil has a great influence on the future price of L. However, when the industrial demand is stable, the seasonal demand of agricultural film is also one of the important factors affecting the trend of plastics.

Through analysis, we can see that the plastic production cycle and seasonal demand factors have a greater impact on its price.

In the case of upstream raw material stabilization, LLDPE will usually show the price and volume rise in the peak consumption season, on the contrary, the price and volume fall in the low consumption season.

On the whole, the seasonal demand factors of agricultural film still play a certain role in influencing LLDPE price.