A critical shift has occurred in China’s domestic polyolefin market. Sinopec Yangzi Petrochemical, a core polyethylene (PE) supplier in East China, has shut down all its PE production units with no definite restart schedule. The unexpected supply disruption has triggered widespread ripple effects across the plastic sector and reversed the mild correcting trend of regional PE spot prices.
Verified by multiple industry sources, the comprehensive outage is not caused by sudden equipment failure, but scheduled routine maintenance and systematic equipment upgrading. Four PE units in total are offline, covering three high-density polyethylene (HDPE) lines and one full-density polyethylene line, with a combined annual production capacity of 500,000 tons.
Each unit has an independent shutdown timeline:
Up to now, Yangzi Petrochemical has not released official restart timetables for any of the four units, meaning a long-term regional supply gap will persist in East China.
As a flagship Sinopec facility in East China, Yangzi Petrochemical dominates the Yangtze River Delta PE market, with high market shares in pipe-grade, wire-drawing grade and injection-grade polyethylene materials. Its full shutdown has led to a sharp contraction of local spot supply in East China.
On June 12, regional spot prices surged amid bullish market sentiment. East China PE spot prices rose by 50 to 100 RMB per ton on average. Linear low-density polyethylene (LLDPE) mainstream spot quotations broke through 8,300 RMB per ton. Tight supply intensified for HDPE wire-drawing materials, which already maintained low social inventory before the outage. Some regional traders suspended quoting prices and adopted wait-and-see strategies due to scarce high-quality spot resources.
Industry analysts point out that Yangzi Petrochemical’s prolonged outage has broken the original supply-demand balance of East China’s PE market. To fill the local supply shortage, PE spot stocks from North and South China will gradually flow to East China. The cross-regional cargo diversion will raise inbound logistics costs for East China buyers and accelerate inventory destocking across nationwide regional markets.
Market participant sentiment has changed significantly. Traders hold strong inventory reluctance with broad expectations of further price hikes. Downstream plastic processors have accelerated raw material procurement to hedge rising cost risks, boosting overall trading activity in the spot market.
With uncertain restart schedules for Yangzi’s PE units, East China and nationwide PE markets will face solid supply-side support in the short term. If downstream end-user purchasing demand remains stable, domestic PE spot prices will keep fluctuating upward. The market will show a rigid pattern with easier price hikes than declines for the late second quarter.
