In March 2018, the market did not usher in the demand for Xiaoyangchun. Polyethylene prices fell sluggishly and transactions remained weak. High inventory pressures have not been eased. The Fed raised interest rates in March to meet market expectations, and the macroeconomic focus is on Sino-U.S. trade war. US President Trump announced that it will impose punitive tariffs on Chinese goods worth as much as US$50 billion (approximately RMB 316.5 billion). The Ministry of Commerce of the People's Republic of China has issued 232 measures to import steel and aluminum products from the United States. Suspended the list of concessional products and proposed to impose tariffs on approximately US$3 billion in imports from the United States.
Institutions interpret Sino-U.S. trade as competition for jobs. It is expected that if China and the United States set a 30% tariff and non-tariff mixed trade war, China’s manufacturing output and employment will decline by 4.622% and 3.093%, respectively. The U.S. manufacturing output Employment dropped by 1.412% and 1.906% respectively. A war without gun smoke was interpreted as a concern for systemic risks in financial markets, both commodity futures and stock markets fell. In the confrontation between national policies, there is a need for continuous attention to news. On the domestic side, the main focus is on the issue of tight monetary balance. The high cost of capital has put pressure on the company's reserve inventory, and some companies have the need to cash out.
Affected by systemic risks, the polyethylene market once again passed the black Friday on March 23, and the commodity market fell across the board. Polyethylene futures and spot prices were not spared, and the prices quickly declined, especially coal chemical products.
In April, domestic Sichuan Petrochemical, Shenhua Yulin, Zhenhai Refining, and Shanghai Petrochemical have maintenance plans, and the supply is expected to decrease. However, high inventory pressure remains in March. Demand for plastic film and greenhouse films enters the off-season, and began in late March. The trade war between China and the United States and the tight balance of China's currency continue to constrain demand recovery, and it is expected that the market will not be able to do optimistic expectations in April. Considering the declining prices in the previous period, as prices fall, they may stimulate demand at a certain time. Staged small rebound is still in place, and the overall trend is biased.
