Analysis on the substitution of PE and recycled PE in 2021

Recycled PE is a substitute for PE. Because of their similar downstream uses (recycled PE is mainly concentrated in the fields of film, injection molding, pipes, hollowing, etc.), there is a certain substitution relationship (except for food and medicine), and their consumption The structural regions also have a high degree of similarity (the recycled PE industry has a high regional concentration, mainly distributed in East China, South China, and North China), as products that are mutually substitute products.

As can be seen from the 2017-2021 price difference between new materials and recycled materials, the trend is "V"-shaped. Basically, the price trend of recycled PE follows the price trend of new materials. The high value of the price difference reaches 2,612 yuan/ton, and the price difference is low. The value reaches -130 yuan/ton. There is a price difference between the price of PE and recycled PE, and the reasonable range of the price difference is about 1000-1500 yuan/ton. The price difference is an important factor affecting the purchase of manufacturers. Generally speaking, when the price difference is large, manufacturers will focus on purchasing recycled PE because of cost savings, and when the price difference is small, manufacturers will focus on purchasing PE for product performance and cost-effectiveness. In actual production, manufacturers can choose according to product characteristics. In some areas, recycled PE has a certain price advantage, but in more production areas, PE is irreplaceable.

In 2021, the overall trend of the price difference between PE and recycled PE shows an "N" pattern. The price difference between the two has expanded compared with previous years. The high value of the price difference during the year appeared at the beginning of October at 2612 yuan/ton, and the low value of the price difference during the year appeared at the beginning of June at 880 yuan/ton. Ton. At the beginning of January-March, under the tight supply side and rising futures, the price of PE increased significantly, and the price difference between new and old materials widened. Therefore, some manufacturers made more enquiries on the recycled PE market. From mid-March to mid-June, as the devices were put into operation one after another, output and supply increased, but demand changed little. PE entered a downward trend. In mid-to-late June, the price difference between new and old materials reached a low value during the year, and some manufacturers' demand for PE increased. From July to August, the price difference between new and old materials widened, and some manufacturers increased their demand for recycled PE. From September to mid-October, the traditional peak season for demand boosted, downstream demand rebounded, and the price difference between new and old materials exceeded a reasonable range, and the price difference reached 2,612 yuan/ton. Manufacturers are more enthusiastic about purchasing recycled PE. After mid-October, the price difference between new and old materials gradually returned to a reasonable range.

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