Import LDPE film outperforms HDPE, LLDPE film in China

In China, import PE sentiment has stayed firm amid the beginning of the September-October peak season, with last week’s prices resuming a stable to higher trend following two weeks of stability. In the meantime, LDPE film fared better than HDPE and LLDPE, with prices posting larger gains of up to $40/ton and reaching the highest level since April, the weekly average data from ChemOrbis show.

Besides tighter availability and expectations of better demand, LDPE’s more robust performance relative to other grades has also been attributed to positive macroeconomic factors and higher energy values.

Affirming this, a major Saudi Arabian producer also hiked September PE offers to China sharply by $70/ton for LDPE film While LLDPE film offers were being raised by a smaller scale of $30-40/ton. Meanwhile, the producer skipped HDPE offers for another month amid stock issues.

LDPE regains ’s premium over HDPE

LDPE film mostly traded below HDPE film in the past more than three months, according to data from ChemOrbis Price Index. However, it has regained the traditional premium over the latter in tandem with the latest bullish trend.

ChemOrbis data reveals that the premium import LDPE film prices carry above HDPE film is currently at $20/ton, the highest figure since the end of April.

During the week ended on September 1, the overall import PE prices were assessed $30-40/ton higher at $970-1040/ton for LDPE film, stable to $10/ton higher at $920-1000/ton for LLDPE film and $950-1020/ton for HDPE film, all on a CIF China, cash basis.

Peak season underpins sentiment

The strength of the LDPE market was attributed to the positive impact of the seasonal pattern, with higher orders being seen in the agricultural film industry.

An agent of the major Saudi producer said, “The agricultural film industry has seen new orders follow up lately as the off-season for greenhouse film demand is transitioning into the peak period. Looking ahead, as the mid-September holidays approach, demand from various industries will gradually catch up, leading to a noticeable increase in operating rates among manufacturers. With the accumulation of orders, production will continue to rise, providing support for prices.”

Low supply pushes LDPE market up

The lack of supply pressure at home and talk about tighter LDPE availability also contributed to the upbeat sentiment in the import LDPE market. A source at a Taiwanese producer underlined, “We heard that the supply of LDPE film in China is short, so the prices for this grade have risen sharply.”

According to ChemOrbis Production News Pro, around 224,000 tons of LDPE production was estimated to be removed from the Chinese market in August, while around 198,000 tons was removed from the market in September.

LDPE prices may have room for further increase

LDPE prices are likely to be reinforced further by limited supply and incremental buying interest in this high season for agricultural films. In addition, the recent rally in crude oil on the prospect of extended OPEC+ supply cuts might lend additional support to LDPE film and the whole PE market in terms of higher production costs and firmer Dalian futures prices.