LDPE Coating Materials Imported to Meet Demand

By Weng Rufang, Dong Weimin, East China Branch of Sinopec Chemical Commercial Holding Co., Ltd.

China makes 130-140 kt/a of LDPE (low density polyethylene) coating materials now. The main type is 1C7A, produced by Sinopec Beijing Yanshan Petrochemical Co., Ltd. Other domestic types include H188 (1C7A-1), 1C7AS and 18G. Sinopec Beijing Yanshan Petrochemical Co., Ltd. has the high-pressure autoclave technology in China, which can produce high-quality 1C7A type LDPE coating material. Due to the advantages of this method, the product has stable performance and is widely recognized by users.
Due to China’s limited capacity to make LDPE coating material, over 55% of the huge domestic demand is satisfied mainly by imports.
Foreign raw materials commonly used in the domestic market include LB7500 from LG Chemical, XL600 and XL610 from Lotte of Korea, L712 from TPC of Singapore, 19N430 of INEOS, 955 from Korean Hanwha, D777C from Thailand, 0710 from Qatar, WNC199 from Australia, 6520G from Formosa Plastics Group and 722 from Dow Chemical of the United States, etc. Among those, 19N430, LB7500 and Dow Chemical’s 722 are used mainly to package liquids, and D777C, 955 and XL600 are used mainly to coat paper cups. China imports 180-200 kt of LDPE coating material each year.

Demand has great
growth potential

LDPE coating material is used mainly in the packaging sector, for liquid aseptic packaging, composite flexible packaging and other industrial packaging. In recent years, a wide range of manufacturers pay great attention to product packaging, and the development of the packaging sector has greatly promoted consumption of extrusion-coating grade LDPE special resin. Domestic demand for LDPE coating material is conservatively estimated at around 350 kt/a.
In making coated papers, cups and bowls, LDPE coating material is used mainly as the protective layer and heat sealing layer, the annual demand is around 60-80 kt, and high-end coating materials such as 1C7A, 19N430, 955 and 722 are mainly used.
Label transfer film, also known as self adhesive labels and instant stickers (JAC), is a very large market; however, due to the high cost of the best-suited LDPE, small and medium enterprises use other non-coating grade LDPE products as alternatives – mainly imported low-end coating materials.
The manufacture of woven bags and other sundry goods packaging is concentrated mainly in Jiangsu and Zhejiang provinces, especially in Wenzhou. It is estimated that domestic demand for LDPE coating material in making woven bags is over 80 kt/a. At present, players mainly use cheap, imported XL600 and 801YY. In addition, large amounts of 2426H, LD100AC and 18D are used in preference to higher-cost coating materials.
In the liquid aseptic packaging sector, which has higher technical requirements, LDPE is mainly used in the packaging of drinks such as dairy products and beverages, in branded packaging products such as Tetra Pak and Combibloc. In recent years, the demand has climbed gradually.
Users have higher requirements on the coating performance of products and mainly use imported coating materials like 19N430 of INEOS, 955 of Korean Hanwha and 722 of Dow Chemical. It is estimated that the demand for LDPE coating material in the liquid aseptic packaging sector is more than 60 kt/a.
Around 22% of coating polymers is used in the extruded composite flexible packaging sector – in papers, aluminum foil and coating materials sold for the packaging of food, medicines and personal care products.
Different domestic types of LDPE meet the needs of different markets. The application of 1C7A in the coating material has a certain advantage due to its excellent production process. The product quality is good. The product is comparable with imported products and is widely accepted by customers. With the growth of demand for drinks like milk and fruit juice, the requirements on product packaging get higher and higher. As upgraded versions of 1C7A, H188 and 1C7AS have an excellent high-speed processing performance, with significantly higher processing speed. Due to the high cost, producers generally use the lower-cost resin products, both domestic and foreign, as substitutes. Here in China, the use of LD100AC and 2426H as coating materials is concentrated mainly in Zhejiang province.
As of the end of April 2016, China’s capacity to make PE (polyethylene) was close to 16 million t/a, with full density PE being 41% of that, and HDPE (high density polyethylene), LLDPE (linear low density polyethylene) and LDPE being 31%, 13% and 15%, respectively.
As of the end of 2015, China hosted 1.99 million t/a LDPE capacity, which will increase by 570 kt/a (28%) in H1 2016 and by 1.14 million t/a (57%) during the whole year of 2016.
According to the price changes of LDPE coating material in the last two years, it is not difficult to see that in the context of low oil prices, LDPE coating material, with its high added value, has a strong ability to resist price reduction. With the startup of LDPE new capacity, the competition with conventional film materials will be fiercer. Steadily increasing output of 1C7A helps to improve the benefits of the product, and players should gradually use advantages of price, geography and after-sales services to displace imported products in the domestic market.