LDPE Market to Be Shared by Three Types of Products
Click:0    DateTime:Mar.10,2022

Tan Jie, Sinopec Maoming PC Research Institute

Low density polyethylene (LDPE) is raw material of films, injection molding products, medical appliances, pharmaceutical and food packaging materials and blow molding hollow molding products. It has a bright future in sectors like agriculture, packaging industry, electrical and electronic engineering, machinery and equipment, automobile manufacturing and daily necessities.

Production situation

China has had many LDPE projects launched these years. In 2021 (2021 means by the end of September 2021 in this article), China’s LDPE capacity reached 3.693 million t/a, with Northwest China (including Gansu, Shaanxi and Xinjiang), its biggest LDPE production area having 1.07 million t/a, 28.97% of the total; East China (including Shanghai, Shandong and Jiangsu) having 998 thousand t/a, 27.02% of the total; North China (including Beijing and Inner Mongolia) having 750 thousand t/a, 20.31% of the total; Northeast China (including Heilongjiang) having 265 thousand t/a, 7.18% of the total; South China (including Guangdong) having 610 thousand t/a, 16.52% of the total. By provinces, Guangdong is the biggest, with 610 thousand t/a capacity, 16.52% of the total, followed by Jiangsu and Shaanxi, each having 600 thousand t/a capacity, 16.25% of the total. 

In 2021, Sinopec (including JVs)’s LDPE capacity was 1.808 million t/a, taking up 48.96% of the total; PetroChina 465 thousand t/a, 12.59% of the total; CNOOC 250 thousand t/a, 6.77% of the total; and others 1.17 million t/a, 31.68% of the total. By companies, BASF-YPC is the largest in terms of capacity, having 400 thousand t/a, 10.83% of the total; followed by Sinopec Yanshan PC, having 380 thousand t/a, 10.29% of the total; then ZTHC Energy, with 370 thousand t/a, 10.02% of the total. China’s LDPE producers are shown in Table 1 and geographic distribution of its capacities are in Chart 1. 

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Chart 1 China’s LDPE capacity distribution by provinces, 2021


Import & export

Despite of the stable growth of capacity and production, China is still short of LDPE supply, especially the high-end products, hence the large number of imports. According to Customs statistics, the figures increased from 2010’s 1.384 million tons to 2015’s 2.178 million tons, a YoY growth of 6.04%. The import volume dropped to 2.0523 million tons in 2016 and then rose again to 3.4306 million tons in 2019, with a YoY growth of 17.15%. In 2020, the number declined to 3.391 million tons, down by 1.17% over 2019, and during January to August 2021, the import amount decreased to 2.0971 million tons, down 0.71% YoY.

China’s LDPE export amounts have also changed largely, being 78.8 thousand tons in 2021, 59.5 thousand tons in 2015 (YoY growth of 20.93%), 83.2 thousand tons in 2020 (YoY decrease of 2.12%), and 106.6 thousand tons Jan-Aug 2021 (up 93.82% YoY).

1. Import analysis

China is mainly importing LDPE from Iran, Saudi Arabia, Qatar, UAE, Korea and the US, and the imports from these six countries reached 2.276 million tons in 2020, 67.12% of the total, down by 2.45% from 2019’s 2.3332 million tons. Iran, being the biggest import supplier, had 704.6 thousand shipments to China, taking 20.78% of the total and YoY down by 6.27%. Saudi Arabia, being the second largest, supplied 471.5 thousand tons LDPE, 13.9% of the total and YoY growth of 2.84%. Qatar ranks the third and the imports from it was 349.2 thousand tons, 10.30% of the total, up by 13.08% YoY.

Zhejiang, Shanghai, Guangdong and Shandong are four regions where imports were shipped into China, with total import volume reached 2.421 million tons in 2020, accounting for 71.39% of the total, and growing by 1.25% YoY over 2019’s 2.3911 million tons. 

LDPE imports via mode of general trade and mode of processing with imported materials reached 3.2482 million tons in 2020, 95.79% of the total imports, up by 0.05% over 2019’s 3.2467 million tons. General trade is the biggest importing mode, with the volume at 3.0022 million tons, 88.53% of the total, down by 0.57%. LDPE entering China via the mode of processing with imported materials was 246 thousand tons, 7.25%, YoY growth of 8.23%.

2. Export analysis

China’s major exporting markets of LDPE is Cambodia, Vietnam, Hong Kong, Malaysia, Korea, Thailand and Iran, with the exports to these seven markets reaching 41.6 thousand tons, 50.00% of the total exports, up by 0.48% over 2019’s 41.3 thousand tons. China exported 12.9 thousand tons LDPE to Vietnam, 15.50% of the total, a YoY growth of 63.29%; 6.7 thousand tons to Malaysia, 8.05% of the total and YoY down by 22.99%; 6 thousand tons to Hong Kong, 7.21% of the total, YoY down by 45.95%; 5.3 thousand tons to Korea, 6.37% of the total, a YoY growth of 120.83%; 3.8 thousand tons to Thailand, 4.57% of the total and YoY up 52.00%; 3.7 thousand tons to Iran, 4.45% of the total, YoY down 43.08%; and 3.2 thousand tons to Cambodia, 3.85% of the total and a YoY growth of 39.13%.

China mainly exports LDPE through Guangdong, Hebei, Shanghai, Jiangsu and Zhejiang, and the exports through these five regions in 2020 were 60 thousand tons, 72.12% of the total, up by 3.09% over 2019’s 58.2 thousand tons. 

The major export modes are general trade and logistics cargos in customs special supervision zone, and the exports via these two modes reached 63.1 thousand tons in 2020, 75.84% of the total, down by 6.10% from 2019’s 67.2 thousand tons. Exports via general trade mode was 47.6 thousand tons, 57.21% of the total, YoY up 10.44%; and shipments via the mode of logistics cargos in customs special supervision zone was 15.5 thousand tons, 18.63% of the total and down by 35.68% from 2019. 

Consumption situation

China’s LDPE apparent consumptions were increasing, from 2010’s 3.4162 million tons, to 2015’s 4.6545 million tons (growing at 13.53% YoY), and to 2020’s 6.2629 million tons, a YoY increase of 0.33%. The self-sufficiency has also been rising, 61.79% in 2010, 49.26% in 2015 and 47.18% in 2020. The detailed numbers are in Chart 2.

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Chart 2 China’s LDPE consumption situation, 2010-2020


In China, LDPE are usually applied to sectors of films, extrusion coatings, injection molding products, and wires & cables. In 2020, films and sheets consumed 71.0% of total LDPE supplies, injection moldings 9.5%, coating materials 8.0%, wires & cables 4.5%, pipes 4.0%, and others 3.0%.

Market prices

China’s LDPE market prices are decided by ethylene prices, demands and import prices. The market rose, declined and then rose again from 2016 to 2020. In 2021, the prices remained at highs, at RMB10 790/ton in January, RMB12 170/ton in March, and RMB11 100/ton in August, increased by 25.28% over 2020. The market is expected to fluctuate in a certain small range.  

Future development and suggestions

1. The market will see more projects being launched in the following years, including Zhejiang PC’s 400 kt/a line, Ningxia Baofeng Energy’s 250 kt/a, Shenhua Baotou Coal Chemical’s 250 kt/a, Xinjiang Tianli PC’s 200 kt/a, Sinopec Hainan Refinery’s 200 kt/a, and Fujian Gulei PC’s 300 kt/a. China’s LDPE capacity will reach 5.3 million t/a by 2025, with a demand of 6.8 million tons. As the supply will still be tight by then, more new/expansion projects with advanced technologies are needed. 

2. In spite of the capacity expansion, high-end LDPE products are still short and import dependent due to China’s current bottleneck situation of production technologies and homogenous products. Iran, Saudi Arabia, Qatar and UAE, on low raw material cost, will still be China’s main import origins. Zhejiang, Shanghai, Guangdong, Shandong, Jiangsu and Fujian have always been China’s plastics processing bases and will hence be major LDPE importing provinces. Attentions should be paid to the supply-demand situation of LDPE in import origins to avoid possible impacts on China’s LDPE industry and market. 

3. With the continuous improvement of production technology and product quality, and lower production costs, China's LDPE exports will increase, but to a limited extent due to the constraints of product varieties.

4. The largest consumers of LDPE in China are still packaging films, construction films, agricultural films, food wrap films and other film products. In certain markets, LDPE will be confronted with the competitions from linear low-density polyethylene (LLDPE) and biaxially oriented polypropylene (BOPP). From the growths of its derivatives, films & sheets and pipes are growing slightly faster than LDPE while cables’ growth declined. And despite of the competitions, LDPE consumptions in fields of food and health will still increase. Meanwhile, China's urbanization process is accelerating, so are the supporting infrastructure constructions. Thus, the demand for pipes and hence for LDPE will be driven. The consumption proportions of the main downstream will increase slightly, without a huge change in the consumption structure.

5. With the diversification of chemical raw materials, China’s LDPE market will be occupied by naphtha-based products, MTO processed products and imports. 

6. China's LDPE industry should continue to improve the technology, reduce costs, enhance product quality and accelerate the R&D of new products to enable a healthy, steady and rapid development.