LDPE Coating Price Rises on Supply Concerns Roused by Maintenance and Production Switch Plans
Introduction: China’s LDPE market price showed a strong trend after the Chinese New Year holiday, with the coating grade showing even greater strength with its specialized use. The price increase was primarily driven by the anticipation of tighter supply and the upward movement of international oil prices, which collectively uplifted market sentiment. The supply is envisaged to remain stable in late February with little inventory pressure, and demand may continue to recover. Therefore, LDPE prices are projected to hover at highs.
Coating Grade Price on a Rise, Widening Gap with Film Prices
China’s LDPE market has shown a strong trend recently. Coating grades, as specialized products, have shown a relatively stronger performance, increasing the price spread with general-purpose film materials. As of February 12, the price of Chinese-made LDPE coating materials in East China rose to around RMB 13,500/mt, which increased by 9.76% from the first trading day after the Chinese New Year holiday, while Chinese-made LDPE film materials climbed to around RMB 10,250/mt, a rise of 4.33% compared to the first day after the holiday. The price spread between the two exceeded RMB 3,000/mt. Meanwhile, the price of imported coating materials in East China was in the range of RMB 12,700-12,800/mt, with an increase of about 5% compared to the first day after the holiday. However, imported resources still maintained a price advantage of RMB 700-800/mt over Chinese-made materials, providing downstream processing enterprises with opportunities for arbitrage in feedstock procurement.
The increase in prices was mainly driven by the anticipations of tighter supply and the lifting of market sentiment due to rising international oil prices.
Supply: Unit Maintenance and Production Switch Plans Trigger Supply Anxiety
Currently, the production of LDPE coating materials is stable with no signs of shortage. The price increase is principally driven by the anxiety caused by future maintenance schedules and plans for production switches.
There are five domestic LDPE coating material producers which are Sinopec Yanshan Petrochemical, Zhongtian Hechuang Energy, PetroChina Daqing Petrochemical, and joint ventures BASF-YPC Company and CNOOC and Shell Petrochemical, with a total capacity of 1,255kt/a. Data monitored by SCI indicates that the output of LDPE coating materials is relatively stable, averaging around 20kt per month with minor MoM fluctuations.
After the Chinese New Year, the production share of LDPE coating material in China remained relatively stable, between 0.69% and 0.88%, which is moderately high. China’s LDPE coating material output in February is estimated at 25.1kt, a 0.46% increase from January 2025 and a 13.4% increase compared to the same period in 2024. Looking at production shares, Sinopec Yanshan Petrochemical has the highest at 55.52%, followed by Zhongtian Hechuang Energy at 31.41%, and PetroChina Daqing Petrochemical at 13.07%. BASF-YPC Company and CNOOC and Shell Petrochemical have no current production schedules.
Market research by SCI indicates that, as a leading LDPE coating material producer in China, Sinopec Yanshan Petrochemical has plans to switch its LDPE unit to EVA production in March and a scheduled shutdown in May. Moreover, 2025 is a year with an extensive schedule of maintenance shutdowns for overseas units, particularly concentrated in Q2. The market’s anxiety about future maintenance and production switch plans triggers the extensive price increase of LDPE coating materials.
Cost: Brent Crude Oil Up 0.76%, Strengthening Cost Support
International oil prices have recently shown signs of rebound, providing cost support to the PE market through the transmission from the naphtha-ethylene industrial chain. As of February 12, Brent crude oil closed at $75.18/bbl, up 0.76% compared to the first day post-holiday. The primary reason for this is geopolitical disturbances, with the U.S. imposing restrictions on a Middle Eastern country in hopes of curtailing its oil exports. Moreover, existing sanctions are eroding the oil flow from a certain European country, leading to a resilient Asian crude oil market. Concerns within the market have triggered a consistent rebound in oil price from its low point.
International Oil Price
Source: NYMEX, ICE
Market Forecast: LDPE Coating Material Prices Expected to Remain High in the Short Term
Prices of LDPE coating materials are predicted to remain high in late February. In terms of supply, Sinopec Yanshan Petrochemical’s old LDPE line has a production switch plan for 1C7A to 112A-1 towards the end of February, while other LDPE coating producers are expected to maintain stable production. Ships from the Middle East and the U.S. are due to arrive towards the end of the month, but their impact on the supply of LDPE coating materials is considered to be minimal. Overall, a stable supply of LDPE coating materials with little pressure is anticipated for the latter part of February. In terms of demand, downstream producers gradually resumed operations after the Lantern Festival (February 12, 2025), creating a need to restock. Additionally, with market sentiment being influenced by expectations of a tightening supply, LDPE coating material prices are expected to remain high. In the longer term, with many domestic and international shutdowns expected in Q2, the market still has room for an upward price trajectory. It’s worth paying attention to the maintenance and production switch plans of the units and downstream producers’ feedstock procurement.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
