China’s LDPE and LLDPE Film Prices Reach Multi-Year Highs Amid Prolonged Rally

China’s polyethylene (PE) film market has largely continued its upward trend since early July, with only short-lived periods of weakness and a pause during the National Day holiday interrupting the rally.

Recent price increases over the past two weeks have lifted average domestic and imported LDPE and LLDPE film prices to their highest levels in approximately four-and-a-half to five years. Domestic HDPE film prices have also advanced, with the midpoint reaching a five-month high. Rising crude oil and feedstock costs, supply disruptions and production limitations have supported the market. However, buying activity remains largely driven by immediate requirements, as buyers balance higher replacement costs against cautious demand.

LDPE and LLDPE record the strongest gains

Domestic price assessments for the week ending October 23 show that LDPE film prices have climbed by more than 43% since early July. This represents an increase of CNY3,775/ton ($566/ton) compared with levels recorded before the rally began.

LLDPE film prices rose by 31%, gaining CNY2,300/ton ($345/ton) over the same period. HDPE film prices recorded a more moderate increase of CNY1,725/ton ($259/ton), equivalent to nearly 22%.

Following the two weeks after the National Day holiday, average domestic LDPE and LLDPE film prices reached peaks not seen in four-and-a-half to five years. Meanwhile, the midpoint of domestic HDPE film prices advanced to its highest level in five months.

Imported material prices have followed a similar upward path. LDPE film prices increased by more than 26%, or $295/ton, from their early-July pre-rally levels. Imported LLDPE film prices also gained 26%, adding $245/ton, while HDPE film prices rose by 20%, equivalent to $195/ton.

The stronger increases in LDPE and LLDPE compared with HDPE underline the differences in price performance across PE grades. Despite the substantial gains, market participants remain uncertain about the rally’s potential to continue, as elevated replacement costs are met with restrained downstream purchasing.

Higher feedstock costs and supply limitations support prices

Upstream cost increases have been a major factor behind the sustained rise in PE prices. Although Brent crude futures have experienced considerable volatility, prices have remained firm over the past two weeks, hovering around the significant $115/bbl level and trading above the previous week’s average, which marked a six-month high.

Spot ethylene prices on a CFR China basis have also generally moved sideways to higher since early July, declining in only three weeks during this period. Prices have increased by 44%, or $360/ton, from their last levels before the upward trend began. However, the latest gains have been more moderate, bringing prices back toward levels seen in late September.

A trader said concerns about rising PE production costs had intensified. A buyer also reported that Middle Eastern offers had increased amid stronger crude futures and higher Asian naphtha and ethylene prices.

A trader dealing in Saudi Arabian cargoes attributed the sharp rise in costs to the escalating conflict in the Middle East, pointing to intensified tanker attacks in the Strait of Hormuz. However, another trader cautioned that significant cost volatility was making it harder for supportive market factors to drive further gains, while overall market confidence remained weak.

Supply-side challenges have also helped sustain prices. Maintenance shutdowns, lower operating rates and logistical disruptions in China and across international PE supply chains have supported inventory management by producers and restricted spot availability.

Nevertheless, some market participants expect supply conditions to ease. One trader noted that several production units were scheduled to restart, which could increase material availability.

Seasonal demand offers limited support as buyers remain cautious

Purchasing sentiment improved somewhat earlier in October as buyers prepared for the National Day holiday and seasonal demand provided additional support. Greenhouse film manufacturing continues to contribute to demand during its peak season.

However, activity across other downstream industries remains subdued. Many buyers are limiting purchases to essential requirements rather than building inventories at elevated prices.

A trader confirmed that orders from the greenhouse film sector were accumulating but added that buyers remained cautious about purchasing material at current high price levels.

The market therefore faces competing pressures: rising crude oil and feedstock costs, along with restricted supply, continue to underpin prices, while limited buying appetite and the possibility of increased supply following plant restarts may constrain further gains.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.