China and Southeast Asia LDPE Film Markets Face Renewed Supply Pressure
Import LDPE film markets in China and Southeast Asia moved lower in the week ending July 18, after holding stable to firmer for several months. The decline came as more polyethylene plants returned from scheduled maintenance, while demand from downstream converters remained weak.
Market participants had already been expecting a correction. HDPE and LLDPE prices had started to weaken earlier, and buyers in the LDPE market were increasingly reluctant to build inventory. Most purchasing activity remained limited to immediate needs.
Returning plants increase supply
The main factor behind the latest price reductions was the gradual return of several LDPE units from maintenance.
According to market information available at the time, at least six LDPE plants with combined production capacity of more than 1.5 million tonnes per year were expected to resume operations during July. In Southeast Asia, PTT’s 345,000-tonne-per-year LDPE plant in Thailand was also scheduled to return from maintenance during the same period.
The supply outlook for August appeared less challenging. Only Sinopec Shanghai Petrochemical was expected to carry out maintenance on two LDPE lines, and the affected capacity was not considered large enough to create a significant supply disruption.
As more plants restarted, sellers faced greater pressure to compete for limited demand. This was particularly visible in the import markets, where buyers were able to delay purchases and wait for more competitive offers.
China market follows the broader PE downturn
Although LDPE availability in China was not considered excessive, the market eventually followed the weaker trend seen in other polyethylene segments.
Demand from downstream industries remained slow, partly because of the seasonal slowdown in manufacturing. Lower domestic prices also reduced the attractiveness of imported material, while the arrival of additional cargoes added to supply pressure.
Buyers were generally unwilling to commit to large volumes. Many expected prices to fall further and preferred to purchase only when necessary. The weak outlook for futures markets added to the cautious sentiment.
By July 18, import LDPE film prices for all origins were assessed at $1,110–1,210 per tonne on a CIF China, cash basis, down by $10–30 per tonne from the previous week.
Freight costs remain a mixed factor
Freight costs continued to influence the market, although their effect was less straightforward than earlier in the year.
Shipping rates had started to ease from their recent highs, which reduced some of the cost support for imported polymers. However, freight remained expensive compared with earlier levels and continued to limit the pressure on delivered prices.
Ethylene prices also provided some support. Spot ethylene on a CFR China basis was assessed at $860 per tonne on July 18, largely unchanged from the previous week. However, ethylene values had not shown a strong recovery since their decline in mid-June, leaving producers with limited room to push for higher polymer prices.
China’s weaker-than-expected economic performance also affected market sentiment. Slower domestic consumption and soft demand for consumer goods made converters more cautious about replenishing raw material inventories.
Southeast Asian demand remains under pressure
The same combination of weak demand and increasing supply was visible in Southeast Asia.
Several Middle Eastern and Asian plants had resumed production, which gradually improved regional availability. At the same time, converters were dealing with high freight costs and weak orders for finished products. This made them more hesitant to purchase additional LDPE.
Some producers attempted to keep their offers unchanged, pointing to high shipping costs and relatively stable upstream expenses. Other sellers reduced prices in an effort to attract buyers and improve transaction volumes.
Market participants described demand as weak, with buyers placing bids below sellers’ initial offers. The strength of the US dollar and slower economic growth across parts of Southeast Asia also limited consumption of polymer-based consumer products.
Import LDPE film prices in Southeast Asia were assessed at $1,180–1,320 per tonne on a CIF Southeast Asia, cash basis, down by $30–60 per tonne from the previous week.
Outlook remains cautious
The short-term outlook for LDPE film markets in China and Southeast Asia remained under pressure at the time of the assessment.
The return of production units from maintenance was expected to improve availability, while demand was unlikely to recover significantly during the seasonal slowdown. Lower domestic prices, additional import arrivals and cautious buying could create further pressure on spot values.
Freight costs and ethylene prices may provide some support to sellers, but these factors are unlikely to offset weak consumption unless downstream orders improve.
For the near term, buyers are expected to continue purchasing on a need-only basis. A meaningful recovery would require stronger converter demand, improved economic conditions and a clearer reduction in available supply.
