The domestic market for low-density polyethylene (LDPE) in China remains firm since April. Due to decreasing availability of domestic and imported products, perceptions of tight supply are heightening.

In China, as LDPE facilities have been undergoing regular maintenance since April, supply is tight. According to sources, facilities with a total capacity of 2.2 mil tons had undergone regular maintenance from April through August. These facilities are located across a large area including North China, East China and South China, etc., and LDPE supply was affected in each area. Apart from that, most polyethylene facilities newly constructed in China in 2020 produce high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) and some LDPE facilities are scheduled to start up early next year.

Regarding imported products, shipments for Iranian products was delayed on the back of economic sanctions on Iran by the US and a sense of tight supply is strong. China's LDPE imports are mostly from the Middle East such as Iran, Saudi Arabia and Qatar. In particular, the majority are Iranian products.

As for demand, operating rates at derivative makers have recovered since March and buying inquiries for LDPE are increasing. Further, demand for agricultural films increased from August and supply/demand is expected to strengthen going forward. Nevertheless, during the October to December period, regular maintenance in China will be completed and Iranian products will also be unloaded. Thus, sources perceive that tight supply might recede. Along with this, some sources said that the rise in the market may not last.