LDPE retains premium over other PE products in Asia

In Asia, LDPE film continues to trade at a premium when compared with other PE products such as LLDPE film and HDPE film. Most sources attribute the ongoing relative strength of the LDPE film market to comparatively tight supplies for this product, with players commenting that a large amount of new LLDPE and HDPE film capacity has been coming on-line for the past two years while relatively few additional LDPE film capacities have come on-line over the same period.

According to data from ChemOrbis Price Wizard, import LDPE film has traded at an average premium of $201/ton over HDPE film on a CFR China, cash basis over the past ten weeks, with the premium showing a tendency to move higher over the past few weeks. From a ten-week low of $157/ton in early August, the LDPE/HDPE film premium rose to a ten-week high of $232/ton earlier in September before falling back to $228/ton last week. Looking at data for the entire year of 2010, the LDPE film/HDPE film premium in China has fluctuated between $150/ton to just over $250/ton for the entire period, with LDPE/HDPE film deltas of $100/ton or less having last been seen in the closing weeks of 2009.

Over the same period, data from ChemOrbis Price Wizard show that the premium between LDPE film and LLDPE film has averaged $153/ton on a CFR China, cash basis, with the premium dipping to a ten-week low of $111/ton in early August, rising to a ten-week high of $177/ton earlier in September and then falling back to $173/ton last week. Looking back over data from the whole of 2010, LDPE film has maintained a premium of around $75-180/ton over LLDPE film, with premiums below the $75/ton mark last being observed in the closing weeks of 2009