Chinese LDPE prices on the rise after four months of consecutive decline

Chinese domestic prices of low-density polyethylene have rebounded after four months of consecutive decline -- fueled by concerns over the unrest in Iran, according to sources.

Platts, part of S&P Global Energy, assessed Chinese domestic LDPE up Yuan 1,080/mt week over week Jan. 15 at Yuan 9,300/mt ex-works east China.

Platts also assessed LDPE CFR Far East Asia up $10/mt week over week at $910/mt.

Market sources said that concerns over unrest in Iran were causing prices to surge.

China imports substantial quantities of Iranian HDPE and LDPE, so any supply disruptions in Iran could have a significant impact on the Chinese market, trade sources have said.

According to Chinese trade data, Iran was the second-largest supplier of LDPE to China in the first 11 months of the year, after the UAE. Iran supplied a total of 407,450 mt of LDPE, making up 14.1% of total LDPE imports into China.

For HDPE, Iran was the fifth-largest supplier in the period, supplying 523,345 mt, or 10.7% of total HDPE imports into China.

"Domestic prices rose across the week and overseas suppliers are also considering gradually increasing prices," said a Chinese trader. "Customers are making purchases gradually as well. But let's see how long this trend lasts."

Several market sources said they believe the bull run may be short-lived as it has been driven primarily by speculation and shifts in market sentiment, with no underlying support from fundamental demand-supply changes.

"There's a need for some price adjustment; it seems that there has already been a small decline in prices this afternoon. The rise was too fast, and short-term demand has become saturated," a Chinese trader said.

Prior to the rebound, prices were declining due to Chinese LDPE capacity expansions slated to start up at the end of 2025 and continue into 2026, as well as slow demand.

Prices hit $890/mt on Jan. 2 before picking up again Jan. 7. This was the lowest level since July 4, 2023, Platts data showed. In the domestic market, prices hit a five-year low of Yuan 7,954/mt on Dec. 24 -- the lowest level since July 1, 2020.

According to analysts at S&P Global Energy, nameplate capacity for LDPE in China is forecast at 9.44 million mt/year in 2026 -- exceeding total domestic demand of 8.92 million mt/year.

Conversely, in the past five years, domestic demand has consistently been below domestic capacity in China for LDPE. For instance, nameplate capacity in 2025 totaled 7.04 million mt/year, below the domestic demand of 8.42 million mt/year.