SunSirs: LLDPE Plummets! Where Is the Price Bottom?

01 Price Cliff

Over the past year, the LLDPE market has experienced a steep price decline. In January 2025, LLDPE prices remained near the high of 9,000 RMB/ton, but by June, this figure had fallen to the annual low of 7,280 RMB/ton.

Entering December, conditions not only failed to improve but worsened significantly. The average LLDPE price for December plummeted to 6,925.56 RMB/ton, marking a year-on-year drop exceeding 21%.

Regional price differentials also widened substantially. The gap between North China and East China's LLDPE prices reached as high as 350 RMB/ton at one point.

This domestic price decline mirrored weakness in the international crude oil market. Crude oil prices hovered around $60 per barrel, providing weaker cost support for LLDPE. The average production cost for oil-based LLDPE has fallen to approximately CNY7,713 per ton.

02 Capacity Surge

Global polyethylene capacity is undergoing unprecedented expansion. Global polyethylene capacity surpassed 150 million tons in 2024, with projections indicating it will exceed 160 million tons by 2025.

China is undoubtedly the driving force behind this expansion. Since the concentrated expansion phase of domestic large-scale refining and chemical projects began in 2020, China's polyethylene capacity has grown at an average annual rate of 10% through 2024. In the first half of 2025 alone, China added 3.03 million tons of new polyethylene capacity.

In terms of global capacity share, China's polyethylene production capacity has risen from 15% in 2014 to 22% in 2024, and is projected to reach 25% in 2025. By the end of 2026, China's polyethylene capacity is expected to further increase to 52.23 million tons.

03 Structural Imbalance

Behind this capacity expansion lies a structural imbalance among product types. Taking the first half of 2025 as an example, LLDPE production surged by 27.65% year-on-year, while HDPE output grew by only 7.21%.

This disparity in growth directly manifested in pricing. LLDPE emerged as the polyethylene grade with the steepest decline. The price gap with LDPE widened from 1,000 RMB/ton at the beginning of the year to over 2,000 RMB/ton.

China is transitioning from a net importer of polyethylene to a more balanced position. In 2024, China's net polyethylene imports reached 13.03 million tons, with the import dependency rate declining from its 2019 peak of 49% to 33%.

04 Supply-Demand Mismatch

While supply surged aggressively, demand remained sluggish. Apparent PE consumption in the first half of 2025 is projected to decline by 10.3% year-on-year.

Entering December, demand weakened further. The agricultural film sector entered its traditional off-season, with declining production rates as greenhouse film orders wound down. While the packaging film industry saw a boost from the “Double Twelve” e-commerce festival, the incremental demand from the holiday remained relatively limited.

Downstream factories maintained a cautious stance, keeping raw material inventories low and purchasing only as needed. Overall downstream production rates currently hover between 34% and 53%.

05 International Perspective

The global polyethylene trade landscape is undergoing profound changes. The United States has surpassed Saudi Arabia as China's largest polyethylene import source, accounting for 17.2% of imports.

Leveraging low-cost ethane feedstock from its shale gas revolution, the U.S. continues to expand polyethylene capacity. By 2024, its total PE capacity reached 28.171 million tons, making it the world's largest polyethylene exporter.

Meanwhile, the Middle East maintains its position as a major global polyethylene production and export region, accounting for approximately 16% of worldwide capacity. The European market faces trade policy uncertainties, with the EU approving a 25% additional tariff on certain U.S.-origin LLDPE products effective August 7, 2025.

06 Future Outlook

The current deep adjustment in the LLDPE market is an inevitable outcome of three converging pressures: sustained supply expansion, sluggish demand recovery, and limited cost support.

In the short term (1-3 months), the market's volatile and weak pattern is unlikely to fundamentally reverse. Insufficient seasonal restocking momentum toward year-end and the need to digest social inventories mean any news-driven rebounds are likely to be limited in scope.

The medium-term outlook (3-12 months) hinges on a critical race: which will arrive first—substantial demand recovery (particularly in manufacturing and packaging) or effective supply contraction (via large-scale maintenance or unplanned production cuts). Concurrently, shifts in the global trade landscape represent another key variable. Market inflection points and price stabilization depend on signals resolving these core contradictions, a process likely extending into 2026.

As an integrated internet platform providing benchmark prices, on December 22nd, SunSirs' benchmark price for LLDPE was 6600.00RMB/ton, a decrease of 3.95% compared to the beginning of the month (6871.66 RMB /ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.