What is Linear Low-Density Polyethylene (LLDPE)?
Linear Low Density Polyethylene (LLDPE) is a versatile polymer with a wide range of applications that contribute significantly to the global commodities market.
Its primary applications include packaging films, plastic bags, and containers, making it a crucial material in the packaging industry.
As a key player in the plastics industry, LLDPE plays a vital role in meeting the growing demand for flexible and durable packaging materials worldwide. This makes Dalian Commodity Exchange’s LLDPE Futures one of the most actively traded futures contract in the global commodity market.
This article aims to recap the performance of LLDPE Futures traded on the Dalian Commodity Exchange (DCE) in 2023 and explore the potential outlook for 2024.
LLDPE Futures and Options from Dalian Commodity Exchange (DCE)
Dalian Commodity Exchange offers a total of 21 futures, including internationalized futures such as Dalian Commodity Exchange Soybean Futures, iron ore futures, palm olein futures, and LLDPE Futures.
Traders can go through Orient Futures Singapore to trade LLDPE futures and options with Dalian Commodity Exchange (DCE) with the QFI China Scheme.
Click to find out about DCE China LLDPE Futures Contract Specifications and Dalian Commodity Exchange Trading Hours.
LLDPE Futures 2023 Performance
Figure 1. LLDPE Futures Price from Jan 2023 to Jan 2024 from Trading View
According to 同花顺投顾平台, the overall profit margins for LLDPE in both upstream and downstream sectors continue to be under pressure in 2023.
Profitability for oil-based LLDPE is observed to be in a low-neutral position, while methanol-based LLDPE profitability falls within the neutral range.
Due to process and facility characteristics, various segments of the industry may need to incur losses to cease production.
In 2023, both oil-based and methanol-based LLDPE technologies are experiencing varying degrees of losses, leading to delays in the expected commissioning of new production capacity. Although the planned capacity addition for 2023 was 5 million tons, only 2.6 million tons were officially commissioned.
Linear Low Density Polyethylene LLDPE Market News
Linear Low-Density Polyethylene Market Supply and Demand
According to Sina Finance, the overall PE market in China experienced a decline before rebounding in December last year, with the price continuing to move downward.
In mid-to-late December, affected by the Red Sea shipping crisis and the unplanned shutdown of some petrochemical enterprises, market participants' confidence was somewhat boosted.
Spot prices fluctuated and rose slightly, and factories adhered to just-in-time procurement, with limited support for the rising market.
The shutdown of Qilu Petrochemical's old full-density unit, Haiguolong Oil, and Shenyang Chemical LLDPE unit will continue to affect the supply of LLDPE in the North China region, while the supply in other regions is expected to remain stable.
The import volume may decrease in the next three months, and the overall supply pressure of imported goods is gradually decreasing. Demands for greenhouse films from January to March this year may enter the off-season, and demand for ground films will gradually follow.
LLDPE Futures Price
Investing.com reported that DCE LLDPE Futures are priced at 7,995 yuan/ton, as of 9th January 2024.
LLDPE Futures 2024 Market Outlook
Sina Finance predicts that the domestic LLDPE market price will rise first and then fall in January 2024, with a slight downward shift in the price. Thus, it is necessary to closely monitor the terminal demand situation.
In February and March, as demand gradually picks up after the holiday, but considering the inventory situation during the long Chinese New Year holiday, the overall LLDPE market may experience a pattern of falling first and then rising.
The average price of LLDPE film in the East China market is expected to be 8150 yuan/ton in January 2024, 8100 yuan/ton in February, and 8180 yuan/ton in March.
Start Trading With Orient Futures Singapore
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