Indian LDPE Market Faces Sluggish Demand, Cautious Sentiment Amid Supply Constraints

Key Highlights:

1. LDPE Prices Edge Up – Prices increased by $5/MT, reaching $1165-$1185/MT CFR, with Middle Eastern producers offering March shipments in a similar range.
2. Cautious Buying & Weak Demand – Strict payment terms and slow downstream consumption keep demand low, while suppliers focus on offloading inventory.
3. South Korea Plant Shutdowns Disrupt Supply – LG Chem & Lotte Chemical halted 1.9 million tons/year of PP & PE capacity, impacting regional supply.
4. Market Outlook Remains Stable – Prices likely to remain range-bound with minor fluctuations, as buyers delay purchases awaiting clearer trends.

Polymer Price: Upward Movement in LDPE Prices

• In Bhiwandi, LDPE 4 MFI SLIP GP (PRIME) and LDPE 2 MFI NON SLIP (PRIME) are both priced at ₹1,13,000 per metric ton. 
• Meanwhile, LDPE LAMINATION (PRIME) in Mundra is available at ₹1,22,000 per metric ton.
• LDPE prices were assessed at USD 1165-1185/mt CFR, reflecting a marginal increase of USD 5/mt week-on-week. 
• Middle Eastern producers have offered LDPE film grades in the same range for March 2025 shipments.  
• The strengthening of the US dollar against Asian currencies, including the Indian rupee and Chinese yuan, has exerted upward pressure on import prices. However, the overall price movement remains range-bound, with limited volatility observed in the short term.  

Demand and Supply: PE Market Facing Challenges

• Indian domestic PE market is facing challenges due to cautious buying behavior, low demand, and strict payment terms. Despite the seasonal push, demand remains sluggish, and suppliers are focusing on inventory offloading rather than taking new risks. Middle Eastern producers' absence in offering fresh supplies has further contributed to a wait-and-watch approach among market participants.  
• Demand in the PE import market remains tepid, with buyers delaying purchases in anticipation of additional offers. Downstream consumption is slow, and market sentiment is cautious, reflecting balanced demand-supply dynamics.  
• Tight supply conditions, caused by unplanned production shutdowns, have supported price firming. However, buyers are resisting higher price offers and avoiding impulsive purchases, indicating a cautious market stance.  
• In India, a slight demand increase may occur post-Holi festivities, but the ample supply situation is likely to prevent substantial price recovery. In China and Southeast Asia, demand is expected to remain subdued until clearer pricing trends emerge.  

Petroleum News: Major Supply Disruptions in South Korea

• The US has reiterated its plan to implement import tariffs on goods from Canada and Mexico, which has shaken global market confidence and exerted bearish pressure on international oil prices. 
• This development, coupled with a stronger US dollar, has added to market uncertainty. The weakening of the Indian rupee against the US dollar has raised concerns about higher import prices and its potential impact on consumer choices.
• In China, the RMB has slightly declined but remains strong enough to sustain USD-denominated prices.  
• LG Chem and Lotte Chemical have shut multiple polymer and chemical production units in Daesan, South Korea, due to a power outage. 
• LG Chem's affected facilities include its Polypropylene (PP) and Polyethylene (PE) units with a combined capacity of 985,000 tons per year, along with its Ethylene Oxide (EO) and Ethylene Glycol (EG) plants, producing 114,000 and 125,000 tons annually, respectively. 
• Lotte Chemical has also halted operations at its PP and PE units, with a total production capacity of 920,000 tons per year. The shutdowns, which began on February 25, 2025, are expected to impact supply in the region.

Expert Opinion: Market Sentiment Looks Stable

• It is expected that prices will remain range-bound, with potential fluctuations of Rs.0.5-1/kg in the near term. The strengthening US dollar and cautious buyer behavior are likely to limit significant price movements.  
• In the long term, it is expected that market participants will maintain a wait-and-watch approach until distinct pricing trends and demand recovery signals become evident. Suppliers are anticipated to continue focusing on inventory management rather than adopting aggressive pricing strategies.