Low density polyethylene (LDPE) is used mainly in film applications for both packaging and non-packaging applications. Other markets include extrusion coatings, sheathing in cables and injection moulding applications.
LDPE is the oldest and most mature of the polyethylenes (PE). It is characterised by its short and long chain branching which gives it good clarity and processability although it does not have the strength properties of the other PEs.
The largest outlet for LDPE is the film market, accounting for around 55% of global consumption and used mainly in food and non-food packaging. Food packaging applications include meat and poultry wrapping, dairy products, snacks and sweets, frozen food bags and baked goods. It is used where high clarity films are required such as produce bags and bakery film.
Non-food packaging applications embrace industrial liners, stretch- and shrink-wrap, garment bags and merchant bags.
Non-packaging film applications cover carry-out bags, waste bin liners and garbage bags, industrial sheeting, and construction and agricultural films.
A growth area for LDPE is the extrusion coating sector, the second largest application segment accounting for 10% of demand. It is used to provide coatings to paper and paperboard products for packaging of liquids such as milk and fruit juices, and to provide a moisture barrier to paper and woven cloth. It is also used for the coating of foil to provide a heat-seal layer in multilayer film structures. LDPE can be coextruded with metallocene-based linear low density polyethylene (LLDPE) in multilayer film barriers used in drink cartons.
Injection moulding, the third-largest application segment, is another growth area for LDPE. Uses include household goods, toys and sporting goods, caps and closures, and medical appurtenances.
Compounds based on LDPE can be used in insulation and jacketing materials for wire and cable applications as well as the sheathing of telecommunication cables.
However, LDPE has been losing market share to LLDPE which has either replaced or been blended with LDPE. The higher strength properties offered by LLDPE allow down-gauging, saving material and reducing costs. LLDPE has grown to account for 52-53% of the combined LDPE-LLDPE market.
LLDPE’s penetration into the LDPE market appears to be slowing in the more mature markets of North America, Western Europe and Japan. In developing markets such as China, further penetration of LLDPE into LDPE applications is expected to continue. An additional threat could come from metallocene-based LLDPE that offers improved clarity and processing properties which could allow further penetration into LDPE markets.
Markets under pressure
The global LDPE market at around 18m tonnes in 2008 has only been growing about 2%/year with most of the growth in Asia driven by Chinese demand. In the longer term, absolute LDPE demand is forecast by consultant Nexant ChemSystems to be flat due to continued pressure from LLDPE. Growth is expected to continue in Asia, in particular China, but it may be offset with modest declines in North America and potentially Europe.
There was an unprecedented demand crash in the second half of 2008 as a result of the credit crisis and its impact on economic activity. With declining polymer prices exacerbated by falling feedstock prices, purchasers withdrew from the market and inventories along the value chain reduced significantly.
LDPE demand continued to decline in 2009 by 1.9% due to the effects of the global economic downturn and sustained competition from LLDPE, says ChemSystems.
LDPE capacity additions up to 2009 have been minimal with the start-up of some of the new units delayed. However, the period 2010-2015 is expected to see capacity growth as projects under construction come on-stream.
Many projects are based in either the Middle East with advantaged feedstock or the growth markets of Asia. However, there have been two new plants started up in Europe – a 400,000 tonne/year plant by Sabic in July 2009 in Wilton, UK, and a 350,000 tonne/year plant inaugurated by Borealis in June 2010 in Stenungsund, Sweden.
The new capacities will have a profound effect on operating rates. Up to 2015, ChemSystems expects closures of smaller, old and less competitive assets in the more mature markets of Western Europe, North America and Japan.
A significant shift in global trade is expected after the commissioning of the export-oriented LDPE capacity in the Middle East. Much of this traded LDPE will head for Asia but product may find its way into European and North American markets.
Updated: July 2010. Source: ChemSystems PolyOlefins Planning Service (POPS).
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