Published January 2015
Over the last three decades LDPE has lost its one-time prominence in the polyethylene resin category as generic linear low-density polyethylene (LLDPE), single-site LLDPE resins, and more specialty plastomer volumes have increased at its expense within many of its critical volume markets. Over time, this scavenging of volume markets has slowed, resulting in LDPE use in more specialty applications, where its branching character is hard to match via the competing LLDPE resin types.
Over the last decade, as the market for LDPE in its remaining applications has begun to stabilize, licensors have promoted new, very large world-scale LDPE equipment. Willing investors in Iran, the Gulf countries, and China have driven a number of new large LDPE projects, which began coming onstream during 2008–10. In the next five years, most investments will spring up in North America, the Middle East, and China. These new projects have disrupted, and will continue to disrupt the prior tight market balance enjoyed by LDPE producers and consequently may erode the LDPE price premium compared with the other polyolefins. These developments will increase the economic pressure on the smaller-scale and older plants in less competitive countries.
The following pie chart shows world consumption of LDPE:
World consumption of LDPE is dominated by Northeast Asia, which accounted for 31% of the total in 2014, dominated by China, which tops the list at 23% of the world total. Demand is growing at an average annual rate of about 5% in China, much higher than that estimated for the United States at 1.5%. Japan and Western Europe are displaying lackadaisical average annual growth, indicative of mature economies with less growth in consumption.
Film and sheet applications are the largest-volume markets for LDPE, accounting for 67% of world consumption in 2014, and are the major growth markets in countries like China. Film demand is split between packaging and nonpackaging uses; packaging applications account for 80–87% of film use, depending on the market development. Major applications for food packaging include baked goods, dairy products, frozen food, produce, meat and poultry, candy, and cookies. Nonfood packaging includes industrial liners, heavy-duty sacks, multiwall sack liners, pallet stretch- and shrink-wrap, bundling and overwrap, grocery sacks, merchandise bags, and garment bags. Typical nonpackaging uses include household wrap and bags, garbage bags, industrial sheeting and roll-stock, agricultural film and disposable diaper backing. Film and sheet applications are forecast to grow modestly at 3% per year from 2014 to 2019.
Extrusion coating is the second-largest market for LDPE, accounting for 10% of total world demand in 2014. Typical applications include the coating of paper and paperboard products for packaging liquids such as milk and juices, the coating of foil to provide a heat-seal layer in multilayer film structures, and the coating of paper and woven cloth to provide a moisture barrier. Overall world growth in consumption of LDPE is expected to be modest at 2.5% per year, and extrusion coating is likely to track only slightly better than average growth over the next five years, slowed somewhat by continued development of the use of single-site LLDPE in packaging constructions. As an example, metallocene LLDPE is now blended with LDPE and coextruded in some multilayer film barriers used in drink carton packaging. Another issue with the expansion of extrusion coating is the fact that it shares LDPE manufacturing assets with another relatively fast-growing arena—ethylene–vinyl acetate copolymers (EVAs).
LDPE and blends of it with LLDPE will continue to be the resin(s) of choice for many processors. Many fabricators continue to desire easy-to-process polymers that meet their needs, and LDPE is not overdesigned or overpriced for the application. In addition to its easy processability, LDPE has good strength and clarity. Both conventional butene/hexene and metallocene-based LLDPE are more difficult to process and this is not expected to change over the next five years. As such, blending of LDPE and LLDPE will continue to allow processors to optimize the equation based on processability, performance, and price.