Procurement Outlook
Low Density Polyethylene (LDPE) is a thermoplastic that is manufactured from monomer ethylene. The first commercial grade of polyethylene was manufactured by Imperial Chemical Industries using a high-pressure process via free radical ethylene. LDPE is a semi-rigid and translucent polymer that has 4,000 to 40,000 carbon atoms. LDPE finds its usage mostly in the packaging industry
LDPE is a commodity product and hence its prices are globally regulated. The market prevalently uses a flat-fee pricing scheme. The cost of LDPE films has been on a constant decrease since the end of 2018.
Demand Outlook
The global LDPE market was valued at USD 35.6 billion in 2020 and is expected to reach USD 43.1 billion by 2025. The global production of LDPE as of 2020 stood at 25.3 million MT with Asia being the largest producers as well as the largest consumers of LDPE.
The Asia Pacific market, by production, occupies a market share of 31.2% with North America being the second-largest producer. From a consumption perspective, the North American and the MEA markets are supply-surplus regions while the APAC, LATAM, and European markets are trade deficit regions. This trend is expected to continue for the next 2-3 years as well.
Cost Drivers
The market is expected to grow at a modest 3% –4% CAGR from 2020 to 2025. As such, the cost drivers are limited. Most of the regions employ different sourcing and pricing techniques to maximize their profits. For example, the North American market engages in contract manufacturing and local sourcing but limits its imports of LDPE due to the high cost of imported LDPE. Players in the APAC region mostly engage in spot buying and hence perform competitive pricing to maximize profits. While these factors help maximize profit opportunities, they are not essentially cost drivers.
Grab your copy, or request for a free sample of the “Low Density Polyethylene Industry Procurement Intelligence Report, published by Grand View Research” for In-depth details regarding supplier ranking and selection, sourcing, and pricing criteria & strategies.
Add-on Services provided by Grand View Research Pipeline:
Should Cost Analysis
Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Rate Benchmarking
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Salary Benchmarking
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
Supplier Newsletter
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
Brief about Pipeline by Grand View Research:
A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain which helps in efficient procurement decisions.
Our services include (not limited to):
- Market Intelligence involving – market size and forecast, growth factors, and driving trends
- Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
- Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
- Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions
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