Recently, influenced by geopolitical risks, the prices of crude oil and low-density polyethylene (LDPE) exported from Iran to China have fluctuated frequently. The war conflict between Iran and Israel may lead to the closure of the Strait of Hormuz. Additionally, some LDPE producers in Iran have gradually halted production due to the war, potentially resulting in a significant reduction in the overall supply of high-pressure LDPE from Iran and a substantial increase in LDPE prices. Some EVA petrochemical enterprises may have sensed business opportunities and are shifting to large-scale production of high-pressure LDPE…
In fact, the Strait of Hormuz has not been closed at present. From the perspective of LDPE supply and demand, it has not been significantly affected by the Iran-Israel war. The frequent price fluctuations are mainly influenced by changes in crude oil prices on the raw material side. However, from the demand side, June and July are still the traditional off-season for LDPE demand, with limited growth in domestic demand. LDPE and EVA are produced in co-production units. According to SMM, EVA enterprises have not actually switched to LDPE production. From April to June, petrochemical plants have mainly scheduled EVA production, with no significant changes occurring as a result.
The price trend of EVA is mainly influenced by supply and demand. Overall, demand remains relatively weak. However, due to the recent concentrated stockpiling by downstream film enterprises, petrochemical plants have received a good number of orders. Additionally, some petrochemical plants on the supply side have shifted to maintenance production, resulting in an overall operating rate of EVA below 50% in June. The overall supply of PV-grade EVA has tightened. In the short term, driven by the dual factors of improving order volumes on the demand side and tight supply, EVA prices may rise slightly. However, in the long term, as some petrochemical plants subsequently switch to PV-grade EVA production, the supply-demand pattern is expected to become more relaxed, and prices are still expected to decline.
(Source)