Sumitomo Chemical Cuts 20,000 Tons of Production Capacity! Japanese Chemical Giant Halts LDPE Production Facilities Due to Declining Demand

In a statement on October 29, Sumitomo Chemical, a well-known Japanese chemical company, announced that in order to improve production efficiency and strengthen short-term performance, it will suspend the operation of some low-density polyethylene (LDPE) manufacturing facilities at its Chiba plant. The move is aimed at accelerating the pace of business restructuring and reducing annual capacity by 20,000 tons.

LDPE is a high performance plastic material, because of its flexibility, transparency, impact resistance, chemical resistance and electrical insulation properties, widely used in food packaging, agricultural film, food bottles and cable and other fields. However, due to factors such as Japan's shrinking population, low birth rate and aging, LDPE demand continues to decline and is not expected to grow significantly in the future.

In light of these changes, Sumitomo Chemical decided to streamline LDPE production operations at the Chiba plant and improve the product portfolio to meet high value-added areas and customer needs.

At the same time, international oil prices began to rebound, and tensions in the Middle East could lead to higher prices. On October 31, WTI crude oil prices returned to the $70 mark after a two-year rise, a cumulative increase of more than 4% in two days, and oil prices continue to rise.

The spot market has also adjusted. Following the announcement of a PBT price increase of 500 yuan/ton by Comfort New Material Technology Co., LTD., Invista recently raised the spot price of PA66. According to Invision's news on October 29, the spot trading price of nylon 6,6 polymer (" U4800 ") with model number PA66 U4800 NC01 SS (750 kg package) will be adjusted to RMB 18,800 / ton from November 1, 2024. Compared with the 18,600 yuan/ton on September 26, the price increased by 200 yuan/ton.

Invista (China) Investment Co., Ltd. states that this price includes VAT and applies to U4800 contract orders greater than a certain quantity purchased from Invista plants under FCA terms. This price announcement is for information disclosure purposes only and does not constitute an offer or legal obligation. Invista reserves the right to adjust the spot transaction price, and the final transaction price will be confirmed based on actual supply and demand conditions and other factors.

As the end of the month approached, many categories in the market began to stabilize, and prices rose slightly or remained flat. N-methylpyrrolidone rose by nearly 1000 yuan/ton in 7 days, reaching 10%. Geopolitical tensions and a rebound in oil prices could lead to further market strength. Therefore, it is recommended to pay attention to the progress of the situation in the Middle East in order to better respond to market changes.