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The CIS Countries’ LDPE Market Is Set to Increase at a CAGR of 1.9% per Year until 2023

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According to a recently published report about the CIS Countries’ low density polyethylene (LDPE) market, it was equal to 812 thousand tons in 2013. The largest country market within the region was the Russian Federation, which in 2013 accounted for a share of 73% of the total in volume terms. Until 2023, the CIS Countries’ market is forecast to reach around 860 thousand tons, thus growing at a CAGR of about 1.9% per annum in the period 2018-2023. This is a slight increase, compared to the decline at a CAGR of around 1.4% per year, registered in 2013-2017.

The analytical research projects that the CIS Countries’ production of low density polyethylene (LDPE) is likely to grow to around 845 thousand tons per year in the medium term. Upward dynamics of the overall installed production capacities in the region are also expected. Their annual average utilization rates, on the other hand, are expected to stay similar. In addition, the market is forecast to remain relatively balanced in terms of supply and demand, also showing moderately upwards dynamics in the medium term.

LDPE offers high electrical & chemical resistance and transparency, which makes it ideal to use in end industries such as flexible packaging, automotive, construction, green house, tunnels, insulation coax, and others. The packaging industry is the principle LDPE-consuming sector globally. LDPE is used for packaging food products such as meat and poultry, dairy products, snacks and sweets, and frozen food. In addition, the chemical is used as a coating to paper and paperboard products used for packaging liquids such as milks and fruit juices. Overall, the packaging films segment represented the highest LDPE consumption worldwide, consuming 76% of the total product supply in 2017. In Europe, low density polyethylene (LDPE) is increasingly being replaced by low linear density polyethylene (LLDPE). New LDPE investments globally are overshadowed by those in LLDPE.

Merger and acquisition activity has been robust in the chemical industry during the past few years. Although, the consolidation trend has been stable even in uncertain times, the number of global chemical merger and acquisition deals is decreasing. Particularly on the low density polyethylene market, there has been interest in corporate restructurings. One of the most prominent deals recently is the merger and subsequent spin-off of the two large market players – Dow Chemical and DuPont. As of 2017, the two companies merged to form the chemical conglomerate DowDuPont. The company is planning to split into three independent chemical companies later in 2019, namely Dow (focused on commodity chemical production), DuPont (focused on specialty chemical production), and Corteva (focused on agricultural chemicals). The transaction is expected to combine the production of Dupont’s 500 million lb/year of LDPE in Orange and an additional 240 million lb/year of LDPE capacity in Victoria, Texas, to Dow’s 425 million lb/year of LDPE production in Plaquemine and 386 million lb/year of production in Freeport, coupled with another 500 million lb/year of LDPE production in Seadrift, Texas. The merger will also merge lines of linear low density and high density polyethylene.

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