The U.S. Low Density Polyethylene (LDPE) Film Grade FOB Texas market was neutral to bearish in January 2026. Prices remained firm at the first week on balanced supply and demand as very high output on the Gulf Coast and a recent start-up of an additional LDPE line adding more capacity was balanced out by a 6% recovery in feedstock ethylene. Prices softened 1.03% at the second week under influence of steep decrease in sales to Latin America and to Asia on exchange rate problem, which limited arbitrage opportunities and widened competition on volumes production 90% domestically. Robust domestic flexible-packaging demand from convenience foods, e-commerce parcel flows, and stronger food-safety rules offered some counter-support, but not enough to change the gentle downtrend.
The demand for film grade LDPE in the U.S. was unimpressive in the first week of January 2026. Flexible-packaging converters ran shortened schedules as they worked through inventories built in December and awaited clearer signals from customer-goods clients. The plastic bottle segment began weak due to front-loaded Q4 production for holiday promotions, while use of stretch film in construction remained seasonally slow in cold weather areas. Purchase managers concentrated on just-in-time purchasing as they anticipated a relaxed resin supply situation domestically from the new Gulf Coast capacity.
The supply situation was still relaxed as producers on the Gulf Coast were operating at high rates and the recently started-up LDPE line was adding additional resin to the spot market. Several existing plants said they were running smoothly with no outages due to weather or turns. Rail logistics and Houston/New Orleans export terminals functioned normally with no signs of congestion. Feed ethylene soared 6%, but this was not passed on in resin prices, as demand was weak. Finished-grade LDPE industry inventory data showed that stocks are running above the five-year January average, which further confirms buyer confidence of LDPE supply being abundant and this is supporting the neutral-bearish outlook for now.
The crude oil production in Gulf Coast increased by 5 mb/d owing to the newly commissioned LDPE line (added capacity) which expanded availability in a tight domestic market. Strong decline in export liftings to Latin America and Asia on the back of currency volatility and even stronger competition for volumes at home. Converters' growing preference for LLDPE over LDPE due to superior tensile strength and ability to carry less material required for packaging caused a decrease in LDPE offtake. Ample supply and buyers practicing just-in-time purchase reinforced buyers’ bargaining power, while domestic end users such as convenience food, e-commerce and food safety compliance exhibited strong demand and provided certain counter-support.
As per ChemAnalyst, the US LDPE film grade market is expected to stay soft until late January 2026, as strong domestic supply, weak exports, and continued substitution to LLDPE put pressure on prices from the downside. Key to watch may be ethylene pricing, new capacity utilization, and potential restocking prior to seasonal demand. An upside would come from an unplanned outage or a stronger-than-expected recovery in flexible packaging demand.
