Polyethylene & Polypropylene
ICIS / CME
The two plastics that wrap, carry, and contain the modern world, now trading futures in Dalian deeper than any Western resin market.
Top Producers
share of global PE and PP capacity, 2025
Top Consumers
share of 2025 consumption
Main Uses
global polyethylene and polypropylene demand by end market, 2024
Top Exporters
share of 2025 polyethylene and polypropylene exports; the US and Middle East are the big net exporters
Top Importers
share of 2025 polyethylene and polypropylene imports by destination; China is the largest single buyer despite its own buildout
Global PE demand
roughly 115 million tonnes
as of 2025
Global PP demand
roughly 90 million tonnes
as of 2025
Global operating rates
roughly 80%
as of 2025
Deepest futures market
Dalian LLDPE and PP, 5-tonne contracts
as of 2026
Share of demand from packaging
roughly half
as of 2025
Polyethylene and polypropylene are the two largest plastics, together roughly 200 million tonnes of annual demand. Polyethylene, polymerized ethylene, splits into high density grades for bottles and pipe, linear low density for stretch film and flexible packaging, and low density for coatings and film; global PE demand is roughly 115 million tonnes. Polypropylene, polymerized propylene, is stiffer and more heat resistant, going into automotive parts, rigid packaging, appliances, fibers, and medical devices, with demand of roughly 90 million tonnes. Packaging dominates both. Resin demand has grown faster than GDP for decades and is the core of the petrochemical case for long-term oil demand.
The market splits between contract and spot. Most Western resin moves on monthly contract prices negotiated between producers and converters, assessed by ICIS, S&P Global, and OPIS PetroChem Wire, while export cargoes and Asian trade run on spot assessments. Futures exist at two depths: the Dalian Commodity Exchange's linear low density polyethylene contract, listed in 2007, and its polypropylene contract, listed in 2014, trade enormous volumes and effectively set the Asian marginal price, while CME lists cash-settled North American polyethylene futures referencing PRA assessments that remain thin. The same Chinese capacity wave that oversupplied the olefins oversupplied the polymers; global PE and PP operating rates sat near 80 percent through 2024 and 2025 and export pressure from new Chinese and Middle East plants compressed margins everywhere.
Regulation is now a price input. The EU Packaging and Packaging Waste Regulation, in force from February 2025, mandates recycled content in packaging by 2030, the UK has taxed plastic packaging with less than 30 percent recycled content since April 2022, and recycled polyethylene and polypropylene have become distinct PRA-assessed grades trading at premiums to virgin resin in Europe. A global plastics treaty remained under UN negotiation after talks in Busan in December 2024 and Geneva in August 2025 ended without agreement.
How It Trades
| Venue | Monthly contract markets assessed by ICIS, S&P Global, and OPIS PCW; futures on the Dalian Commodity Exchange and CME |
| Benchmark contract | Dalian LLDPE and PP futures (physically deliverable, yuan-denominated) are the deepest contracts; CME lists thinner cash-settled North American PE futures against PRA assessments |
| Contract size | Dalian contracts: 5 tonnes each; CME PE futures: 47,000 pounds; physical deals by railcar (roughly 90 tonnes) and container |
| Price terms | US cents per pound for North American contract resin; USD per tonne for international spot; yuan per tonne on Dalian |
| Settlement | Dalian contracts deliver physical resin into exchange warehouses; CME contracts settle financially on monthly assessment averages |
| Typical curve | Dalian shows a real curve roughly a year out, usually in mild contango; Western forward visibility relies on PRA forecasts rather than traded prices |
| Liquidity | Two-tier: Dalian is deeply liquid with heavy industrial and speculative participation; Western polymer futures are thin and most risk is managed through contract formulas |
Where It Trades
approximate split of futures and OTC volume, 2025; Dalian is the most liquid polymer futures market globally while most Western resin still trades OTC on monthly contracts against price assessments
Supply and Demand
Top producers
- China (largest producer of both PE and PP after the 2020s buildout)
- United States (PE export powerhouse on ethane economics)
- Middle East (Saudi Arabia, UAE), South Korea, India, Europe
The US and Middle East are the big net exporters of PE; China remains a net importer of PE but is approaching self-sufficiency in PP.
Top consumers
- China (roughly a third of global resin demand)
- Rest of Asia (India the fastest-growing large market)
- North America, Europe, Latin America, Africa
Major uses
- Packaging (film, bottles, containers): roughly half of combined PE and PP demand
- Automotive, appliances, and durables (mainly PP): roughly 15 percent
- Construction (pipe, sheet, insulation): roughly 10 percent
- Fibers, medical, agriculture, consumer goods: balance
What Moves the Price
- Ethylene and propylene monomer costs, which set the floor under resin
- Chinese operating rates and export volumes, the marginal global supply
- Packaging and consumer demand, tracking retail activity and e-commerce
- Container freight rates, which open and close inter-regional arbitrage
- New plant startups in China, the US, and the Middle East
- Recycled-content regulation and the premium for recycled resin in Europe
- Oil versus gas prices, which tilt the cost curve between naphtha-based and ethane-based producers
Moments That Made the Market
2007
Dalian Commodity Exchange lists LLDPE futures, the first liquid polymer futures market in the world
2008
Resin prices crash with crude in the second half; converters destock violently and several Western producers idle lines
2014
Dalian lists polypropylene futures; Chinese paper markets begin to set the Asian marginal resin price
2018
China's National Sword policy bans imported plastic waste, upending global recycling flows and raising virgin resin demand in Asia
2021
Winter Storm Uri shuts most US PE and PP capacity in February; North American contract prices roughly double to record highs by mid-year
2022
The UK plastic packaging tax takes effect in April; recycled resin grades become established PRA-assessed markets in Europe
2024
Global PE and PP operating rates sink to roughly 80 percent as Chinese and US additions outrun demand; UN plastics treaty talks in Busan end without agreement in December
2025
EU Packaging and Packaging Waste Regulation enters into force in February, hard-wiring recycled content mandates for 2030
What Changed Since the 2010 Handbook Era
- The US became the world's largest PE exporter on shale ethane economics; in 2010 the growth story was Middle East exports to China
- China moved from absorbing everyone's surplus to exporting PP and approaching PE self-sufficiency, removing the market's balancing demand sink
- Liquid polymer futures became real: Dalian LLDPE and PP now anchor Asian pricing in a way no exchange contract did in 2010
- Recycled resin became a distinct traded grade with its own assessments and, in Europe, a regulatory floor under its demand
- Plastics regulation moved from bag bans to binding recycled-content law and a draft global treaty, making policy a structural input to resin demand forecasts