Low-density polyethylene price comparisons between quotations expressed per kilogram and per metric ton are not a simple ×1000 operation when contract basis and Incoterms 2020 allocations are left unnormalized. A film-grade LDPE is specified with density 0.917–0.930 g/cm³ according to ISO 1183-1:2019 and melt flow rate 0.2–2.0 g/10 min at 190 °C/2.16 kg according to ISO 1133-1:2022. A CFR China quote does not contain the same delivered-cost elements as a DDP Guadalajara quote, even if both are arithmetic conversions from USD/kg to USD/metric ton. The term “basis” in LDPE pricing therefore encompasses three separate layers: the mass denominator, the currency and regional unit convention, and the Incoterms rule that allocates freight, insurance, customs, and risk. Without a normalization protocol that fixes all three layers, percentage differences between quotes are analytically meaningless. The same logic applies to formula contracts that reference a published LDPE price assessment but fail to state whether the benchmark is quoted in USD/metric ton CFR China or US c/lb FOB US Gulf.

What Drives the Choice Between Price per Kilogram and Price per Metric Ton?

Commodity polymer markets in Asia and the Middle East predominantly quote LDPE spot and contract volumes in USD/metric ton for parcels of 50–500 metric tons, while European assessments are reported in EUR/metric ton and North American spot values are published in US c/lb. Latin American distribution pricing for smaller lot sizes commonly appears in USD/kg or local currency per kilogram because invoice line-item quantities for repacked bags are denominated in kilograms. The choice of unit tracks transaction scale rather than material grade. A 1 USD/metric ton price change is equivalent to 0.001 USD/kg; for a 100 kg bag purchase, that movement is 0.10 USD, which is below the rounding threshold of many distributor invoices. In contrast, for a 300 metric ton bulk parcel, the same 1 USD/metric ton change is 300 USD, large enough to justify a per-ton quote. The contract definition of the ton must be verified as metric ton 1000 kg; the US short ton is 907.1847 kg, and the UK long ton is 1016.047 kg. Incoterms 2020 does not standardize mass units, so the unit and ton definition must be explicit in the purchase specification.

Conversion Arithmetic Between USD/kg, USD/Metric Ton, and US Cents per Pound

Mass unit conversion is the least complex layer in LDPE price normalization, but it must be performed before delivery-basis adjustment. The core equivalences are $ / kg = $ / metric ton ÷ 1000 and $ / metric ton = $ / kg × 1000, where metric ton is defined as 1000 kg. For North American quotes, the conversion is c/lb = $ / kg × 45.3592 and $ / kg = c/lb × 0.0220462. The numeric factors derive from the exact relation 1 lb = 0.45359237 kg; the reciprocal is 2.20462 lb/kg. The following normalization matrix fixes the arithmetic before basis correction.

Unit conversion does not convert a delivery basis. A quote of 1.200 USD/kg FOB Jubail is equivalent to 1200 USD/metric ton FOB Jubail only when both use the metric ton of 1000 kg. If a US producer offers 54.43 c/lb EXW Houston, the arithmetic equivalent is 1.200 USD/kg EXW Houston, but delivered cost to a converter in Mexico differs from a 1.200 USD/kg DAP Monterrey quotation because inland transport, export documentation, transfer of risk, and import clearance are allocated differently. For this reason, conversion matrices should be followed by a basis-normalization field that carries the quote from the stated Incoterms rule to a common delivered point. A bare arithmetic conversion without that field creates false price gaps and incorrect freight deductions.

Beyond mass units, the term basis in LDPE pricing denotes the set of freight, insurance, customs, and handling obligations embedded in the quote. If a supplier quotes CFR Shanghai, the price includes ocean freight to Shanghai but excludes marine insurance and import duty. If a second supplier quotes CIF Bangkok, the price includes ocean freight and minimum marine cargo insurance under Institute Cargo Clauses (C) or similar, as required by Incoterms 2020, but excludes Thai import duty and VAT. A third supplier quoting DDP Guadalajara includes import clearance, duty, VAT, and inland delivery to the named place. These bases are not interchangeable; the difference is not a rounding error but a shift in cost and risk responsibility. The landed-cost equation from CFR to an import-cleared domestic basis is P_DDP/kg = [P_CFR/kg + insurance/kg] × (1 + duty rate) × (1 + VAT rate) + customs fees/kg + inland freight/kg. For HS code 3901.10, the applicable duty and VAT rates must be taken from the current national tariff schedule of the importing country. The formula should not be populated with generic rates because preferential trade arrangements, temporary tariff adjustments, and border-adjustment taxes change the denominator economics. When insurance is not separately invoiced, the CIF value may be estimated from the CFR value plus a marine premium; Incoterms 2020 requires CIF insurance cover of at least 110% of the invoice value, but the actual premium is a separate contract cost.

For containerized LDPE, ocean freight is frequently expressed per 40 ft container, not per ton. A 40 ft container of bagged LDPE is typically payload-limited to 25–27.5 metric tons because road and terminal weight limits constrain total gross mass. The per-container freight must be divided by the actual loaded kilograms, not by the container cubic capacity. If the freight is 2400 USD/container and the payload is 25 000 kg, the freight cost is 0.096 USD/kg or 96 USD/metric ton. The same container rate with a 27 000 kg payload yields 0.0889 USD/kg; the difference changes the landed DDP price and the comparison between suppliers. This demonstrates that base unit conversion and basis normalization must be linked to the actual bill of lading weight, not a nominal trade-position tonnage.

When Incoterms 2020 Cost Transfer Points Are Misapplied to LDPE Parcels

The Incoterms 2020 rules allocate risk transfer and cost responsibility at defined points. Misapplication occurs when a contract uses a maritime-only term for a road or rail shipment, or when a DAP quote is recorded as DDP without import clearance. The following matrix summarizes the common LDPE shipment rules and their residual buyer responsibilities.

FOB, CFR, and CIF are restricted to sea and inland waterway transport under Incoterms 2020. If an LDPE parcel moves by truck from a bonded warehouse in the seller’s country to a buyer’s processor, the correct rule is FCA, CPT, or DAP. A contract that uses FOB for a truck shipment is structurally defective because the risk transfer point assumes loading on board a vessel. In supply-chain audits, this modal mismatch is treated as a compliance defect because the buyer may be paying for a theoretical ocean shipment while receiving domestic truck delivery. The allocation of terminal handling charges also changes with the rule: in CFR and CIF, sellers often exclude destination terminal handling charges, while DDP requires the seller to include them if they are part of the named place.

Published spot price assessments for LDPE film normalize the technical grade, parcel size, and location before reporting a benchmark. Methodologies from price reporting agencies typically define the assessed material by melt flow rate and density band, then report the price on a named basis such as CFR China in USD/metric ton or FD NWE in EUR/metric ton. The assessment is not a transaction price for an individual LDPE grade; it represents an aggregated trade value for a normalized cargo size, often 100–500 metric tons. A plant offer expressed as USD/kg FCA requires the buyer to add freight from the plant to the port, port handling, ocean freight, and insurance before comparing with the CFR China assessment. If the offer is in US c/lb FOB US Gulf, the buyer must first convert to USD/kg or USD/metric ton and then adjust for route freight differentials. The comparison is valid only after the quote and benchmark share the same unit, mass definition, and Incoterms basis. Published data for route-specific freight and destination terminal charges should be drawn from carrier quotations or freight indices, not inferred from polymer price differentials.

Formula contracts often reference a published assessment plus a fixed premium or discount, with the premium expressed in the same unit as the index. If the premium is in USD/metric ton and the invoice is generated in USD/kg, the invoice system must divide the premium by 1000; otherwise a 50 USD/metric ton discount becomes a 50 USD/kg error—1000× too large. Grade-specific premiums such as clarity-film or extrusion-coating adders are equally sensitive. A 20 USD/metric ton premium converts to 0.020 USD/kg; if entered as 20 USD/kg, the commercial error is immediate and material in delivered-cost calculations.

Assigning the Delivery Basis Before Comparing Converted LDPE Prices

Procurement normalization should begin with the target delivered basis, not with the quoted unit. A common template first defines the target basis as “import-cleared, delivered to processing facility, excluding unloading,” then maps every quote onto that basis. For each quotation, the following fields are mandatory: polymer grade density and melt flow rate per ISO 1133-1:2022 and ISO 1183-1:2019, quoted mass unit, ton definition, currency, Incoterms rule, named place, freight component, insurance component, duty and VAT rate, payment terms, and volume tolerance. Quotations that omit the ton definition or the named place are held as incomplete because a bare number without basis is an index placeholder, not a commercial price. Once the data are complete, the conversion order is fixed as: currency conversion first, mass unit conversion second, basis adjustment third. That sequence reduces error because freight and customs costs are normally invoiced in the transport currency and expressed per ton or per container, while the polymer price may be in a different currency and unit. A reversal of the sequence changes the result when forward FX points, freight, and demurrage are applied.

Demurrage and detention costs are not embedded in Incoterms 2020 and must be added as operational charges outside the standard terms. If a consignee delays returning a container beyond the carrier’s free time, the resulting detention is a buyer cost under most CFR and CIF contracts because risk has transferred, but under DDP the seller may bear it only if the named place includes container return. The contract should state whether free days are calculated from discharge or from empty return; otherwise the per-container charge is allocated incorrectly in the DDP comparison. In bulk silo truck deliveries of LDPE, the equivalent adjustment is pumping and demurrage at the receiving site, usually expressed in USD/hour or EUR/hour after free time. These charges are nonlinear and cannot be converted by the kg-to-ton factor alone; they must be divided by the actual delivered mass in kilograms.

Unit price comparison between LDPE per kg and per ton is therefore a two-stage calculation: first, confirm the mass denominator and currency unit; second, rebase every offer to a common Incoterms and delivery address. The first stage is arithmetic; the second is contractual and freight-cost modeling. In operational practice, the largest observed errors are not decimal errors in unit conversion but basis errors in which a CFR quote is compared with a DDP quote as though the unit difference were the only variable. A normalization worksheet that separates the mass-denominator, grade-specification, currency, and Incoterm fields prevents that false equivalence. For any LDPE purchase, the contract should state the kg or metric ton basis together with the Incoterms 2020 rule and the named place; without those three references, the price is not auditable under a landed-cost review.