LDPE Market Sees Price Variances Amid Strong US Demand, Asia Faces Supply Challenges

The global Low-density Polyethylene (LDPE) market witnessed varied trends with significant price shifts across major regions in the past week. The US observed a rise in LDPE prices due to strong domestic demand with the summer peak season as well as the onset of hurricane season. In contrast, Europe saw LDPE prices fall as suppliers reduced prices to align with stable Ethylene contracts amid weak demand and ample supply. Meanwhile, in Asia, despite falling raw material and energy costs, LDPE prices rose due to higher shipping costs, and supply shortages exacerbated by vessel congestion. As a result, Film FD Hamburg prices for European LDPE decreased by 2%, prices for Chinese LDPE Adhesive film grade CFR Shanghai experienced a surge of 1%, and USA LDPE Film grade FOB Texas surged by 2% for the week ending on June 14, 2024.

In the second week of June 2024, LDPE prices in the USA soared as higher initial asking prices for railcars attracted keen buyers amid robust domestic demand. The market experienced heightened activity with steady spot demand and numerous transactions across all resin grades. Earlier in the month, processors placed large orders to meet short- to mid-term needs, while resellers bought truckloads to mitigate delayed railcar deliveries, further boosting spot demand. This increase in LDPE demand coincided with the unofficial start of summer, a peak season for key industries such as construction, automotive, and packaging, as well as the onset of hurricane season.

In Europe, LDPE prices faced downward pressure as suppliers cut prices at the start of June to match stable ethylene contracts amid low demand and reduced costs. Distributors expect further price declines in the coming weeks due to weak demand and ample supply. This outlook is driven by ongoing challenges in the European chemical industry, including global demand weakness, slow growth in the US, and a slowdown in China. Additionally, severe weather events in Germany, such as rain and flooding, caused evacuations and transport halts along the River Rhine, significantly disrupting logistics and exacerbating supply constraints, further impacting market dynamics.

During this period, the Asian LDPE market experienced a price surge despite falling raw material and energy costs, driven by several complex factors. Buyers' attempts to secure price concessions were hindered by rising container shipping costs from Asia and strong US demand for polyethylene, keeping prices elevated. Local converters and distributors, facing an unexpected tightening of LDPE supplies, purchased in bulk, further straining the market. Further, severe vessel congestion at the Singapore transshipment port since May caused significant delays in import shipments, exacerbating the supply shortage and contributing to the price increase. This combination of supply chain disruptions, logistical challenges, and global demand dynamics significantly influenced market behavior during this period.