Contrasting Trends in the LLDPE Market: European Prices Soar While Asian Market Softens

In the first half of August 2024, the Linear Low-Density Polyethylene (LLDPE) market exhibited contrasting trends across regions, with prices rising in Europe while declining in Asia. The European market experienced a price surge driven by supply constraints, despite subdued demand from downstream industries such as construction, packaging, and automotive. In contrast, the Asian market saw prices decrease, influenced by a drop in crude oil costs, which had a widespread impact on global markets. Regional market dynamics were further shaped by supply disruptions and seasonal factors, affecting downstream inquiries. Consequently, the price of LLDPE in Germany increased by 1.3%, while the Chinese LLDPE price decreased by 0.4% during this period.

The European LLDPE market experienced an upward price trajectory during this period, despite sluggish trading activity attributed to the ongoing seasonal summer lull, with many market participants refraining from business activities. The price gains were primarily driven by supply constraints, as Europe faced reduced import shipment inflows. Current pricing trends are largely influenced by supply-side factors, with market observers expecting a further decline in import volumes by the end of September. Additionally, a few August price settlements were reported over the past week, contributing to the upward pressure on LLDPE prices. The rising costs of feedstock Ethylene, driven by increasing upstream Naphtha prices, have further impacted LLDPE pricing.

Meanwhile, the Asian LLDPE market displayed signs of weakness as many downstream buyers exercised caution in making import purchases, anticipating an increase in domestic supplies. In Southeast Asia, market activity was subdued, with deals and selling indications guiding the assessment of PE import prices, as most suppliers had already concluded their sales for August shipment cargoes. Buyers viewed the market outlook as bearish, influenced by weakening demand for LLDPE in China, despite expectations of restocking activity by converters later in August to meet year-end demand. Although freight costs for import shipments from Northeast Asia, including China and South Korea, remained elevated, market participants noted a gradual easing due to improved container availability. Reduction in freight rates could lead to an influx of competitively priced material, particularly in comparison to Middle Eastern cargoes.

According to ChemAnalyst, the market trend for LLDPE is expected to persist in the coming weeks. In Europe, LLDPE prices may continue to rise due to ongoing supply constraints, even as demand potentially declines further. Meanwhile, the Asian market is likely to see continued easing, influenced by the monsoon season, which could further impact product pricing. These regional dynamics are expected to shape the LLDPE market, with supply-side factors and seasonal variations playing crucial roles in determining future price trends.