In early February, the European and U.S. Linear Low-Density Polyethylene (LLDPE) markets experienced contrasting trends. While European LLDPE prices remained largely stable, the U.S. market saw a significant price surge due to supply disruptions, rising feedstock costs, and strong downstream demand.

Key Takeaways:

• LLDPE prices in Europe remained stable as balanced supply and moderate demand offset rising feedstock costs.
• LLDPE prices in the U.S. surged due to unplanned production outages, extended maintenance, and aggressive spot buying.
• Cold weather in the U.S. disrupted production, tightening resin availability, and prompting higher prices.

In Europe, LLDPE prices held steady as market participants navigated supply chain disruptions caused by adverse weather in northern Europe. While inland container networks faced delays and surcharges, overall demand from key industries, including construction and packaging, remained moderate. The gradual recovery of the Eurozone construction sector, supported by EU Recovery Funds, provided some stability. However, the automotive sector continued to struggle with weak sales, limiting the potential for LLDPE price increases.

Even though demand from major industries like construction, automotive, and packaging remained moderate to low, the steady recovery of the Eurozone’s construction sector offered some support. Government-backed urban housing and renovation projects, funded by EU Recovery Funds, have begun to drive up LLDPE demand. However, the automotive industry continues to struggle, as declining passenger car sales negatively affect market confidence.

Meanwhile, in the United States, LLDPE prices saw a strong upward movement, particularly for Film Butene based grade FOB Texas, which registered a notable increase of 1.8% in the first week of February. This rise was primarily driven by cold weather-induced production outages, which led to reduced resin availability. Extended maintenance activities further constrained supply, prompting aggressive spot buying from market participants looking to secure material in anticipation of continued price hikes.

Additionally, regulatory changes added complexity to the U.S. market. A temporary 30-day tariff suspension on imports from Canada and Mexico, combined with a 10% tariff on Chinese imports, influenced trade dynamics. Meanwhile, robust export demand from Europe, Africa, and South America further tightened domestic supply, supporting the upward price momentum.

ChemAnalyst anticipates LLDPE prices in Europe to remain stable in the near term, with potential for a slight uptick if feedstock costs rise further and weather-related logistics challenges ease. In contrast, the U.S. LLDPE market is likely to see continued price increases, driven by tightening supply, expanding manufacturing activity, and strong export performance. As winter conditions subside, production stabilization may help alleviate some of the pressure, but rising feedstock costs and global trade uncertainties are expected to keep prices elevated through February.