In the first half of May 2024, Metallocene Linear Low-density Polyethylene (mLLDPE) exhibited different trends across the global market. Prices for mLLDPE decreased in major regions like the US and Europe but saw a slight rise in Asia particularly China. The main reasons for the price decline were weakened demand and a global oversupply of mLLDPE. Moreover, production expenses decreased as a result of reduced prices of feedstock materials like Ethylene, as well as upstream Naphtha and Crude oil. Geopolitical tensions, which disrupted supply chains, further pressured the market. Consequently, Chinese mLLDPE FOB Shanghai prices increased marginally by 0.4%.

The European market experienced a second consecutive month of decreasing mLLDPE prices in May, with initial offers reflecting substantial reductions rather than minor adjustments in some instances. This depreciation is primarily attributed to sufficient product availability, lackluster demand, and competitive offers from overseas traders, along with reductions in raw material costs. Market participants are now assessing whether these recent price cuts will stimulate sales, especially considering the shorter month due to holidays. The decrease in mLLDPE prices is linked to diminished demand from downstream sectors like construction, automotive, and packaging, exacerbated by the absence of competitive pressure stemming from less expensive imported materials. Even typically robust sectors in the spring, like construction and beverages, are not showing signs of recovery. Additionally, the decreasing cost of feedstock Ethylene by 10% has contributed to the overall drop in mLLDPE prices.

Similarly, in the United States, the mLLDPE market experienced a slowdown from the active trading seen in previous weeks. Prices trended downward due to a sufficient supply of the product in the regional market. This price pressure was exacerbated by falling costs of feedstock Ethylene and upstream Naphtha, along with a 3% decline in Crude oil prices. The decline in Crude oil prices occurred due to growing product inventories and worries about reduced gasoline demand in the US, resulting in a notable decrease in gasoline prices. Analysts noted that traders were purchasing prime mLLDPE railcars to replenish their stocks, while exports remained strong, albeit at slightly lower prices to facilitate transactions.

In contrast, the Asian market, particularly in China, saw a modest increase in mLLDPE prices driven by rising demand.  After the May Day holiday, the mLLDPE market gained momentum, experiencing a gradual increase in prices. Ongoing centralized maintenance at petrochemical plants has not heavily impacted PE supply, enabling manufacturers and traders to hike prices. However, post-holiday, downstream consumption slowed, and the agricultural film sector entered its off-season, diminishing its backing for the product. It's expected that the upward trend in PE prices will decelerate compared to April, possibly undergoing a minor correction.