Ethylene prices depreciated in the U.S. during the first week of April, continuing the downward trend from late March despite rising feedstock naphtha prices. The reasons behind this price drop were oversupply and limited movement across the downstream segments. The demand for ethylene from downstream sector such as HDPE and LDPE remained relatively stable, while LLDPE price decreased slightly due to relatively soft demand from packaging and industrial applications. At the same period ethylene prices remained unchanged in Germany supported by stable supply-demand fundamentals and steady domestic production, despite a small change in the prices of feedstock naphtha.

Ethylene production in the U.S. sustained stability, resulting in an ample supply situation and elevated inventory levels. Manufacturing activity was firm, although, offtake activity waned in downstream segments including packaging and construction, which supported a bearish market sentiment. Overall, inventory levels remained high, and the supply-demand imbalance led to sustained downward price pressures on ethylene despite rising feedstock costs. Cautious market sentiment persisted, and market participants refrained from buying large volumes amid economic uncertainty.

Demand for HDPE and LDPE in the U.S. continued to be supported by steady consumption of packaging and food products. However, demand for LLDPE weakened further with the majority of the slowdown occurrence in the industrial and agricultural sectors. Overall, participants in the market anticipated subdued activity in the near term as economic headwinds remain present and inventories are stocked. Seasonal demand may provide some limited support in ethylene prices later in the month.

In Germany, ethylene prices were generally unchanged despite of a decrease in feedstock naphtha prices. The downstream market was mixed such as prices for HDPE and LLDPE decreased due to softening demand from packaging sector. while LDPE prices rose slightly, continued modest restocking and increased activity in film applications.

Germany's domestic production was largely unchanged, and inventories levels were sufficient to meet the demand. Despite different consumption trends among the downstream sectors, overall supply-demand remained steady which helped contain major price fluctuations in the period. Manufacturing activity also stayed on track as producers continued to operate consistently to meet current demand.

Looking forward, ChemAnalyst expects that, in the upcoming weeks ethylene prices in the U.S. and Germany will likely come under downward pressure. An ongoing oversupply condition and weak demand in the U.S. will likely put downside pressure on ethylene prices. In Germany, limited price support from weak downstream activity and cautious procurement is expected unless demand or regional trade improves. Sentiment across both countries to remain highly cautious.