Global LLDPE Market Faces Varied Trends Amid Supply Chain Disruptions

The global Linear Low-density Polyethylene (LLDPE) market exhibited varied trends and significant price fluctuations in major regions over the past week. In the United States, LLDPE prices increased due to strong domestic demand driven by the summer peak and the onset of hurricane season. In contrast, Europe experienced stable LLDPE prices amid consistent feedstock Ethylene contract prices, owing to the balance gap between supply and demand.  In Asia, despite a decline in feedstock Ethylene and energy costs, LLDPE prices increased. This rise was driven by higher shipping costs and supply shortages, which were further worsened by vessel congestion. China maintained price stability, while other Asian countries saw a surge. These factors have collectively influenced LLDPE prices in the global market.

In the second week of June 2024, LLDPE prices in the USA surged by 2% as higher initial asking prices for railcars attracted eager buyers amid strong domestic demand. The LLDPE market saw increased activity with firm market demand from the downstream industries. In this month, processors placed large orders to meet short- to mid-term needs, while resellers purchased truckloads to mitigate delayed railcar deliveries, further escalating LLDPE inquiries. This rise in LLDPE demand coincided with the start of summer, a peak season for key industries such as construction, automotive, and packaging, as well as the onset of hurricane season which prompted traders to stock the product ahead.

In Europe, LLDPE prices remained stable amidst weak demand and supply constraints. Stable feedstock Ethylene prices supported this trend as suppliers faced pressure at the beginning of June due to low demand and reduced costs. Distributors anticipate price declines for LLDPE in the coming weeks, driven by weak demand and abundant supply. This outlook is shaped by persistent challenges in the European chemical industry, such as weak global demand, sluggish growth in the US, and an economic slowdown in China.  Additionally, severe weather events, including rain and flooding, caused evacuations and transport stoppages along the River Rhine. This significantly disrupted logistics and worsened supply constraints, further affecting market dynamics.

During this period, the Asian LLDPE market experienced a price surge despite falling raw material and energy costs. China, however, showed stability due to firm demand. Market player's attempts to secure price compromises were hampered by rising container shipping costs from Asia and strong US demand for polyethylene, which kept prices elevated. Local converters and distributors, facing an unexpected tightening of LLDPE supplies, made bulk purchases, further straining the market. Additionally, severe vessel congestion at the Singapore transshipment port since May caused significant delays in import shipments in the Asian market, exacerbating the supply shortage and contributing to the price rise. This combination of supply chain disruptions, logistical challenges, and global demand dynamics significantly influenced LLDPE market behavior during this period.