In the global market, Polyolefin Elastomer (POE) prices experienced a notable decrease by mid-August. This decline is primarily attributed to reduced demand from downstream and overseas markets, leading to decreased POE consumption across these sectors. In contrast, the price of Ethylene, a key feedstock, saw a significant surge, which has counteracted the pricing dynamics of POE. The market is currently characterized by ample inventory levels, prompting suppliers to manage inventories cautiously due to weaker demand. These factors have collectively contributed to the downward pricing trend of POE in the regional market.

In the German market, POE prices declined by mid-August, reflecting a downturn in sector demand amid reduced activity in key industries. Despite a 4.5% rise in Ethylene prices, signaling supplier efforts to rebuild margins after a period of decline, the overall market dynamics remain challenging. Lyondell Basell, a major polyolefin-based polymers manufacturer in Europe, reported a $56 million increase in EBITDA compared to Q1 2024, with Olefins results improving by about $40 million due to higher margins driven by increased Ethylene sales prices and greater use of advantaged LPG feedstocks. However, modest seasonal demand and high shipping costs have limited EU imports from the Middle East and Asia. The automotive sector saw a 19.9% decline in new vehicle sales in July compared to June, with 238,263 units sold, reflecting a 2.1% drop from July 2023. Germany’s construction sector remained in contraction at the start of Q3, although the rate of decline eased for the third consecutive month, with the Construction PMI showing a slight increase but still below the threshold, indicating ongoing underperformance. This decline in the POE price is primarily attributed to a downturn in sector demand, with key industries showing reduced activity. 

In the U.S. market, POE prices have recently decreased to 2,840 USD/MT FOB-New Orleans. This downward trend is primarily driven by market participants lowering their ex-quotation prices due to an imbalance in the supply and demand ratio and sufficient inventory levels. Despite a 10.4% rise in Ethylene prices, a key feedstock, the overall market conditions have exerted pressure on POE pricing. According to updates from Dow Inc., net sales reached $10.9 billion, reflecting a 4% year-over-year decline but a 1% sequential increase, with Performance Materials & Coatings and Packaging & Specialty Plastics contributing to this growth through a 1% volume increase in the U.S. & Canada. However, lower sales from manufacturers due to reduced downstream demand have cumulatively influenced the recent decline in POE prices in the U.S. market.

ChemAnalyst anticipates that POE prices are likely to exhibit a bearish trend in the upcoming sessions. This expected downturn in POE pricing is primarily driven by forecasts of weaker demand from major global economies particularly the European and the Chinese market. Ample inventory levels, combined with reduced demand from downstream markets, are expected to significantly influence the overall pricing dynamics of POE in the global market.