Global LDPE Market Shows Divergence as US Prices Edge Up, While Asia Faces Downturn

The Low-Density Polyethylene (LDPE) market showed varying trends across the global markets, with a slight increase in prices in the US, while the Asian LDPE market experienced a downward trend. The rise in the US LDPE market was influenced by increasing feedstock Ethylene costs. A significant factor contributing to the reduction in prices was the decline in Crude oil costs, which had a widespread impact on the global market. Despite these price fluctuations, demand from key downstream industries, including construction, packaging, and automotive, remained relatively subdued by the end of the month.  Supply disruptions and seasonal factors continued to shape regional market dynamics and had an impact on downstream inquiries. As a result, the price of LDPE Film grade FOB Texas in the USA saw a slight increase of 0.8%, whereas the Chinese LDPE Adhesive Film grade CFR Shanghai decreased by 1% during the week ending on July 26, 2024.

The LDPE market in the USA followed an upward trend in this timeframe, with prices increasing marginally due to rising feedstock Ethylene costs. However, the export business weakened because of competitive offers from China, leading North American producers to consider flexible export pricing strategies to stay competitive in incremental sales and prevent inventory accumulation. Additionally, major energy markets experienced a downturn, with Crude Oil marking its third consecutive weekly decline amid ongoing demand concerns from China. Moreover, the potential for storms could disrupt petrochemical and plastics production, creating supply challenges that might affect prices in the region in the near future.

Meanwhile, the LDPE market in Asia faced depreciation amid bearish sentiment driven by falling international Crude oil prices. The drop in oil prices, mainly due to reduced demand from China, put downward pressure on LDPE costs, coinciding with the return of some polyethylene (PE) maintenance units expected to increase supply. Despite this, there are significant concerns about future demand prospects, even as crude oil prices continue to fall, with geopolitical tensions in the Middle East remaining stable. In China, while LDPE production has resumed with the reopening of facilities, market sentiment remains subdued. Additionally, Typhoon Gaemi's impact on Fujian province has added more uncertainty, with heavy rains and strong downpours potentially disrupting the supply chain and intensifying current challenges in the LDPE market.

As per ChemAnalyst, ongoing negotiations for August shipment cargoes might impact LDPE prices in the Asian market, as buyers remain cautious and seek more clarity on settlement prices in the upcoming weeks. In the US market, moderate demand is expected, with prices possibly being affected by freight rates due to peak season demand. Further, the interaction between global supply chain conditions and regional economic factors will likely play a significant role in shaping LDPE market trends in the near term.