Global LDPE Prices Drop in West, Hold Steady in Asia Amid Bleak Demand and Crude Oil Decline

The global Low-Density Polyethylene (LDPE) market exhibited mixed trends in the past week, with a generally subdued outlook. In Europe and the USA, LDPE prices continued to decline due to weak demand from key sectors like construction, packaging, and automotive, which are grappling with economic challenges. In the Western market, reduced feedstock costs, particularly for Ethylene and Naphtha, also eased pressures on manufacturers, contributing to softer LDPE prices. Meanwhile, the Asian market remained stable, with consistent LDPE prices. Additionally, falling Crude oil prices, influenced by maintenance shutdowns at Chinese refineries and weaker refining activities, impacted market dynamics. By the week ending October 18, 2024, LDPE Film grade prices in Hamburg, Germany, fell by 2.4%, and in Texas, USA, by 1.6%, while LDPE Adhesive Film grade prices in Shanghai, China, remained unchanged.

This week, LDPE prices in Europe experienced a decline, largely driven by decreasing Ethylene feedstock costs and weak trading activity. Buyers remained hesitant to make large purchases, anticipating further price reductions, while sellers aimed to reduce their inventories amid shrinking demand from key downstream sectors, signaling a broader market slowdown. Additionally, lower freight rates from Asia to Europe increased product availability, applying further downward pressure on prices. However, trade volumes in these routes appear to have moved beyond peak demand levels, in contrast to transpacific routes, which have had a notable influence on global LDPE price trends.

Similarly, the LDPE market in the USA remained bearish due to subdued demand from downstream industries, prompting a cautious outlook among market participants in both domestic and international markets. Easing Ethylene and upstream Naphtha feedstock prices further influenced this sentiment, as moderate demand conditions persisted. Additionally, declining Crude oil prices, driven by reduced demand from China and disruptions in West Asia, added complexity to market dynamics. Hurricane Milton, which hit Florida's west coast, significantly impacted logistics, causing power outages, and leading to the temporary closure of the Port of Tampa Bay. This disruption delayed shipments and exacerbated existing supply chain challenges.

Meanwhile, the Asian LDPE market remained stable, with demand hovering at moderate to low levels and supply adequately meeting market needs. Import negotiations saw some improvement, leading to a slight rise in bids for November-December shipments. Overseas sellers are anticipated to begin offering cargoes for November loading by late October, which may impact the market outlook. However, import services from the Indian Subcontinent continued to face challenges, as peak season demand led to capacity constraints, adding further complexity to the region's market dynamics.

According to ChemAnalyst, LDPE prices are projected to rise in November, driven by heightened procurement activity during the winter season across the global markets. Additionally, fluctuations in upstream crude oil prices and escalating tensions in the West Asian region are expected to impact freight rates, which could further influence the upward trend in LDPE prices.