LDPE Prices in US and European Markets Display Volatile Trend in September 2023

Low-Density Polyethylene (LDPE) prices in the US and European markets during the first half of September 2023 showed a mixed trend, primarily due to varying demand patterns. LDPE price trends were influenced by several factors, such as the prices of its feedstock, Ethylene, and upstream Crude oil and the demand from downstream, such as the construction and packaging industries. Additionally, supply disruptions resulting from plant shutdowns and prevailing economic conditions influenced LDPE price trends. In the US, LDPE prices remained stable throughout H1 of September 2023, while European LDPE prices experienced depreciation in the second week of September 2023.

Throughout this period, the LDPE market in the USA remained stable, consistent with the trend observed in previous weeks. Despite the rising prices of feedstock Ethylene and upstream Naphtha, the demand from downstream sectors remained steady, which prevented any significant changes in LDPE prices. Further, LDPE availability decreased as most producers had already sold out their stock, indicating a tight market situation expected to persist into September. Furthermore, on September 14, 2023, Nova Chemicals declared a Force Majeure for HDPE and LDPE resins produced at their facilities in Ontario, Canada, due to an unexpected shutdown at the Corunna Cracker plant, which supplies feedstock Ethylene to the Moore and St. Clair sites. Furthermore, during the month of August 2023, the manufacturing sector in the United States witnessed its tenth consecutive month of contraction. Nevertheless, there was a noticeable deceleration in the pace of decline in the PMI value, indicating that the sector might be nearing a state of stability, albeit with reduced levels of production compared to previous periods.

During the end of the first half of this month, the European LDPE prices saw a 4% decrease due to subdued demand and ample stock availability in the region. The downstream construction sector experienced subdued demand due to higher interest rates and cautious consumer behavior. Despite a surge in feedstock Ethylene prices, traders lowered LDPE prices to attract customers because of the lackluster demand. Additionally, typhoons in the Asian region raised concerns about service disruptions between Asia and Europe. Moreover, with the approaching Chinese National Day holiday, known as Golden Week, factories in China shut down, leading to decreased production and reduced demand for container shipping to and from Asia, potentially impacting LDPE prices in the near term.

According to ChemAnalyst, LDPE prices are expected to move upward due to robust consumption in downstream sectors and limited stock availability in the global market. The expected increase in feedstock Ethylene and higher prices for upstream Naphtha and Crude oil may impact the pricing trajectory of the product.