LLDPE Market Faces Diverging Trends in Early November 2024: Europe Slides, U.S. Holds Steady

In the first week of November 2024, the Linear Low-Density Polyethylene (LLDPE) market displayed contrasting trends across regions, with prices easing in Europe while remaining stable in the United States. The lackluster market sentiment was fueled by sluggish demand from downstream sectors, including packaging, construction, and automotive. In Europe, oversupply and destocking efforts contributed to a 0.8% decline in LLDPE Film grade FD Hamburg (Germany). Meanwhile, the U.S. market experienced price stability, with LLDPE Film Butene-based grade FOB Texas prices holding steady at USD 1090/MT, supported by balanced supply-demand dynamics and steady Ethylene feedstock costs. Global factors also influenced the U.S. market, as WTI Crude oil prices saw a slight uptick following OPEC+’s decision to extend output cuts of 2.2 million barrels per day through December, providing marginal support to petrochemical markets amidst otherwise lackluster demand.

The European LLDPE market experienced a downward price trajectory in early November, primarily driven by bleak demand and adequate material availability. Both domestic suppliers and imports have been focused on destocking as the year-end approaches, with producers and traders keen to reduce inventories. This market sluggishness was further exacerbated by a decline in feedstock costs, particularly Ethylene and Naphtha, which reduced production costs but failed to spark demand in key downstream industries such as packaging, construction, and automotive. The Eurozone's construction sector remains under significant strain, with October showing continued declines in housing activity and LLDPE demand plummeting as housing construction reached record-low levels. Sellers, under pressure to offload excess inventory, have contributed to oversupply, intensifying the downward pressure on LLDPE prices. While material availability remains abundant, the market sentiment remains weak, with limited prospects for a short-term recovery due to seasonal factors and ongoing destocking efforts by both producers and buyers.

In the U.S. market, LLDPE prices remained stable in the first week of November, supported by a balanced supply-demand dynamic and steady feedstock Ethylene prices, which helped maintain price consistency. Trading activity was moderate, with cautious but consistent interest from both domestic and international buyers. Demand from downstream sectors remained moderate to low, while supply levels were adequate to meet demand, allowing traders to keep LLDPE prices unchanged from the previous week. Overseas demand from Europe and Asia for LLDPE also remained moderate, while the higher import tariffs in Brazil, which took effect last month, dampened demand. Additionally, labor strikes at Canadian ports, such as those in Vancouver and Prince Rupert, led to operational disruptions, causing vessel delays and potential diversions to Seattle-Tacoma. Despite these challenges, the overall supply in North America remained sufficient, ensuring stability in the U.S. LLDPE market.

According to ChemAnalyst, the global LLDPE market is expected to experience a continued downward price trend throughout November and December 2024, primarily driven by year-end destocking efforts. Producers and traders are focused on reducing inventories as the year draws to a close, which is likely to put additional pressure on prices. Furthermore, feedstock costs, particularly Ethylene, are anticipated to continue influencing production costs, which may lead to a reduction in the overall cost of LLDPE. This combination of weaker demand and lower production costs is expected to maintain the downward price trajectory for LLDPE in the coming months.