LLDPE Prices Remain Stable in the United States and Europe, Mixed Outlook in Asian Market

In the first week of August, Linear Low-Density Polyethylene (LLDPE) prices remained relatively consistent in the United States and Europe. Meanwhile, the Asian market showed mixed outlooks. The stability in the pricing of LLDPE can be linked to consistent demand from downstream packaging, automotive, and construction industries. The LLDPE prices were also influenced by the costs of feedstock Ethylene, and economic conditions played a role in shaping consumer attitudes. Europe encountered difficulties due to rising inflation, while the USA and Asian markets exercised caution in their purchasing activities due to uncertain market conditions. However, there was an apparent increase in consumer demand, particularly in the Asian market for LLDPE.

LLDPE prices in Germany experienced a stable trend as feedstock Ethylene prices remained steady. In recent months, the European market has struggled with escalating challenges, propelled by a combination of factors, including rising inflation rates and persistent market uncertainties. The prevailing economic deceleration plays a substantial role in increasing the prevailing market conditions within the region. However, the traders have managed to keep the LLDPE prices firm as consumers made need-based purchases. While the inflation rate in Germany, according to Eurostat figures, has decreased from 6.8% in June 2023 to 6.5% in July 2023 (in comparison to the corresponding month of the previous year), it remains elevated enough to influence the market conditions within Europe.

In the USA, the LLDPE market has experienced stagnancy, backed by the demand inquiries originating from the downstream packaging and construction sectors exhibited a consistent pattern during this period. Demand remained firm, as certain processors aimed to fulfill their regular requirements ahead of schedule in the month. Meanwhile, some opted to acquire packaged truckloads to address shortages caused by delayed railcar deliveries. Additionally, sellers engaged in purchasing to restock their diminished inventories. The product's availability remained relatively limited, and the lower end of the pricing range continued to provide support.

The Asian market for LLDPE showed mixed sentiments as the prices remained stable in China, South Korea, and Japan, while an incline in prices was observed in India, Thailand, and Singapore. The Chinese market witnessed relatively stable LLDPE prices due to moderate demand. This price steadiness can be attributed to higher import quotations from global suppliers and increased energy expenses. Further, cautious inventory management by manufacturers led to low operating rates within the domestic market. While many downstream purchasers maintained a positive outlook regarding the immediate market prospects, importers refrained from accumulating substantial inventory due to currency volatility and the anticipated receipt of shipments from North America between August and October.

Meanwhile, this week, LLDPE prices in India experienced an upward trend due to the consistent feedstock Ethylene prices and increased downstream demand. Despite the onset of the monsoon season in India, there has been a significant rise in demand for LLDPE, primarily driven by a positive momentum within the construction sector. Sellers have observed a significant uptick in buyer inquiries. In contrast, the LLDPE downstream agricultural sector has encountered adverse effects, with reduced activity evident in the northern and western regions of the nation.

In plant news, PetroChina Dushanzi Petrochemical shut its LLDPE plant on 25th July 2023 for a maintenance turnaround. The period of shutdown can not be ascertained. The plant is located in China and has a 300,000 mt/year capacity.

As per ChemAnalyst, the prices of LLDPE are expected to rise globally this quarter owing to the increased demand from the downstream sectors and the anticipated surge in feedstock Ethylene prices. The economic conditions are expected to improve, which may impact the consumer consumption rate of  LLDPE in the third quarter.