The Linear Low-density Polyethylene (LLDPE) experienced varied trends across the global market in the first half of May 2024. LLDPE prices declined in key regions such as the US and Europe, while there was a slight increase in the Asian market. The primary factors for this price drop included weakened demand and an oversupply of LLDPE globally. Additionally, production costs fell due to lower prices of feedstock materials Ethylene, and upstream Naphtha and Crude oil. Geopolitical tensions causing disruptions in supply chains added further pressure to the market. As a result, LLDPE Film grade prices in Europe (FD Hamburg, Germany) decreased by 1%, US LLDPE Film Butene-based grade prices (FOB Texas) dropped by 2%, and Chinese LLDPE Film Extrusion grade prices (FOB Shanghai) rose slightly by 0.3%.

In May 2024, the European market experienced a second consecutive month of declining LLDPE trend, with initial offers reflecting substantial reductions rather than minor adjustments in some cases.This downward trend is primarily driven by abundant supply, weak demand, and competitive offers from overseas traders, rather than a decrease in monomer contract prices. Market participants are now evaluating whether these recent price cuts will boost sales, particularly given the shorter month due to holidays. The decline in LLDPE prices is attributed to reduced demand from key sectors such as construction, automotive, and packaging, further exacerbated by the lack of competitive pressure from cheaper imported materials. Even typically strong sectors in the spring, like construction and beverages, are not showing signs of recovery. Moreover, the decreasing cost of feedstock Ethylene has contributed to the overall drop in LLDPE prices.

Similarly, in the United States, the LLDPE market experienced a slowdown from the active trading seen in previous weeks. The prices followed a downward trend due to ample supply in the domestic market. This price pressure was exacerbated by falling costs of feedstock Ethylene and upstream Naphtha, along with a general decline in Crude oil prices. The drop in Crude oil prices resulted from increasing product inventories and concerns about weakened gasoline demand in the US, leading to a significant decrease in gasoline prices. Analysts noted that traders were purchasing prime LLDPE railcars to replenish their stocks, while exports remained strong, though at slightly lower prices to facilitate transactions.

In contrast, the Asian market, particularly in China, saw a modest increase in LLDPE prices driven by rising demand. Following the May Day holiday, the LLDPE market showed positive momentum, with prices gradually increasing. The ongoing centralized maintenance period at petrochemical plants has not significantly strained PE supply, allowing manufacturers and traders to raise prices. However, after the holiday, the pace of downstream consumption slowed, and the agricultural film sector entered its off-season, reducing its support for the product. It is anticipated that the upward trajectory of PE prices will slow compared to April, possibly experiencing a slight correction.