In the late February 2025, North American ethylene market faced downward pressures, driven by low feedstock naphtha prices, while demand from the downstream low-density polyethylene (LDPE) industry also observed to be weak. In Europe, ethylene prices similarly faced downward trend under the conditions of a reduction in natural gas prices and weak demand from the linear low-density polyethylene (LLDPE) sector used for packaging and films. In combination, these forces proceeded to put downward pressure on prices in both regions.

In North American ethylene market, prices had consistent downward pressure due to low feedstock naphtha prices. The key raw material for ethylene production, naphtha, witnessed a significant price decline during this period. Yet, the naphtha market failed to revive from the previous insistence of low prices due to sluggish demand from overall low-density polyethylene (LDPE) producers.

LDPE producers’ assumptions were seen capping production, reducing procurement, and squeezed margins amid low demand from end-users. Also dampening demand from the LDPE segment in packaging and films, prices were generally going down along with the other downward shifts that developed in the overall market.

Additionally, inventories in the North American market were largely surplus, considerably decreasing the demand for immediate replenishment and restocking of supplies. That preponderance of inventory continued to provide a downward edge on pricing in late February, although the low feedstock costs were favourable, keeping the market subdued throughout the period.

Europe saw the ethylene price drop further in the late February, with the falls attributed to the lower natural gas prices and poor downstream demand from LLDPE. Since a large part of the production cost for ethylene comes from natural gas, the decline in natural gas prices also served to compress production costs on ethylene production.

However, the reduction in natural gas prices did not lead to increased demand for ethylene, as the LLDPE sector was still beset with low consumption levels that further depressed the demand. The LLDPE market struggled with lack of significant new orders and weak demand from key consumer sectors, causing reduced buying activity.

The outlook shows that both North American and European ethylene markets will remain cautious. Weak LDPE demand, along with soft feedstock prices in North America, suggests continued downward pressure. In Europe, stable natural gas prices and weak LLDPE demand will be likely to restrain potential price recovery. In general, prices in both regions are likely to watch side trends or see slight dips next week.