mLLDPE Prices Escalate in the US while Stability Prevails in China in February 2024

In the initial half of February 2024, the Metallocene Linear Low-Density Polyethylene (mLLDPE) market experienced a notable surge in spot prices in the US while China showed stability by the end of the second week. The US market saw a significant uptick in purchasing activities in February 2024, spurred by heightened consumer demand from downstream construction and packaging sectors. Market observers noted a marked increase in mLLDPE transactions, with buyers demonstrating heightened interest and preparedness to make purchases. Meanwhile, the Chinese mLLDPE market was initially affected by the Lunar New Year festivities, witnessing price increments following stabilization by the second week of the month. This market dynamic was further exacerbated by tight supply from the Middle East, impacting material availability and influencing price trajectories. Additionally, the escalation in the price of feedstock Ethylene exerted cost pressures on mLLDPE.

Throughout this period, demand for mLLDPE in the USA remained robust, fueled by both domestic and international buyers gradually leading to the upward price trend. Nevertheless, there was a steady influx of off-grade railcars into the market. Producers continued to restrict mLLDPE availability, redirecting surplus supplies to the flourishing export market. Further, resellers encountered diminishing stocks, although previously overlooked high-cost inventories are now resurfacing as prices climb and losses diminish. Moreover, the mLLDPE trading remained robust, with spot availability tightening and prices steadily rising, driven by persistent demand from the export market willing to pay premium prices for resin while absorbing surplus supplies. The mLLDPE market in the USA appears favorable with international resin prices on the rise, supported by escalating overseas freight costs. US producers not only benefit from a feedstock Ethylene cost advantage but also benefit from favorable geographic positioning, resulting in cheaper and quicker freight options when shipping resin to Europe and the East Coast of Latin America. These regions are particularly affected by logistics constraints in the Red Sea and Panama Canal, enhancing the competitiveness of US mLLDPE in these markets.

In China, the mLLDPE prices surged initially and remained steady as the market experienced a slowdown in trading activities as the Lunar New Year holiday approached, prompting most downstream factories to commence an early shutdown in anticipation of the holiday break. While some suppliers attempted to implement fresh price increases for mLLDPE, citing escalating upstream costs, elevated freights, and constrained US and Middle Eastern availabilities, acceptance remained limited due to sluggish market conditions and reduced downstream demand. Despite the current slowdown, there is optimism for post-holiday demand recovery of mLLDPE, particularly with the peak season for downstream agricultural films looming in March. Positive macroeconomic developments expected at the end of February may alleviate market pressures, but buyers may not immediately return from the holiday with full purchasing enthusiasm, potentially resulting in a market equilibrium between elevated costs and moderate demand during the latter half of the month. Furthermore, import availability of mLLDPE from the Middle East is anticipated to remain constrained in the coming months due to ongoing and forthcoming maintenance turnarounds in the region.