The global market price of Polyolefin Elastomer (POE) experienced a notable decline by mid-December. This decrease in the POE price is primarily linked to the prolonged underperformance of Ethylene prices over recent months. Additionally, limited demand recovery from downstream markets, coupled with sluggish economic activity and abundant inventories among market participants, suppressed bidding activities. These factors collectively exerted downward pressure on POE prices, reflecting muted market sentiment and highlighting the influence of oversupply and weak economic conditions on pricing dynamics.

As of mid-December, POE prices in Germany witnessed a reduction, primarily driven by weak demand from the downstream market and lower feedstock prices, with Ethylene registering a 10.1% decrease in November. The European economy's overall underperformance has compounded the situation, with market participants exhibiting pessimistic behavior in managing inventories. Additionally, the Ifo Business Climate Index declined to 85.7 in November from 86.5 in October, reflecting a drop in confidence due to political uncertainties and concerns over potential U.S. trade tariffs. These factors have collectively dampened supplier actions and market sentiment, significantly influencing the downward trajectory of POE prices.

POE prices in the Japanese market have declined as of the mid-week of December, driven by weaker demand across key downstream sectors. The automotive sector showed reduced activity, with total vehicle sales in November declining by 3.2% from October and 5.2% year-over-year, as reported by the Japan Light Motor Vehicle and Motorcycle Association. Despite robust construction activity, evidenced by a 44.6% year-over-year surge in orders in October and a 2.4% rise in the Nikkei 500 Construction Index in November, cautious buying sentiment persisted for POE products.

In the packaging sector, Mitsubishi Chemical reported weakness in automotive and food packaging materials, with year-on-year declines in barrier material sales. However, efforts to sustain prices for other POE materials and a JPY 4.8 billion increase in sales volume helped offset some challenges. Ample supply of POE compounds, coupled with strategic inventory management by suppliers, has further pressured prices, reflecting subdued market conditions across various industries. This highlights ongoing price challenges in the POE market despite sector-specific variances.

As per ChemAnalyst anticipation, the price of POE is expected to exhibit bearish trends in the upcoming sessions. This projection in the POE price is primarily attributed to the anticipated underperformance in the prices of key feedstocks, Ethylene and Olefin monomers, which could reduce overall production costs for POE. Additionally, ample inventories held by market participants are likely to trigger lower bidding activity, further exerting downward pressure on POE prices in the near term.