The Recycled Linear Low-Density Polyethylene (R-LLDPE) market in Germany witnessed a significant decline in September 2024, with prices reducing frequently throughout the month. By the last week of September, the price for R-LLDPE translucent pellets grade on FOB – Hamburg basis stood at USD 1,195 per metric ton, indicating a sharp decline compared to the previous weeks.

The R-LLDPE market in Germany saw an overall drop of about 6% over the course of September, driven by continuous oversupply and average demand from key downstream industries like packaging and construction. Though the market for R-LLDPE was somewhat stable at the beginning of the month, prices had decreased by 1.65% by mid-September. The packaging and construction companies, which are primary consumers of R-LLDPE, did not recover sufficiently to support price stability. Though the automotive and electronics sectors maintained moderate demand, it was not enough to balance the overall decline in consumption.

Throughout the month, market participants continued to report high inventory levels, further increasing the downward pressure on prices. The steady inflow of R-LLDPE supplies from European and Asian regions created an oversupply situation, forcing suppliers to make significant price reductions. As a result, R-LLDPE prices saw a sharp drop of about 4% in just one week during mid-September, indicating the challenging market dynamics faced by recyclers and suppliers alike.

One of the major contributing factors to the R-LLDPE market imbalance was the continued decline in energy costs. With crude oil and natural gas prices remaining weak, production costs for R-LLDPE also dropped. This reduction in production costs allowed manufacturers to maintain high output levels, further intensifying the oversupply scenario. Additionally, increased availability of post – consumer LLDPE encouraged recyclers to sustain their production rates, even as the demand from the packaging and construction sectors remained sluggish.

As days passed by, it became evident that the oversupply conditions in the R-LLDPE market would not be alleviated in the near future. The steady price cuts observed throughout the month resulted in a cumulative price drop of about 6% by the last week of September, with no significant recovery in sight. Despite efforts by suppliers to manage their inventories through price discounts, the market outlook for R-LLDPE for the rest of the year remains uncertain.

Moving forward, market observers at ChemAnalyst predict that unless there is a notable improvement in demand from key downstream industries, the R-LLDPE market in Germany will continue to face reduction in prices. The automotive and electronics industries may provide some support, but demand from packaging and construction will be crucial for any potential recovery in prices. Additionally, if energy prices remain low, recyclers may maintain high production levels, further contributing to the oversupply in the market.

Overall, September was a challenging month for the R-LLDPE market in Germany, with significant price reductions. The market is in a fragile state due to oversupply and reduced demand, making the future outlook for prices uncertain.