US LDPE Market on the Rise, European Market Faces Price Decline in October 2023

In October 2023, the price of Low-Density Polyethylene (LDPE) in the US and European markets showed mixed market sentiments, primarily due to fluctuating demand patterns during this period. LDPE market sentiments were influenced by several factors, such as the prices of its feedstock Ethylene and upstream Crude oil and the demand from downstream packaging, construction, and automotive industries. Additionally, supply disruptions resulting from plant shutdowns and prevailing economic conditions influenced LDPE price trends. The LDPE prices increased this month in the USA, while a depreciating trend was observed in the European region.

During this month, the US LDPE Film grade prices surged by 3% as the feedstock Ethylene costs increased amid rising demand from the downstream packaging and automotive industries, which has impacted the pricing of the material. Global feedstock Polyethylene (PE) prices have been increasing due to the influence of fluctuating Crude oil prices; nevertheless, when Crude oil prices decreased earlier in the month, the upward trend in PE prices slowed down. Despite this, there remained strong international demand for US LDPE as demand stayed robust throughout the month. Traders secured LDPE for short-term needs and selectively replenished their inventories while the export requests continued to flow, with significant quantities going to Europe, Mexico, and South America. This shift in demand was a response to increased buying driven by concerns about geopolitical tensions, including the Hamas terrorist attack on Israel and the potential for regional conflicts. Furthermore, the newly commissioned PE unit by Baystar in Texas is expected to boost the overall supply of PE, which may impact LDPE prices in the future.

The LDPE prices witnessed a depreciation of 1%  for Injection Molding grade FD Hamburg(Germany) due to subdued demand amid inflation and ample stock availability in the region. The reduction in the cost of upstream Naphtha has further contributed to the declining pricing trend of the product in European countries. Furthermore, the elevated interest rates set by the European Central Bank and reduced export activity due to the global economic slowdown have impacted the Eurozone's economic conditions and LDPE's pricing trend.

In plant news, Chevron Philips Chemical shut its Ethylene unit in mid-October 2023 for a maintenance turnaround. The duration of the shutdown is not ascertained. The plant is located in Port Arthur, Texas, in the US, and has a plant capacity of 835,000 mt/year.

As per ChemAnalyst, the LDPE market is anticipated to remain subdued in the global market by the end of this year owing to the expected decline in the upstream Naphtha costs and lackluster demand from the downstream industries. The inquiries for LDPE in the US and European markets may be impacted by global economic conditions and geopolitical tensions, which may influence consumer purchasing sentiments.