In the span of four months since the initiation of the conflict between Israel and Palestine in the Red Sea and Suez Canal region, a discernible shift has occurred in the supply dynamics of polyethylene (PE). European, Turkish, and North African buyers have reportedly shown an increasing preference for American PE. US traders and distributors are noting a surge in consumer demand originating from across the Atlantic Ocean in the early months of 2024. Export data sourced from the US International Trade Commission reveals a notable uptick in shipments of polyethylene to various North African countries since the conclusion of the fourth quarter of 2023.

The upheaval caused by the conflict in the Red Sea has disrupted polyethylene shipments from the Middle East. In response to this disruption, US exporters have seized the opportunity to capitalize on the altered market dynamics, enabling them to gain a more significant market share.

This trend is anticipated to persist amid the ongoing conflict, creating a scenario where the availability of US exports is expected to decline in the short term. Consequently, European buyers express concerns about the security of their supply chains, a sentiment likely to persist until the culmination of the first half of 2024.

Sources in the industry point out that prices in the United States are particularly competitive within the region, especially for linear grades of low-density polyethylene and injection molded high-density polyethylene (HDPE). Noteworthy statistics indicate that monthly HDPE export volumes reached their highest point in 2023 for countries such as Nigeria, Algeria, and Poland in December. Tunisia, during the same month, experienced the second-highest HDPE export volumes in a year. Furthermore, Egypt received HDPE cargoes from the United States in December, marking the first occurrence since April.

The low-density polyethylene (LDPE) market also witnessed substantial activity. LDPE exports to Egypt reached their peak in November 2023. Additionally, LDPE outflows to Tunisia in December marked the second-highest volume in a year. The fourth quarter of 2023 saw continuous growth in LDPE exports to Tunisia, culminating in a noteworthy development where LDPE shipments from the United States to Egypt took place in December for the first time since August of the same year.

Polyethylene imports from the United States to Europe experienced a substantial uptick in the fourth quarter of 2023, registering an increase of approximately 24% when compared to the corresponding period in 2022. As 2023 drew to a close, the estimated consumption of polyethylene, excluding exports to Belarus and Kazakhstan, amounted to 3,109.15 thousand tons. This figure represents a substantial growth of 25% compared to the same period in the preceding year. Notably, there was an increase in supplies of both high-density polyethylene (HDPE) and low-density polyethylene (LDPE) from Russian producers.