Bearish Sentiments for Linear Low-Density Polyethylene (LLDPE) in Europe

Hamburg, Germany: Following the plunge in the Asian countries, Linear Low-Density Polyethylene (LLDPE) prices have slumped in Europe for the last few weeks. During the week ending on 5th August, the value of LLDPE Film Grade dropped by 0.84% in Germany and 0.87% in the United Kingdom and assembled at USD 1780/MT FD Hamburg and USD 1709/MT FD Surrey in the respective regions. The ChemAnalyst researchers are suggesting that the plummeting LLDPE market in China has brought this decline in European LLDPE market value.

China has been witnessing a deteriorating market sentiment for Linear Low-Density Polyethylene For several weeks, and recovery is not expected in the short term. The Chinese LLDPE market has been experiencing an oversupply amidst overflowing inventories. As the freight-container market has been lengthening globally, the Chinese manufacturers and traders have been loosening their burden by exporting the stocks to European countries and causing a consistent rate of supply in the region. Furthermore, the price value of feedstock Ethylene has been dropping as well, causing the manufacturing cost of LLDPE to reduce, hence leading to a lesser value of LLDPE in the domestic market of Europe.

Additionally, crude oil prices have been showing minimal fluctuations for the last two days owing to steadiness in the dollar market. As the crude oil prices are not flickering much, it has been controlling the extra expenditure involved in the Linear Low-Density Polyethylene production in terms of energy costs. Moreover, the offtake of LLDPE from the films and packaging industries has been reducing, resulting in lesser demand for the commodity and its falling market value.

As per ChemAnalyst anticipations, “The European market is likely to witness a downward trend in Linear Low-Density Polyethylene (LLDPE) prices amidst more exports from China and surplus availability of the commodity. Furthermore, a drastic surge in the downstream demand could stop the prices from going further down, but that is unlikely to happen in the short term.”