Dampening Raw Material Prices and Weak Demand Impact the Linear Alpha Olefins Market Globally
- 21-Sep-2022 3:05 PM
- Journalist: Gabreilla Figueroa
The global Linear Alpha Olefins market has been plunging since the first week of September. Declining upstream Ethylene prices backed the price drop of Linear Alpha Olefins. Also, the plant shutdown in certain countries has impacted the Linear Alpha Olefins prices.
In APAC, Linear Alpha Olefins follow the plunging price trend of upstream Ethylene. The production rate is moderate as the demand for the product was soft in the Asian markets. Also, Thailand’s Ethylene manufacturer Rayong Olefins shut down its plant for maintenance in mid-September. Although, the shutdown has not caused severe supply chain disruption as the consumer requirement was poor. The Asian countries have sufficient stockpiled products coupled with weak buying sentiments. Hence, the buyers preferred to purchase goods on a spot price basis over the contractual prices.
The European Linear Alpha Olefins market is dampening due to the low import cost from the Asian countries. Besides, the freight charges from Asia to Europe are dropping because of the ease in port congestion. Despite the rising energy crisis and high production costs, the operating rates were low as the consumer needs and purchasing activities were soft.
In addition, the requirement from the end-use packaging sector was low in the USA, further pulling down the Linear Alpha Olefins prices. The downstream derivatives LLDPE, HDPE, and LDPE, follow a downtrend in the USA domestic market; thus, the demand for Linear Alpha Olefins has declined. Additionally, the ample availability of upstream Ethylene and the declining Natural gas prices further impacted the Linear Alpha Olefins prices to fall.
According to ChemAnalyst, the Linear Alpha Olefins market will likely be weak in the coming weeks due to the consistent drop in demand for the product. If Thailand’s Ethylene plant resumes its production, the supply of upstream Ethylene might be smooth, which could impact the Linear Alpha Olefins prices. Moreover, the demand for Linear Alpha Olefins and their derivatives might remain weak in Europe and USA.