Ethylene prices in the U.S. and Germany differed the first half of July, driven by regional supply, demand and logistical conditions. In the U.S. prices increased significantly in the first week due to tight supply, refinery maintenance and momentum of strong exports particularly to Asia. The second week saw marginally higher prices amid steady production and stable domestic demand. In Germany, prices increased at the beginning of July due to disrupted transport conditions but receded in the second week as domestic demand softened and inventories remained high. Prices are likely to be higher going forward given tightening supply conditions and firm demand globally.
In the first two weeks of July, ethylene markets in the USA and Germany took different price paths, largely due to regional supply, demand and logistical variations.
In the USA, ethylene price jumped 6.8% in the first week of July, despite a 7.6% drop in the feedstock naphtha price. The drop in naphtha is linked to a weak crude oil market, which saw WTI crude drop by 2.8%. The price movement was influenced by continued variables on the supply side with several producers continuing planned maintenance. This produced limited spot cargoes available, tight availability, logistics issues, and poor inventory replenishment. On the domestic side, demand was soft overall. LDPE and LLDPE prices stayed steady, indicating steady offtake and lower in stock. HDPE prices increased a bit, predominately supported by demand from packaging and moulding. Export demand has supported price strength also, with continued demand in places such as China, Indonesia, and Belgium for US cargoes, supporting export-oriented demand sentiment.
In the second week, prices slightly increased marginally by 0.06%, reflecting the rise in feedstock naphtha prices as WTI crude rebounded by 1.9%. U.S. ethylene production held steady, with Gulf Coast crackers operating normally. While drilling activity was down, energy markets still saw support from strong refinery operations and consistent export flows through key hubs like Houston and New Orleans. On the demand side, domestic LDPE and LLDPE remained steady, while there was slightly less demand for HDPE. Export markets continued to provide price support with buyers, primarily in China and Belgium, actively buying volumes ahead of potential feedstock volatility.
At the same time in July, Germany ethylene prices surged by 6.1%, despite feedstock naphtha prices stable. The rise was due to significant transport disruptions for ethylene deliveries, the result of major port congestion and rail disruption in Hamburg that limited supply and caused delays. Overall, the downstream market was mixed. HDPE demand improved slightly, LDPE was stable while LLDPE demand was weaker noted particularly in film and agriculture demand. The domestic market remained tense as logistics restricted supply and caution in purchasing shaped market behaviour.
In the second week, however, ethylene prices fell by 2.3% despite 2.8% increase in feedstock naphtha. The domestic demand did weaken, and polyethylene converters were less willing to aggressively re-stock. HDPE remained slightly strong, but LDPE and LLDPE remained stagnant. Local ethylene production remained steady but very little spot activity nor pressure with high inventory limited bullish sentiment. With summer holidays and maintenance periods approaching, inventory control and market caution dominated, keeping prices under downward pressure.
Looking ahead, ChemAnalyst expects that ethylene prices are projected to rise in the near future as supply on global markets tightens, refinery maintenance continues, and naphtha and crude oil costs rise. On the upside, continued strong export demand for Ethylene from Asia, particularly China, in addition to resilient domestic demand from packaging and plastics uses is expected to bolster price increases across all major markets.
