Global LLDPE Prices Show Optimistic Trend Amid Rising Feedstock Cost and  Bullish Demand
Global LLDPE Prices Show Optimistic Trend Amid Rising Feedstock Cost and  Bullish Demand

Global LLDPE Prices Show Optimistic Trend Amid Rising Feedstock Cost and Bullish Demand

  • 08-Nov-2023 2:03 PM
  • Journalist: Shiba Teramoto

In October 2023, the US and European markets for Linear Low-Density Polyethylene (LLDPE) experienced a positive outlook, primarily driven by strong demand trends during this period. Several factors, such as the prices of its feedstock, Ethylene, and upstream Crude oil, and the demand from downstream industries such as packaging, construction, and automotive, influenced the market sentiment for LLDPE. Further, disruptions in the supply chain resulting from plant shutdowns, shipping backlogs in the Panama Canal, and prevailing economic conditions impacted the LLDPE price trends.

Throughout the month, US LLDPE Film Butene-based grade prices surged by 7% due to rising feedstock Ethylene costs caused by increased demand from downstream sectors like packaging and automotive. Global Polyethylene (PE) prices experienced an overall upward trajectory due to the influence of fluctuating Crude oil prices. However, when Crude oil prices decreased earlier in the month, the upward momentum in PE prices slowed. Nevertheless, there was sustained strong international demand for US LLDPE, and traders procured it for short-term needs while selectively replenishing their inventories. Export requests continued to flow, with substantial quantities being sent to Europe, Mexico, and South America. The increment in demand was a reaction to heightened purchasing activity prompted by concerns related to geopolitical tensions, including the Hamas terrorist attack on Israel and the possibility of regional conflicts. Further, demand for the product has not improved in the meantime, but the higher production costs have been the cause for these recent increments in LLDPE prices.

During October, European prices for LLDPE Film grade FD Hamburg (Germany) increased by 7%, primarily due to the higher prices of the feedstock Ethylene. Market sources have reported that European Polyethylene (PE) producers have been under significant cost pressures for an extended period while the demand fundamentals have remained low, affecting their profitability. To alleviate these ongoing cost pressures, European PE manufacturers decided to raise the prices of their products during this period. Additionally, global Crude oil prices have fluctuated frequently and stayed at elevated levels for the past few weeks, contributing to the upward movement in LLDPE prices in the European region. Despite these price increases, demand for the product has not shown significant improvement during this time. Instead, the recent increments in LLDPE prices can be attributed to the higher production costs faced by manufacturers.

In plant news, Chevron Phillips Chemical temporarily closed its Ethylene (feedstock) unit for a scheduled maintenance turnaround in mid-October 2023. The duration of the shutdown has not been ascertained. The plant is located in Port Arthur, Texas, in the US, and has a production capacity of 835,000 mt/year.

According to ChemAnalyst, the global LLDPE market is expected to stay relatively slow by the end of this year. This is primarily due to the anticipated decrease in the prices of upstream Naphtha and the lack of strong demand from downstream industries. Furthermore, inquiries for LLDPE in both the US and European markets might be influenced by global economic conditions and geopolitical tensions, potentially affecting consumer purchasing sentiment.

Related News

Dow-Mitsui Polychemicals Setting the Standard with ISCC PLUS Certification
  • 24-Jun-2024 9:01 PM
  • Journalist: Harold Finch
Global LLDPE Market Faces Varied Trends Amid Supply Chain Disruptions
  • 21-Jun-2024 6:25 PM
  • Journalist: Jung Hoon
LLDPE Faces Divergent Trend as Europe and US Markets Dwindle with Asia Sustaines Stability
  • 03-Jun-2024 3:53 PM
  • Journalist: S. Jayavikraman
Global LLDPE Market Dips Amid Excess Supply and Low Demand in April 2024
  • 22-Apr-2024 6:15 PM
  • Journalist: Jung Hoon