mLLDPE Market Faces Challenges With Weak Demand in the US and Europe Amid Easing Cost pressure
mLLDPE Market Faces Challenges With Weak Demand in the US and Europe Amid Easing Cost pressure

mLLDPE Market Faces Challenges With Weak Demand in the US and Europe Amid Easing Cost pressure

  • 17-Nov-2023 2:45 PM
  • Journalist: Gabreilla Figueroa

During the initial half of November 2023, the Metallocene Linear Low-Density Polyethylene (mLLDPE) market in the United States and Europe witnessed a pessimistic trend. This was primarily influenced by a decrease in feedstock expenses and a surplus supply of mLLDPE in the regional market. The reduced demand from downstream sectors such as packaging and construction contributed to a decline in prices during this period. Further, the global market observed a decline in Crude oil prices easing cost pressures of mLLDPE production. The economic difficulties in Europe, worsened by high inflation, further, complicated market dynamics as consumer purchasing sentiments were adversely affected.

Throughout this period in Europe, the price of mLLDPE experienced a decline, driven by both reduced upstream Crude oil costs and subdued demand from downstream industries like packaging and construction. Feedstock Ethylene initially rose but later stabilized, while the prices of upstream Naphtha and Crude oil declined,  reducing cost pressures on mLLDPE. Furthermore, the mLLDPE market faced lackluster demand amid challenging economic conditions, contributing to sluggish purchasing activities. The prevailing sentiments were pessimistic, contrary to the typical demand patterns for mLLDPE this season. Market participants exhibited uncertainty regarding the short to medium-term direction of the market, resulting in cautious and minimal purchasing decisions. Additionally, inflation in the Eurozone increased by 0.1% in October 2023 compared to the previous month, according to Eurostat data. This uptick in inflation further influenced consumer purchasing sentiments in the region, contributing to the overall subdued market conditions.

In the USA, throughout this timeframe, the mLLDPE price followed a declining trajectory, influenced by the decrease in upstream Naphtha and Crude oil prices and subdued global market demand. While domestic demand for mLLDPE remained stable, export demand from Asian traders dwindled, and inquiries from Latin America and Europe were reduced. In response to the softer international sentiment, some producers adjusted their prices downward, possibly influenced by the declining Crude Oil prices. Moreover, FRED Economic Data indicated a 1% increase in the Producer Price Index (PPI) in October 2023 compared to the previous month, with expectations of this trend continuing into November 2023. Inflation persisted as well, as reflected in the Consumer Price Index (CPI), which rose by 0.7% in September 2023 according to FRED data.

As per ChemAnalyst, the global mLLDPE market is projected to maintain a sluggish pace by the conclusion of this year. This is mainly attributed to the expected decline in upstream Naphtha prices and the absence of robust demand from downstream industries. Additionally, the demand for mLLDPE in the US and European markets may be impacted by global economic circumstances and geopolitical tensions, potentially influencing consumer buying sentiment.

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