mLLDPE Price Declines Amid Weakening Demand and Lower Feedstock Costs
mLLDPE Price Declines Amid Weakening Demand and Lower Feedstock Costs

mLLDPE Price Declines Amid Weakening Demand and Lower Feedstock Costs

  • 15-Dec-2023 6:08 PM
  • Journalist: Francis Stokes

In the initial half of December 2023, the Metallocene Linear Low-Density Polyethylene (mLLDPE) market experienced a negative trend in both the United States and Europe. This was mainly driven by a reduction in the costs of feedstock and an excess supply of mLLDPE in the regional market. The decreased demand from sectors like packaging and construction played a role in pushing prices downward during this timeframe. Additionally, the global market saw a decrease in Crude oil prices, easing cost pressures on mLLDPE production. Economic challenges in Europe amid inflationary pressure, further complicated market dynamics as consumer purchasing sentiments were adversely impacted.

The price of mLLDPE experienced a declining trend throughout this time frame in Europe, primarily driven by subdued demand from the domestic market for the product from the downstream packaging and construction industries. The mLLDPE inquiries reduced from the construction sector in the Eurozone sustained an overall decline, primarily driven by contractions in France and Germany, with the latter witnessing its most significant output drop in over three and a half years. Further, the feedstock Ethylene prices remained stable, nevertheless, upstream Naphtha witnessed a decline amid easing Crude oil prices. In Europe, the peak oil season has concluded, leading to a reduction in demand and consequently suppressing the Crude oil market.

In the USA, the mLLDPE market also showed a bearish price trend as the prices remained stable for the first week and then fell in the second week of December 2023.  The feedstock Ethylene depreciated in the regional market amid declining Crude oil prices which led to easing mLLDPE prices. Further, initially, the USA mLLDPE witnessed healthy market activity, characterized by the usual continuous customer order flow. On the other side, some purchasers remained resolute in minimizing their buying activities towards the year-end, optimistic that December deals might extend into January. Furthermore, the export demand for mLLDPE exhibited stability in Asia and Latin America. On the supply side, the mLLDPE market experienced active trading, with buy orders flowing in amid ample commodity supplies. Sellers were willing to give reasonable offers, leading to lower prices in exchange for larger volumes, which overall led to a price drop in the USA. Moreover, the energy sector sustained a decline, with Crude Oil registering its loss, reaching a level unseen in nearly six months which can be attributed to abundant supplies and underwhelming demand.

As per ChemAnalyst, the mLLDPE market may remain pessimistic by the end of this year in the global market, particularly in the US and Europe, however, the market may rebound in January 2024. However the demand for mLLDPE may increase, though, at a slower pace, the challenging global economy may impact consumer sentiments. Further, the prices of feedstock Ethylene and upstream Crude oil are expected to influence the price trend for the product in the coming months.

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