mLLDPE Prices Drift Downwards in Europe and Asia Amidst Falling Feedstock Costs
 mLLDPE Prices Drift Downwards in Europe and Asia Amidst Falling Feedstock Costs

mLLDPE Prices Drift Downwards in Europe and Asia Amidst Falling Feedstock Costs

  • 12-Jul-2023 4:56 PM
  • Journalist: Patrick Knight

Metallocene Linear Low-Density Polyethylene (mLLDPE) prices experienced a decline in its performance during June in Europe. The pricing of mLLDPE in European countries is being impacted by the persistent low demand and abundant supply of the product. The economic condition has slowed the market dynamics due to raised inflation. Further, the availability of competitively priced imported shipments from overseas suppliers has caused domestic sellers to keep the prices low in order to attract consumers. Furthermore, the upstream Ethylene and Crude oil declining prices have impacted the price of mLLDPE in Europe and Asian countries.

The European mLLDPE market witnessed a decline of 3% in June, while the upstream Ethylene declined by around 13%. The Crude Oil prices also followed a downward trajectory, which impacted the mLLDPE prices. The Asian market, particularly India and China, has also shown sluggish demand for mLLDPE this month; consequently, prices have decreased. In China, mLLDPE FOB Shanghai price fell by 4%, while upstream Ethylene CFR Shanghai saw a decline of 11% in June. mLLDPE price in India witnessed a downturn of 9%, with upstream Ethylene price to fall by 10% this month.

The decline in the price of mLLDPE was majorly due to a slowdown in the global economy. As European nations fall into recession, the market dynamics have slowed as consumers are hesitant to make bulk purchases and have opted for need-based purchases. The annual inflation rate in the Euro area fell to 5.5% in June 2023 from 6.1% in May 2023, as per Eurostat data. Although the inflation rate has reduced from an all-time hike, still the rates are high. Some plants operate at low production rates as the end-user demand has been reduced amid weak economic conditions and inflation. The Asian market was also impacted due to the global economic slowdown and the weaker buying sentiments from the downstream packaging and construction industries.

Plant shutdown for upstream Ethylene was reported in Germany. On June 9th, 2023, the BASF Ethylene plant began a two-week maintenance turnaround, temporarily ceasing operations. The plant is located in Ludwigshafen (Germany) and has a capacity of 620,000 mt/year.

Another plant shutdown was reported in China as the PetroChina Lanzhou plant shut the cracker in Mid-June for a maintenance turnaround. The Ethylene plant has a capacity of 240,000 mt/year and is located in Gansu, China. Also, the Zhenjiang Xingxing New Energy Ethylene plant was shut down in Mid-June for a maintenance turnaround. The plant is located in Zhejiang in, China, with a plant capacity of 300,000 mt/year.

As per the ChemAnalyst database, the mLLDPE prices are expected to decline further in July in Europe, considering the lackluster demand from downstream industries due to the recession and ample availability of the product in the market may keep the prices down. A similar downward trend is anticipated in China as the demand is sluggish due to weaker market sentiments in China.

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