Category

Countries

mLLDPE Prices Surge in European and US Markets Amidst Supply Chain Disruptions
mLLDPE Prices Surge in European and US Markets Amidst Supply Chain Disruptions

mLLDPE Prices Surge in European and US Markets Amidst Supply Chain Disruptions

  • 16-Jan-2024 4:40 PM
  • Journalist: Bob Duffler

In the first half of January 2024, the Metallocene Linear Low-Density Polyethylene (mLLDPE) market witnessed a noteworthy surge in spot prices, impacting both European and US regions. In Europe, the unexpected uptick in mLLDPE costs was fueled by sellers announcing price increases amid a perceived market bottom, compounded by material shortages. Geopolitical tensions in the Middle East, causing shipping disruptions and reduced import cargo volumes, further influenced the market dynamics. Simultaneously, the US experienced a rebound in mLLDPE prices as market participants returned from the New Year holiday, with spot resin trading gradually gaining momentum. 

In the European market, mLLDPE spot prices saw a significant rise, defying initial expectations based on feedstock Ethylene which remained stable in this timeframe. The surge in mLLDPE price was initiated by regional sellers announcing price increases, signaling a departure from the previous downtrend. Market participants initially believed that the mLLDPE market had reached a bottom, but the ongoing announcements of price hikes, coupled with a shortage in material availability, provided a robust foundation for upward momentum. Despite subdued market conditions and weak material demand, sellers strategically lowered their offers to stimulate purchasing activity. This move aimed to counterbalance the prevailing tepid market environment. However, the escalation of tensions in the Middle East introduced an unexpected element into the market dynamics. Moreover, the disturbances in shipping activities within the Red Sea resulted in a surge in freight rates. This increase can be attributed to the rerouting of ships, redirecting them through the southern tip of South Africa via the Cape of Good Hope. Nevertheless, this alternative route presents several challenges, including a longer travel distance, extended transit times, increased fuel expenses, and potential disruptions associated with the prolonged journey. These factors introduce logistical and economic complexities for exporters grappling with the consequences of this altered shipping route.

Simultaneously, the United States, mLLDPE prices also experienced an upward trajectory during the same period. In the first week of January 2024, mLLDPE prices surged, marking a recovery from the mid-December lows. The return of market participants from the New Year holiday infused fresh momentum into the market, triggering an inclination in mLLDPE prices. Spot resin trading started at a slower pace during the initial week as many participants were still away for the holiday, leading to an anticipation of increased activity in the subsequent days. Despite the slow start, certain processors engaged in transactions to secure resin for their operations, resulting in a reasonable volume of business conducted in this period. The thin inventories held by traders contributed to an overall increase in average prices in the USA.

According to ChemAnalyst, the near-term outlook for mLLDPE prices is projected to be bullish, which can be attributed to the rise in freight rates and disruptions in the supply chain in both European and US regions. Further, the expected increase in the costs of feedstock Ethylene and upstream Naphtha may contribute to a further escalation in production costs, consequently driving an upward trajectory in mLLDPE prices.

Related News

Global mLLDPE Market Faces excess supply, Price Decline, Industry faces Challenges in April 2024
  • 24-Apr-2024 5:05 PM
  • Journalist: Yage Kwon
mLLDPE Prices Escalate in the US while Stability Prevails in China in February 2024
  • 20-Feb-2024 2:52 PM
  • Journalist: Bob Duffler
mLLDPE Price Declines Amid Weakening Demand and Lower Feedstock Costs
  • 15-Dec-2023 6:08 PM
  • Journalist: Francis Stokes
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