US LDPE Film Prices Decline 4.37% in Late August After Strong Monthly Gains

Feedstock ethylene prices increased 3.9% during August amid higher crude oil costs linked to intensifying Middle East tensions. WTI crude prices in the US rose 6.4% during the month, increasing production-cost pressure across the LDPE chain. Concerns over attacks on energy infrastructure and maritime transport added uncertainty, while expectations that the crisis could extend into 2027 kept energy markets supported.

The July attack on the Jizan Refinery, located near the Yemen border and capable of processing approximately 400,000 barrels per day, reduced oil shipments. No refinery exports were reported during August, reinforcing concerns about regional supply disruptions and keeping upstream cost expectations elevated.

Demand for US LDPE remained steady across packaging and film applications, while consumer-durable markets provided modest additional support. US economic activity increased and consumer spending grew slightly overall, offering some support to end-user markets. However, late-August LDPE buyers became more selective, limiting purchases to immediate requirements and reducing the urgency created by earlier replenishment activity.

Supply conditions improved toward month-end. Abundant favourable natural-gas economics supported LDPE production margins, limiting producers’ ability to sustain elevated offers. Planned maintenance at LyondellBasell’s La Porte facility during August temporarily constrained supply, while additional capacity elsewhere helped offset the reduction.

Inventory conditions also contributed to the late-month correction. Comfortable LDPE availability across regional distribution channels allowed buyers to postpone replenishment and encouraged sellers to compete for spot business. The resulting improvement in supply flexibility reduced the upward pressure that had characterized the middle of August.

Looking ahead, LDPE prices are likely to receive support from stronger packaging procurement as manufacturers prepare for increased Q4 consumption and holiday-related demand. Higher ethylene costs may also underpin replacement values, although ample ethane availability and favourable natural-gas economics could limit substantial gains.

Pre-holiday procurement of LDPE may increase further in coming weeks, while potential congestion at Asian ports could raise landed costs for imported material and support regional pricing. However, improving LDPE capacity and comfortable inventories may cap the recovery unless downstream buying strengthens materially. Market participants are therefore expected to monitor feedstock movements, inventory levels and seasonal procurement closely.