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US LDPE Price Rises in March Amidst Active Trading and Global Demand Boost
US LDPE Price Rises in March Amidst Active Trading and Global Demand Boost

US LDPE Price Rises in March Amidst Active Trading and Global Demand Boost

  • 21-Mar-2024 4:02 PM
  • Journalist: Bob Duffler

In the initial half of March 2024, there was an increase of 2% in the prices of Low-Density Polyethylene (LDPE) in the USA. This surge in LDPE prices is attributed to active trading activities and various factors such as heightened demand from both domestic and international markets, rising costs of raw materials, and positive business sentiment. Despite global challenges, the LDPE industry in the USA remains resilient, indicating a promising future outlook, especially with increased demand from sectors like construction, automotive, and packaging.

The surge in LDPE prices was primarily fueled by healthy trading activities as the railcar transactions were rapidly completed by mid of this period, with higher asking prices replacing initial offers as March began. While LDPE availability domestically remained moderate, producers redirected more supplies toward the export market, prompting buyers to take proactive measures in resin procurement. Demand from South America, particularly Mexico, remained strong as local traders sought dependable supply from North America amidst shipping delays and rising costs from Middle Eastern and Asian regions. In response to the market rally, resellers depleted their inventories across various grades, including LDPE, while exercising caution in restocking amid uncertain market conditions. Some resins including LDPE experienced tight availability, indicating constrained supplies. Additionally, the increasing cost of feedstock Ethylene, driven by surging prices of upstream Naphtha and Crude oil in the USA, further propelled the upward price trend of LDPE. Despite moderate supply levels and consistent operational rates, trader inventories remained relatively thin, leading to an uptick in average LDPE costs for the first half of the month.

In light of these market dynamics, there has been a noticeable decline in global ocean freight rates following a significant surge in January, which has somewhat alleviated concerns amid the ongoing Red Sea crisis. Carriers appear to have adjusted to this new reality, as evidenced by the Panama Canal Authority's announcement of increased daily slots, which has further helped to ease worries. This improvement has been complemented by a renewed uptick in output, adding to the positive outlook for the industry.

Furthermore, manufacturing activities in February 2024 showed an increase in production levels, as previous supply chain delays eased and demand conditions strengthened once more. The upsurge in construction activities and favorable business sentiment has driven overall economic activity in the US, with companies reporting strong growth in new orders for goods and services, fostering optimism and confidence in future business prospects. This growth in February continued to have an impact in the initial half of March, as the construction industry remained robust, leading to an increase in LDPE demand.

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