For the Quarter Ending March 2024
North America
In Q1 2024, the North American region experienced an overall positive pricing environment for Low-Density Polyethylene (LDPE). Several factors influenced market prices during this quarter. The demand for LDPE remained strong, particularly in downstream industries such as construction and packaging.
This robust demand, coupled with limited supply, exerted upward pressure on prices. Additionally, the cost of feedstock Ethylene and upstream Naphtha increased, further contributing to the price surge. Within the USA, the country with the most significant price changes, LDPE prices saw a consistent upward trend throughout the quarter. The price increased by 34% compared to the previous quarter in 2024. There was also a noticeable price difference between the first and second half of the quarter, with prices rising by 7% in the latter half.
Despite these price increases, the LDPE pricing environment remained stable and positive. The quarter ended with a price of USD 1266/MT of LDPE Film Grade FOB Texas in the USA, reflecting the continued upward trajectory. Overall, the Q1 2024 LDPE pricing in North America demonstrated a consistent and significant increase. The strong demand, limited supply, and rising feedstock costs all contributed to the upward price trend.
APAC
The first quarter of 2024 has seen an overall increase in prices for Low Density Polyethylene (LDPE) in the APAC region. Several factors have influenced market prices during this period. The overall trend for LDPE prices in Japan has been positive, with a 2% increase from the previous quarter. This is in line with the seasonal pattern, as LDPE prices tend to rise during the first quarter of the year. The correlation between LDPE prices in Japan and other countries in the APAC region has been strong, with similar price movements observed across the region. Compared to the same quarter last year, LDPE prices in the APAC region have decreased by 4%. However, there has been a significant improvement in prices compared to the previous quarter, with a 10% increase recorded. This indicates a positive price trend in the region. In terms of price changes within the quarter, LDPE prices in Japan remained stable, with a 2% increase from the first half to the second half of the quarter. The latest quarter-ending price for LDPE in Japan was USD 1098/MT FOB Tokyo. Overall, the pricing environment for LDPE in the APAC region during the first quarter of 2024 has been positive, with prices showing an increasing trend.
Europe
The Low-Density Polyethylene (LDPE) market in Europe during Q1 2024 has witnessed increasing prices, reflecting a positive pricing environment. Several factors have influenced market prices, including the supply-demand dynamics, economic conditions, and geopolitical tensions. Despite these challenges, the LDPE market in Europe has shown resilience. In the UK, LDPE prices experienced frequent fluctuations, with an overall upward trend. The price change from the previous quarter in 2024 was 7%, reflecting a continuing upward trajectory. Notably, there was an 8% price increase from the first half to the second half of the quarter. Overall, the LDPE market in the UK has demonstrated stability and a positive pricing trend. The quarter-ending price for LDPE Film Grade FD Surrey in the UK was USD 1325/MT, further indicating the increasing prices in the market. These price fluctuations can be attributed to various factors, including supply chain disruptions, geopolitical tensions, and fluctuations in feedstock prices. Despite these challenges, LDPE prices have remained resilient, reflecting the overall positive pricing environment in the European market. In conclusion, the LDPE market in Europe, has experienced increasing prices during Q1 2024. The overall trend has been positive, with significant price changes compared to the same quarter last year and the previous quarter.
MEA
In Q1 2024, the Low Density Polyethylene (LDPE) market in the Middle East and Africa (MEA) region experienced an overall positive pricing environment, with prices increasing steadily. Several factors influenced market prices during this quarter. Firm demand from downstream sectors, particularly packaging and construction, played a significant role in driving the price upward. Additionally, the availability of upstream Naphtha remained consistent, contributing to stable product prices. However, market dynamics were overshadowed by geopolitical tensions in the Red Sea, resulting in supply chain disruptions and increased freight rates, which added to the overall costs of LDPE. In Saudi Arabia, which saw the maximum price changes in the MEA region, LDPE prices remained relatively stable throughout the quarter. Demand from both domestic and overseas markets, such as Asia and Europe, remained steady. The availability of LDPE supply within the region was also consistent. Despite a drop in feedstock Ethylene and upstream Naphtha prices, LDPE prices remained unchanged due to firm demand. Overall, the LDPE market in the MEA region witnessed an 8% increase in prices compared to the previous quarter in 2024. However, when compared to the same quarter last year, prices remained unchanged. In terms of seasonality, prices in the second half of the quarter were 2% higher than in the first half. By the end of the quarter, LDPE Film Grade in Saudi Arabia was quoted at USD 1140/MT FOB Al Jubail. The pricing environment for LDPE in Q1 2024 in the MEA region was characterized by steady increases, driven by robust demand and geopolitical tensions impacting supply chain dynamics.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, LDPE prices in North America experienced volatility, with an initial surge in October followed by a depreciation in the LDPE market by the end of the quarter, resulting in a 4% decline in December for LDPE Film grade FOB Texas (USA).
The price increase in the first month of the quarter was driven by higher feedstock Ethylene prices and robust demand from downstream sectors such as construction, packaging, and automotive industries. However, during November and December, LDPE prices in North America followed a downward trajectory, influenced by decreasing upstream Naphtha and Crude oil prices and subdued global market demand. While domestic market demand remained steady, there was a reduction in export demand from Asian traders, though inquiries from Latin America and Europe persisted, although at lower levels.
In November, export offers began to emerge, prompting some producers to adjust their prices downward to align with the softer international sentiment, likely influenced by declining Crude Oil prices. Further, the market experienced supply disruptions due to low water levels in the Panama Canal, leading to restrictions on the number of ships crossing the Canal. Additionally, Plant shutdown was reported as Chevron Phillips Chemical shut its Ethylene unit for maintenance turnaround in mid-October. The plant is located in Port Arthur, Texas in the US, and has a plant capacity of 835,000mt/year.
APAC
The LDPE market in the APAC region exhibited varied trends throughout Q4 2023, primarily driven by fluctuating demand sentiments. Initially, LDPE prices surged in October 2023 in the Asian market as the prices in Japan increased by 1%, but the price trajectory declined by 2% in mid-quarter and stabilized by the end of the year. The market was influenced by international Crude oil prices and diminishing support for the product on the cost side. LDPE supply was moderate, while demand ranged from moderate to low, resulting in a subdued transaction atmosphere. The easing price of feedstock Ethylene contributed to a diminishing trend and alleviated cost pressures on the product. Moreover, the lackluster demand from the downstream construction and packaging industry in China, a major consumer, prompted market participants to adjust their prices in response to market dynamics. Conversely, the Indian market exhibited an opposite trend, inclining by the end of the year which was primarily driven by increased demand in the domestic market and elevated freight rates.
Europe
Throughout the fourth quarter of 2023, the price of LDPE in Europe followed a declining trend, primarily influenced by subdued demand from the domestic market, particularly from downstream packaging and construction industries. The construction sector in the Eurozone experienced an overall contraction, with notable declines in France and Germany, the latter witnessing its most significant output drop in over three and a half years. The housing sector remained the poorest-performing sub-sector for the fifteenth consecutive month in November, with new orders decreasing due to weak demand conditions, leading to job cuts and a negative outlook for future output. Input costs saw an accelerated increase, prompting construction companies to display signs of cost-cutting measures. Moreover, feedstock Ethylene prices remained dwindled as upstream Naphtha witnessed a decline amid weakening Crude oil prices. The conclusion of the peak oil season in Europe resulted in a demand reduction, further suppressing the Crude oil market. Collectively, these factors contributed to an 11% decline in LDPE Film grade FD Surrey (UK) prices at the conclusion of the quarter.
MEA
In the last quarter of 2023 in Middle Eastern nations, the LDPE market initially saw an uptick followed by a decreasing trend by the end of the quarter. The price surge in October was propelled by sustained demand from downstream sectors, particularly packaging and construction, which helped maintain prices despite a decline in feedstock Ethylene and upstream Naphtha prices. The Middle Eastern LDPE market exhibited a moderate scenario with a steady supply from both domestic and international sources. However, inflationary pressures influenced consumer sentiments, leading to a reduction in domestic market demand. As the quarter concluded, LDPE prices experienced a decline owing to the easing of feedstock Ethylene and Crude oil costs, resulting in reduced production expenses. Additionally, bearish demand sentiments from the Asian and European markets contributed to the downward shift in prices. Further, the attacks in the Red Sea in mid-December have impacted Saudi Arabian producers situated along the Red Sea's west coast as exports to Turkey, Europe, and North Africa have experienced disruptions. Sellers were worried due to subdued demand in most regions, and the year-end deceleration is discouraging a significant number of buyers. Beyond export challenges, Saudi producers were also grappling with concerns about the availability of empty containers due to ongoing issues. Logistical problems may lead to shipping line delays in back-haul routes to Saudi Arabia, resulting in a shortage of empty containers for local producers. Consequently, LDPE Film grade FOB Al Jubail in Saudi Arabia depreciated by 3% in December 2023.
South America
In Q4 2023, LDPE prices exhibited a mixed trend, with an initial increase in October followed by a 3% decline in the price of LDPE Film grade CFR Santos in Brazil by the end of the quarter. In October 2023, Brazilian LDPE prices elevated due to rising feedstock Ethylene costs and increased demand from downstream packaging and automotive industries, impacting material pricing. Traders secured LDPE for short-term needs and selectively replenished their inventories, while imported costs from the USA remained high. However, by the end of the quarter, the LDPE market observed a decrease in prices, primarily attributed to sluggish demand from downstream sectors in the region. The decline was further influenced by a drop in feedstock Ethylene costs, impacted by the pessimistic market situation during the same period. Further, upstream Naphtha costs decreased due to the weakening in Crude oil prices, alleviating cost pressures in LDPE production. The affordability of imported materials from the USA also contributed to overall lower costs in the domestic market. Moreover, as 2023 came to a close, Brazil's manufacturing industry continued to contract. Output and new orders experienced a decline for the third consecutive month, leading to a reduction in input buying as companies prioritized utilization over adding to inventories.
For the Quarter Ending September 2023
North America
LDPE prices in the third quarter exhibited a fluctuating pattern, primarily influenced by the movements in feedstock Ethylene prices and market dynamics in North America. Initially, during July, prices experienced a decline due to the impact of the decreasing feedstock price trend, driven by depreciating Naphtha prices. Further, the persistent inflation and higher interest rates negatively affected consumer purchasing behavior, consequently impacting inquiries from downstream packaging and construction sectors. However, as the quarter progressed, prices rebounded and eventually stabilized at USD 1289/MT Blowmolding grade CFR Veracruz (Mexico) by the end of Q3. This price upturn was primarily attributed to increased demand from the regional market. Furthermore, the escalating costs of feedstock Ethylene and rising Crude oil prices further fueled this price surge. Additionally, on September 14, 2023, Nova Chemicals had to declare a Force Majeure for HDPE and LDPE resins produced at their Ontario, Canada facilities. This decision resulted from an unexpected shutdown at their Corunna Cracker plant, which supplies Ethylene to the Moore and St. Clair sites.
APAC
In the Asia-Pacific region, the LDPE market exhibited varying trends during the third quarter, starting with an initial decline in prices but concluding in a substantial surge, reaching USD 992/MT Film grade FOB Jurong (Singapore) by September 2023. The price decline in July was primarily due to a combination of sluggish demand and ample supply of LDPE in the market. The economic slowdown led to lackluster demand from downstream sectors such as packaging, construction, and automotive industries. However, as August and September rolled in, LDPE prices began to rise. This uptick in prices was linked to the increased cost of its primary feedstock, Ethylene. The rising prices of upstream Naphtha and Crude oil drove this cost increase. One significant factor contributing to this price trend was the heightened demand for LDPE in the domestic markets of India and China, driven by the upcoming festival season and increased industrial activities. Additionally, stable inventory levels within the region created a bullish sentiment in the market, which suggests that the LDPE sector may continue to experience upward momentum in the near term.
Europe
Throughout Q3 of 2023, the European LDPE market remained in a bearish state, primarily due to weakened demand from downstream industries. The price of LDPE continued to decline, reaching USD 1342/MT Film FD Surrey (UK) by September 2023. The declining LDPE prices in Europe can be attributed to the persistently low prices of the feedstock Ethylene, which was a result of lackluster demand during the summer holidays in downstream industries. Several factors have contributed to this reduced demand, including reduced consumer spending, driven by the high cost of living and unfavorable macroeconomic conditions such as inflation and high-interest rates. Moreover, the decrease in infrastructure projects has further led to a decline in demand. Producers in the European LDPE market are cautious about future demand and do not anticipate significant improvements in the near term. Consequently, they are hesitant to accumulate excess inventory, leading to reduced plant production rates. Additionally, data released by Eurostat indicates that European industrial activities were on the decline, with Industrial Production output in the Euro Area remaining at -1.1% in August 2023 compared to the previous month. This aligns with similar market sentiments observed in September. On the other hand, Industrial Producers Prices saw an improvement to 0.6% in August, impacting the consumption of goods in September.
MEA
During the third quarter of 2023, the LDPE market displayed a mixed trend, influenced by varying purchasing sentiments from both the regional and overseas Asian markets. In July, LDPE prices in Saudi Arabia experienced a decline, primarily due to sluggish demand from downstream industries like packaging and construction. The falling prices of upstream Ethylene further contributed to the downward price trend. Inflation rates also weakened the confidence of domestic buyers, and demand for Saudi Arabia's LDPE in Asian countries, particularly India and China, remained low due to prevailing market conditions. However, in the last two months of the quarter, LDPE prices surged and reached USD 1043/MT Film grade FOB Al Jubail (Saudi Arabia) in September 2023. This price increase can be attributed to the rise in feedstock Ethylene prices, driven by the consistent increase in upstream Naphtha and Crude oil prices. Demand from downstream industries such as automotive and construction remained steady as inflation eased in August compared to the previous month, leading to healthier consumer buying sentiments. Additionally, the demand for Saudi Arabian LDPE from the Asian market was robust, further supporting the upward price trajectory of the product.
For the Quarter Ending June 2023
North America
The price of LDPE witnessed a bearish price trend in Q2 in North America. The decline was primarily due to lackluster demand from downstream industries along with ample availability of the product. Although the price of LDPE kept decreasing, feedstock Ethylene showed mixed sentiments as it increased by 13% in April but fell by 12% by the end of the quarter. Further, the primary reason for unhealthy buying conditions had been the slowdown in the economic conditions post the US banking crisis and persistent inflation with fluctuating market dynamics. The LDPE price fell by 3%, 4%, and 7% in the month of April, May, and June 2023, respectively. Furthermore, the plant shutdown of the feedstock Ethylene unit was reported as Chevron Philips Chemical, located in Cedar Bayou, Texas, USA, had unplanned shutdown on 14th June 2023. The plant has a capacity of 1.7235 million mt/year. However, any major impact of plant shutdown was not observed in the price of the product in the US.
APAC
During the second quarter, the price of LDPE declined continuously due to lackluster demand from the downstream packaging and construction industries. The upstream Ethylene and Crude oil decreased prices have further contributed to the slump in prices of LDPE. Furthermore, the reduced demand was seen on account of the economic downturn in the global market caused due to Russia- Ukraine war and weaker market growth in China post-lockdown restrictions. The decline of LDPE in Singapore was observed to be 7% in the last month of this quarter. LDPE plant shutdown was reported in China as PetroChina Lanzhou Petrochemicals, with a plant capacity of 200,000mt/year, was shut down for maintenance turnaround on 15th June 2023. Also, the feedstock Ethylene plant shutdown was in South Korea where Hanwha Total Energies Petrochemical, located in Daesan (South Korea) with a plant capacity of 1.55 million mt/year, was shut down for maintenance turnaround from the end of April to mid-June. Yeochun Naphtha Cracking Centre (YNCC), located in Yeosu (Soth Korea), shut down its Ethylene plant for maintenance turnaround from 24th April to early June.
Europe
Throughout the Q2 of this year, the LDPE prices witnessed fluctuations in the European region. The first two months saw a surge in prices while the prices declined by the end of the quarter. The feedstock Ethylene prices, however, have been weaker the entire quarter due to decreased demand in the global market. The demand for LDPE from downstream packaging, construction, and automotive industries was affected due to economic slowdown in the region and geopolitical tensions caused due to Russia-Ukraine war. The prices of Crude oil had also shown a weaker price trend affecting LDPE costs to decline by June. The price of LDPE in the United Kingdom (UK) increased by 5% and 2% in April and May, while a decrement of 1% was observed in June. The inflation rate in the Euro area, as per Eurostat, has been 7.0% in April, 6.1% in May, and estimated to be 5.5% in June with respect to the same month in the previous year. Although inflation rates were declining, the recession still affected the economy and market dynamics. The upstream Ethylene plant shutdown was reported in Germany. BASF plant was shut down for weeks on 9th June 2023 for two weeks for a maintenance turnaround. The plant is located in Ludwigshafen in, Germany, and has a plant capacity of 620,000 mt/year.
MEA
In the second quarter, the LDPE prices contracted in the Middle East Asian region due to market uncertainties. The major reason that caused a drop in LDPE price movement was the adequate availability of the stock amidst stagnancy in the production costs coupled with ease in the Crude oil prices. Further, the geopolitical uncertainties have placed pressure on the global demand for LDPE from downstream packaging and construction industries in Middle East countries. Furthermore, the upstream Ethylene prices have been observed to be declining throughout the second quarter. The prices of LDPE in Saudi Arabia fell by 11%, 4%, and 6% in April, May, and June. A similar declining trend was observed in feedstock Ethylene as it fell by 10% by the end of the quarter in June in Saudi Arabia. General Authority for Statistics (GASTAT) issued on its official website the results of the Industrial Production Index (IPI) for April 2023. The IPI increased by 3.2% in April 2023 in Saudi Arabia.
South America
In the second quarter of this year, Low-Density Polyethylene (LDPE) prices have decelerated in South America due to the sluggish demand from the downstream packaging and construction industries. The main cause of the unfavorable purchasing conditions could be attributed to the economic slowdown following the US banking crisis, along with ongoing inflation and volatile market dynamics. Further, the surplus supply of the product amid subdued demand had led to increased inventories, and sellers had to keep the prices low to finish their stock. The upstream Ethylene and Crude oil decreased prices over the quarter had also supported the sink in prices of LDPE. The price of LDPE Film grade CFR Santos in South America fell by 4%, 2%, and 7% in April, May, and June, respectively. As per Institute for Supply Management (ISM) data, the manufacturing PMI index has been declining, as 47.1 in April, 46.9 in May, and 46 in June, indicating contraction in the manufacturing sector in the US.
For the Quarter Ending March 2023
North America
A decline in spot demand caused LDPE prices to fall in the US during the first quarter, and LDPE trading activity increased. Other processors may have just purchased the material as part of their routine business operations, while the more widespread purchasing may have been caused by late railcars that required immediate feedstock resin availability. Downstream LLDPE prices in the American market have continued the downward pattern because there have not been any notable changes in the local demand that have an effect on the final pricing. The Polyethylene scenario in the US market remained silent throughout the quarter. Offers for LDPE were there in the market but were met with uninterested buyers. The price of LDPE in the US was recorded at around USD 1388/MT.
APAC
Low demand for LDPE cargoes in the Asian nations that import it is a major element in the dip in the price range of LDPE, which led to a decrease in the material's price this quarter. The cost was estimated to be USD 1140/MT LDPE Film Grade CFR Busan in South Korea. The steady decline in upstream ethylene cost contributed to the falling price trend of LDPE in the South Korean market. LDPE prices decreased in the Asian market this week despite strong downstream buying activity. The main cause of the South-Eastern LDPE price trend's downward movement is the high exporting nations' supply rates as a result of the markets' dropping price trends. The demand for Polyethylene after the spring festival was not as high as anticipated, which is seen in the prices of LDPE in China during the latter weeks of February. LDPE prices in China were constant during this quarter. The restart of an upstream Ethylene plant in the Chinese market contributed to the consistent LDPE price trend.
Europe
Throughout this quarter, LDPE prices have been steadily falling on the European market as upstream Ethylene prices have come down as a result of the extremely low natural gas prices. The producers of LDPE did not wish to reduce the prices of LDPE in spite of the dropping costs and weakening demand in the European region, which led to a constant price trend for LDPE in Germany. As people started making purchases to meet summertime demands, LDPE prices rose in the UK. Additionally, as energy prices rose and demand from downstream industries in the European region increased throughout the summer, this was also true in the English market. Furthermore, The price of LDPE in the UK climbed during the last week of March despite declining ethylene costs throughout Europe due to increased demand from the downstream packaging sectors. Therefore, the price of LDPE hovered at USD1640/MT in the English market as of March 31, when LDPE prices climbed by 1.8%.
For the Quarter Ending December 2022
North America
LDPE prices during the Fourth quarter of 2022 in the USA witnessed a declining price trend throughout the quarter, which is very similar to the decreasing price trend of LDPE in the USA during Q3 2022. In comparison to Q3 2022, the monthly rate of price fall for LDPE in the USA was higher in Q4 2022, while the trend followed the same downward trajectory during both quarters. The fluctuating upstream Ethylene price was not able to alter the declining price trend of US LDPE during Q4 2022. Poor demand from the downstream sector further led to the decline of LDPE prices in the US.
APAC
The prices of LDPE in the Asian markets kept on falling throughout the fourth quarter of 2022. Despite multiple troughs and crests in the upstream Ethylene prices in the Asian markets during mid-Q4, the prices of LDPE declined effectively. The largest exporter of LDPE to Asian markets (Saudi Arabia) witnessed two huge manufacturing units undergo a production cut caused by maintenance activities but did not have a notable impact on Asian LDPE prices due to the poor performance of the downstream piping and packaging industries in Asia. China is the major importer of LDPE manufactured in Asia, so the weak economic condition in the country brought down the Asian LDPE prices during Q4 2022.
Europe
The prices of LDPE in the European region witnessed a slight decline during the first two months of Q4 2022. The poor demand from the downstream piping sector in the domestic markets was the key reason behind the declining price trend of LDPE. However, the prices during the last month of Q4 2022 rose as the inventories in the European region started declining, and the high input costs like Energy and transportation started to catch up with the manufacturers and forced them to increase the prices despite the poor demand scenario for LDPE in Europe. A decline in Saudi exports further contributed to the price hike during the end of Q4 2022.
For the Quarter Ending September 2022
North America
LDPE prices have been steadily declining in the US throughout the third quarter of 2022. As a result of a downturn in demand from the packaging and film sectors in Q3 2022, LDPE prices on the American market have decreased. Additionally, the price of Low-Density Polyethylene (LDPE) decreased along with the market price of the feedstock ethylene, which also decreased the upstream expenses associated with the manufacture of LDPE. The price of LDPE was around USD 1749/MT LDPE Film Grade FOB Texas at the beginning of Q3 2022 in the US.
APAC
At the beginning of Q3 2022, LDPE prices fell in the domestic Chinese market as demand from end-user declined. Manufacturers were compelled to lower prices since there was a high supply of items and little demand for them on the local market. Early in the third quarter of 2022, the price decline of LDPE was aided by low feedstock ethylene costs. LDPE prices increased in China during the final month of the third quarter of 2022 as a result of increased interest in purchasing polyethylene (PE). The third quarter of 2022 saw a similar trend to that of China in other significant Asian markets. At the conclusion of the third quarter, the price of LDPE in Japan was around USD 1475/MT LDPE FOB Tokyo.
Europe
During the third quarter of 2022, LDPE supplies were abundant while demand from various end-use sectors persisted underwhelming. Due to increased economic uncertainties and pressure on consumer purchasing power, demand was lower than during the typical summer holiday season. Although there was enough material to meet the modest demand, manufacturing restrictions and maintenance also limited supplies in the European market. Additionally, imports from Asia and the Middle East increased, which lowered LDPE's price in Europe. LDPE was priced in Germany at about USD 2060/MT at the beginning of the third quarter of 2022.
For the Quarter Ending June 2022
North America
Low-Density Polyethylene (LDPE) prices gradually rose in the US market during the second quarter of 2022. The price hike during April can be primarily traced to the rising price trend of upstream monomer Ethylene. In the US market, the natural gas prices rose throughout April, abetting LDPE's price hike during the same period. The prices of LDPE eased a bit while nearing the end of Q2 2022. The easing of prices of LDPE was mainly due to the decreasing price of feedstock naphtha caused by poor gasoline blending rates and weak market sentiments for upstream Ethylene monomer in the American market.
APAC
Low-Density Polyethylene (LDPE) prices surged during the start of the second quarter in the Indian market, and soaring crude oil prices forced the domestic producers of LDPE to increase the cost of the commodity. The cost of LDPE steadily dropped throughout the second quarter of 2022 due to the arrival of the off-season leading to weak demand from the plastic manufacturing sector. In the Chinese market, the prices of LDPE dropped steadily throughout the entire Q2 2022, owing to the poor demand from the downstream industries caused by the strict restriction in the domestic market to curb the resurgence of Covid-19 cases. The limited export rates also raised the availability of the commodity in the domestic market, abetting the decreasing price trend of LDPE in China.
Europe
In the European market, the prices of LDPE were hiked at the start of the second quarter of 2022 because of the rising cost of upstream crude oil owing to the ongoing war between Russia and Ukraine. The sanctions by several European countries against the imports of Russian oil and gas increased the cost of upstream natural gas. They raised the price of upstream products like Ethylene monomer in the domestic market, assisting the increasing price trend of LDPE in Europe. Soaring natural gas prices rose the energy prices in Europe. High energy prices drove up the operation cost of LDPE, contributing to price hikes throughout Q2 2022.
For the Quarter Ending March 2022
North America
Spot LDPE film trade volumes in the first quarter of 2022 improved significantly as compared to the last quarter of 2021. The first half of January saw demand struggle to take off owing to the pandemic disrupting market signals in both the domestic and overseas (Northeast Asia) markets. Demand however rose and spot volumes improved by the tail end of January. Feedstock ethylene prices were relatively soft compared to the other regions in the months of February and March as Ethane prices were lower on the back of moderate natural gas price rise compared to the naphtha cracking regions such as Europe and Asia Pacific and the middle east which had to bear the brunt of exceedingly high crude oil prices.
Asia Pacific
LDPE market in the Asia Pacific remained bullish during the quarter ending March as prices of the resin were heading for record highs by the mid-March period in all the major markets including China and India. Feedstock ethylene monomer prices in the Northeast Asian region increased by 3.2% during the period 25th February 22 to 17th March 22 and the corresponding increase in the Southeast Asian region was 5.6%. Most naphtha crackers in the East Asian region cut down production due to higher cost pressure from the feedstock market.
Major Indian manufacturers including Reliance Industries Limited, ONGC Petro additions Limited and the Haldia Petrochemicals had consistently revised their offers upwards between the period 19th January 22 to 10th March 22.
Europe
European LDPE film market witnessed severe supply side crunch through out the quarter ending March 2022. Supply tightness in the natural gas market led to higher utility costs for both upstream naphtha crackers as well as manufacturers of the resin. The prices of Ethylene monomer assessed on an FD Northwest Europe basis have seen a rise of 32% during the period 25th February to 16th March prompting refiners to cut down production rates. LyondellBasell, INEOS and ExxonMobil were see being more aggressive in pricing their offers especially for the month of March which saw an average price push of USD 0.08/lb to USD 0.1/lb on an average.
For the Quarter Ending December 2021
North America
As a result of supply tightness faced during the period post deep freeze in USA, exports had been diverted form Northeast Asia to Europe and the domestic market as a conscious decision to maintain stability in the market. However, production had recovered by the start or mid-October flooding the domestic market with a surplus. Although traders were helped by the continuously rising freight charges which weakened the arbitrage margins for imports from overseas, the slump in demand ahead of the Christmas season in North America and Europe forced most traders to sell their stocks at significant discounts. Demand from the packaging Industry gave the markets some breathing room but the return of strict lock downs and quarantine protocols in China and Northeast Asia had led to ExxonMobil, Dow, LyondellBasell etc., to revise their prices downward drastically to the tail end of December FY21 owing to a lack of demand from overseas.
The outlook for Q1 of FY22 remains highly unpredictable due to the pandemic disrupting logistic networks once again. Although the affect on polymers market may not be as severe as during the Q1 of 2020 period but demand fundamentals could certainly be weakened as result of the ongoing crisis. Demand is expected to pick up during the early to mid-February when markets, especially those in Asia become more pandemic ready.
Asia
The Asian LDPE market witnessed an opposite of the trend from North America as prices of LDPE on an average increased in Q4 from the Q3 levels as prices of film grade LDPE in China increased by almost 10%. Supply side tightness persisted during Q4 as freight costs from Europe, U.S.A and the Middle East to East Asia during the October to November period were at record levels. China was also crippled by an energy crisis since October owing to coal shortage which forced the government to cause an intervention and ration the coal supplies to distribution companies. However, this intervention could not lead to any long-term gains as the month of December saw the country hit by the new wave of pandemic disrupting domestic production as well as imports from overseas due to clogging at the container terminals.
India too saw a significant rise in the average prices of LDPE compared to the Q3 levels. A significant increase of 15% was observed during Q4 assessments for the LDPE adhesive film grade. India too was hit by shortages in coal reserve during the same period pushing up the energy costs. Although RIL, Opal and GAIL had started revising prices downward during the month December, the price cut did not affect the overall sentiment for Q4 as Demand had outmatched supply over the entire quarter.
The Outlook for Q1 of FY22 remains mixed with the new wave of pandemic likely to affect production rates across Asia. As a result, prices could see an uptrend by the mid-January to early February period.
Europe
European LDPE market too like the US market saw a marginal depreciation in the prices of LDPE during Q4 of FY21 compared to the Q3 levels. The average prices of LDPE film grade were on an average 2.3% lower over Q4 compared to Q3 assessed on an FD Hamburg basis. Demand declined since the closing week of November FY21 as the holiday season saw most companies including INEOS and LyondellBasell revise their prices downward. Natural gas market’s anomalous trend this time around had a direct impact on the production levels as price was on a downtrend for majority of Q4 and only started reversing by the second week of December. This had led to the exporting countries like the Netherlands and Belgium continue with the same production levels. The new wave of pandemic however impacted their export base as East Asia went back to lock down mode during the closing weeks of Q4 further reducing the prices of LDPE.
The Outlook for Q1 of FY22 remains uncertain as the new wave of pandemic disrupts market signals and global logistic networks making it difficult for market players to assess actual demand. A lot, however, depends on the severity of the winter in Europe and US as production levels come down during the peak winter season owing to increased energy demand and in turn the energy costs.
For the Quarter Ending September 2021
North America
During the third quarter of 2021, polymer availability improved significantly in the domestic market which resulted in a marginal decline in the prices of LDPE in North America. The demand from downstream sectors stayed healthy in Q3 as market participants pointed out that consumption for the product has turned stronger. The change in consumer behaviour was observed by the manufacturing sector after considerable ease in restrictions was seen across the US. In terms of demand, the construction sector along with the packaging sector had been intaking healthy volumes throughout the quarter. The supply of LDPE improved in the last few weeks of the 3rd quarter as operating rates from the manufacturers measured robust increase. The price of LDPE Film Grade was last assessed at USD 1850/MT FOB Texas.
Asia
The domestic LDPE market price experienced an uptrend in the Asia Pacific region in Q3 2021. The pricing trend witnessed another uptick w.e.f. 24th August buoyed by the consistent rise in the consumer demand amidst constrained regional supply. Shutdown by two polymer producers based in Malaysia during the quarter also levied stress over the regional supply fundamentals in the domestic market. A trader revealed that an increase in the delta variant cases disrupted the supply chain with various countries in Q3 and has thus made prices volatile. In India, the demand for LDPE remained bullish throughout the quarter as prices escalated from USD 1090/MT to USD 1206/MT during the quarter.
Europe
The European market of LDPE showcased mixed sentiments in the third quarter. Production was improved in Q3 due to the maintenance of the several plants. The prices of PE hit all-time high earlier in 2021 due to the extreme weather conditions in the US Gulf which took out large amounts of ethylene and PE capacity tending to reduce the supply as well as demand. Prices across Europe degraded due to the abrupt market situation and were lastly settled at USD 2055 per metric tonne in September.
For Quarter Ending June 2021
North America
Recovery from pandemic revived market sentiments for North American resin manufacturers during this quarter. Demand remained strong enough to the prices, while filling the old enquiries. Major manufacturers like ExxonMobil, Equistar, and Chevron Phillips increased their LDPE prices by USD 110/MT during May, to improve margins under high demand and rising upstream and production cost. Therefore, an effective rise in prices of LDPE was observed during Q2 2021, which revolved around USD 1955/MT for film grade in USA during in end of June 2021.
Asia
Lacklustre demand of LDPE amidst stable supply led to dull market sentiments across APAC region during this quarter. Major players of China revealed that they had ample stock availability during this quarter, while they struggled to get proper queries, leading to a fall in prices. Meanwhile Indian manufacturers witnessed fair demand for most of the resins including LDPE initially during April. Later, due to sudden surge in pandemic cases and implementation of movement restrictions, overall demand for LDPE from packaging sector fell. Therefore, demand remained bearish throughout the quarter in India amid ample inventory level, and prices slipped from USD 1808/MT to USD 1534/MT for adhesive film grade during April-June timeframe in India.
Europe
Europe faced huge supply crunch for several polymer resins during the first half of the quarter, that led it to a sharp spike in price of LDPE across the region. This supply crunch was supported by lower import activities from USA and Asia due to several reasons. Low availability was the result of prolonged plant outages across Europe and the Gulf coast of USA during the previous quarter, along with container shortages across Europe-Asia trade route. In addition, soaring resin prices concerned several MSME businesses of Europe, who were already battling with the losses.
For the Quarter Ending March 2021
North America
The North American market experienced high demand for LDPE from the local as well as international market during Q1 2021. The production levels were totally disrupted due to winter storm which also created shortage of the feedstock Ethylene. Shortage of feedstock Ethylene forced several plants to shut their production and raise the regional offers. Formosa Plastics USA shut its LDPE plant due to the shortage of Ethylene during January although they resumed the activity soon after a week. The production capacity of this plant is 400,000 MT per year. These shortages and unplanned shutdowns accelerated the prices of LDPE 2 years high during this period. LDPE Film Grade FOB Texas price surged above USD 1800 per MT in March. Freezing cold snaps slumped manufacturing activities in Louisiana and Texas which is the base for many industries that turn oil to polyethylene. With more than 75 percent of Ethylene production affected by the storm, prices of almost all Polyethylene products were raised by double digits between mid-Feb and March.
Asia
In the Asian market, demand for LDPE remained weak to moderate and also the availability remained low due to lesser imports. Prices of LDPE fluctuated continuously throughout the quarter, due to unsteadiness in the demand-supply situation. In India, the average prices of LDPE film grade rested at USD 1608 per MT in February. Chinese Lunar holidays reduced the demand for days, as the manufacturers shut their operations during this period. In addition, during the end of march several plants in China went for maintenance shutdown, including Sinopec Moaming with capacity of 250,000 MT per year and Sinopec Yanshan with capacity of 380,000 MT per year.
Europe
In Europe, LDPE demand remained moderately positive, and prices remained consistently high due to lower imports and insufficient production. Imports from the US were negligible due to severe winter storm which disrupted the production activity across the region. Lower imports and higher domestic and international demand led the prices to rise steeply. In addition, Sumitomo has licenced out high pressure LDPE & EVA production process to Russian producer to establish a new LDPE & EVA production plant in Kazan.
For the Quarter Ending September 2020
North America
A number of unprecedented turnarounds and force majeures along the US Gulf Coast as a ripple effect of Hurricane Laura led to shortage of LDPE supply in times of its surging demand. Export potential of the region was also curtailed by limited availability of the material. The demand outlook remained healthy with prominent recovery expected in the electronics sector followed by continuous increment in packaging demand as people are keener towards home take away of food as an effect of changing lifestyle after the coronavirus.
Asia
The Asian LDPE sentiments improved appreciably in the third quarter on the back of strong demand from the downstream sectors as buyers who previously stopped purchasing cargoes on demand disruptions caused by coronavirus paved their way back into the market. As the consumption of packaging and pipe demand increased with seasonal peak in September and October, fundamentals of LDPE traced further recovery with revenues surpassing pre-lockdown levels. However, several turnarounds in North Asia and Middle East kept the market under pressure from the supply side.
Middle East
Beginning of the third quarter in the Middle East was pressured by tightened LDPE supply due to prolonged maintenance outages by some of the leading producers in the region. Demand from food packaging and hygiene applications remained robust with increasing consumption for single use packaging items and disposable plastic sheets. Export revenues also witnessed substantial gains by the end of September, as restriction concerning the travel and trade were lifted across several countries.
