For the Quarter Ending September 2023
North America
In the United States market for Recycled Linear Low-Density Polyethylene (R-LLDPE), a noticeable declining trend was observed throughout the entire third quarter of 2023. At the beginning of Q3, the United States R-LLDPE market faced uncertainty with lower demand projections from key sectors like Packaging and Textiles, leading to fluctuating demand patterns. Domestic pricing for (R-LLDPE) assessed a declining price trajectory during the quarter. The downstream sector, including Packaging and plastics industries, exhibited wavering demand patterns, contributing to cautious market sentiments. The consistent production rate of material led to oversupply inventories, as demand fell short of expectations from the downstream industries. Enterprises didn't show much interest in bulk purchasing. Market participants preferred procuring their stocks on an immediate basis. Furthermore, during this period, the absence of notable changes in factors affecting final prices led to continued price decreases in the United States market. Demand for R-LLDPE from the domestic market remained subdued. This trend was in line with the market dynamics and conditions observed over the previous month. As the last month of Q3 approached, the prices of R-LLDPE in the United States market continued to decrease, in keeping with the market dynamics and conditions observed over the previous month. The market faced lower demand from downstream industries, notably the Packaging and Textiles sectors, and remained cautious due to ongoing uncertainties.
APAC
In the Chinese market, Recycled Linear Low-Density Polyethylene (R-LLDPE) experienced a noticeable declining trend, with a decrease of approximately 8.2% throughout the third quarter of 2023. At the beginning of Q3, the Chinese R-LLDPE market faced uncertainty with lower demand projections from key sectors like Packaging and Textiles, resulting in fluctuating demand patterns. Moving forward in the Q3, the domestically traded price of Linear Low-Density Polyethylene (R-LLDPE) continued to follow a declining price trajectory. The downstream sectors, including Packaging and plastic industries, exhibited a wavering demand pattern, leading to cautious market sentiments. Additionally, the consistent production rate of material led to oversupply inventories, as demand fell below expectations from the downstream industries. Enterprises didn't show any interest in bulk purchasing, and market participants were more inclined to procure their stocks on an immediate basis. While demand from the automotive sector was moderate, it was not sufficient to hold the market at a steady position. In the last month of Q3, due to the absence of notable changes in the factors affecting final prices, the prices of R-LLDPE in the Chinese market continued to decrease in line with the market dynamics and conditions observed over the previous month.
Europe
In the European market for Recycled Linear Low-Density Polyethylene (R-LLDPE), the third quarter of 2023 witnessed a noticeable declining trend, with a decrement of approximately 9.6% throughout the entire period. At the beginning of Q3, the market encountered several challenges, resulting in a consistent decline. The market faced extended weakness in buyer appetite in both domestic and international markets. Sluggish end-user consumption in key industries such as film production and the packaging sector prompted market participants to maintain weaker prices to remain competitive and economically viable. In August, there was a rise in post-consumer product collection rates, which increased the availability of base material. However, weak consumption rates from key downstream sectors posed difficulties for recyclers. Transactions remained challenging, with low purchasing activities and feeble competitive bidding offers contributing to margin compression. As the last month of Q3 approached, the R-LLDPE segment was influenced by the region's weak Purchasing Managers' Index (PMI), which had cascading effects on market dynamics. Reduced manufacturing activities and industrial output led to a decline in demand for R-LLDPE from sectors such as packaging and construction. Additionally, the R-LLDPE market faced challenges due to the weaker price support of virgin LLDPE materials and the increasing collection rates of post-consumer products. These dynamics made it challenging for recyclers to regain market growth.
MEA
In Saudi Arabia, the Recycled Linear Low-Density Polyethylene (R-LLDPE) market experienced a mixed trend during the third quarter of 2023. The price of R-LLDPE experienced a minimal decrease of approximately 1.1% during the entire Q3. At the beginning of the quarter, the market faced consistent challenges due to sluggish demand from downstream sectors like textiles and packaging. While the automotive sector exhibited robust global demand, it wasn't sufficient to alter the prevailing market trend. Moving to the second month of Q3, the balance between supply and demand kept the market for R-LLDPE stable throughout this period. The market remained well-saturated with stable pricing, which muted further product trades in the region. Although post-consumer product collection rates improved and costs for virgin LLDPE decreased, the increasing base material availability affected production costs. However, sluggish demand from key industries like packaging and film production posed challenges for recyclers in maintaining their profit margins. As the last month of Q3 approached, the R-LLDPE market demonstrated a notable upward trend. The market's resilience was further underpinned by consistent demand from crucial sectors like Electrical & Electronics and consumer goods manufacturing industries, acting as bullish forces. However, the subdued demand in the packaging sector contributed to only a slight increment in the price.
For the Quarter Ending June 2023
North America
Based on recently disclosed trade data, there was a noticeable drop in the price of R-LLDPE in the North American market during the second quarter of 2023. This decrease in pricing coincided with an upswing in inventory levels, which has been linked to a decline in the consumption rate of the product within the region. Moreover, the production of feedstock ethylene and the yield of 1-butene, 1-hexene, and 1-octene were negatively affected by the enhanced utilization of the product by downstream plastic manufacturers operating in the area. These alterations have resulted in reduced demand for the polymer and resin sector, as corroborated by publicly available market research. Market participants have expressed concerns about this development and its implications for future trading activities, as reported by industry sources. The spot market continued to observe a slower pace. Despite the lower spot price offers, petitions from the enterprises remained low. Additionally, the manufacturers were seen under pressure with a declining demand situation and were found to claim a lower consumption rate of R-LLDPE from the associated downstream businesses.
APAC
In the second quarter of 2023, the market price of R-LLDPE experienced a notable decrease in the Asian market, dropping to USD 943/ton Extrusion Grade FOB Tianjin in the Chinese market during April. Uncertainty persists regarding market sentiment among buyers within the downstream Packaging and plastics sectors, leading to diminished consumption rates from primary users contributing to surplus stockpiles in the region. Imports between China and India were adversely affected by waning buyer interest over the preceding months, while supply patterns remained unchanged between other Asian nations and the Indian market. Nonetheless, suppliers continue to address queries about their available stocks. The market price of Recycled-Linear Low-Density Polyethylene (R-LLDPE) continues to follow a descending trajectory due to persistently dwindling product demand and regulatory restrictions imposed on plastic materials by downstream Packaging and plastic industries in the region. These factors, coupled with low labor costs and convenient access to raw materials, encourage traders to invest in the product and submit competitive bids that compress profit margins. Production rates among key manufacturers have declined, resulting in unfavorable market fundamentals. Trading activity occurs on a need basis, with suppliers hesitant to procure substantial quantities of the product anticipating further price fluctuations.
Europe
During the second quarter of 2023, the price of R-LLDPE fell to USD 1461/ton Translucent Pellets FOB Hamburg in the German market. This decline was primarily driven by a drop in the consumption rate reported through market trade data, leading to increased inventory levels. The reduced utilization of R-LLDPE by major packaging and plastic industries contributed to abundant supplies in the region. Moreover, lukewarm interest expressed by potential purchasers from foreign markets had a negative effect on local market sentiments. Participants in the market appeared guarded, anticipating slower growth in earnings relative to historical norms. At present, the market is valued at a PE ratio of 16.1x, beneath its three-year mean PE of 26.5x. As indicated by market statistics, the inventory level of the product rose owing to a heightened consumption rate. The lower the market value, the more moderate the supply chain of the product, according to the trade data. The shipment situation was sufficient to help in keeping trade with the merchants and the consumers.
MEA
The market price of R-LLDPE plunged as per the trader’s data at USD 900/ton Blown Film Spot Ex-Riyadh in the MEA. During the second quarter of 2023, the price of R-LLDPE fell to USD 1461/ton Translucent Pellets FOB Hamburg in the German market. This decline was primarily driven by a drop-in consumption rate reported through market trade data, leading to increased inventory levels. The reduced utilization of R-LLDPE by major packaging and plastic industries contributed to abundant supplies in the region. Moreover, lukewarm interest expressed by potential purchasers from foreign markets had a negative effect on local market sentiments. Participants in the market appeared guarded, anticipating slower growth in earnings relative to historical norms. At present, the market is valued at a PE ratio of 16.1x, beneath its three-year mean PE of 26.5x. As indicated by market statistics, the inventory level of the product rose owing to a heightened consumption rate. The inventory rate of the product elevated due to the lower consumption rate of the product from the downstream plastics sector, as per the trade data.
R-LLDPE (Recycled Linear Low-Density Polyethylene) has decreased in the first quarter of 2023 due to a decline in demand from downstream industries such as films and packaging. This has resulted in a downward trend in prices for R-LLDPE. The poor demand fundamentals in the domestic market were the primary reason for the downward trend in prices. Additionally, the oscillating feedstock Ethylene prices also contributed to the decline. The falling regional uptake from packaging industries has negatively impacted R-LLDPE demand from these sectors. Under such circumstances, the sufficient inventory levels had made local R-LLDPE makers hesitant to produce more products. As a result, during the first quarter of 2023, the market for R-LLDPE showcased a downward trajectory.
In the first quarter of 2023, the R-LLDPE (Recycled Linear Low-Density Polyethylene) market in Asia experienced conflicting emotions. Prices fluctuated, and the upstream crude oil market's turbulence had an impact on production costs. But the downstream market had a sizable appetite for purchases, and the packaging market had stabilized at a high level, creating a high level of excitement for downstream procurement. Though the market was optimistic because of the strong supply and demand sides, the overall market environment was favorable. Despite these supportive factors, the market also experienced a short-lived downtrend because there were enough inventories in the area. Overall, during the first quarter of 2023, the R-LLDPE market in the Asian market fluctuated.
The European R-LLDPE (Recycled Linear Low-Density Polyethylene) market experienced pressure during the first quarter of 2023 due to weak demand and oversupply. The lower purchasing activity, coupled with weak end-use consumption from films and packaging industries, led to production curtailment as producers attempted to mitigate the effects of limited buyer appetite. Local R-LLDPE makers were also hesitant to produce products due to sufficient inventory levels to fulfill consumer demand. The overall weakness in other film industries also affected customers' attitudes toward the R-LLDPE market. As a result, the outlook for R-LLDPE-Translucent Pellets during the first quarter of 2023 appeared to be gloomy, with prices hovering at USD 1415/MT FD Hamburg during March.
