For the Quarter Ending March 2023
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.
For the Quarter Ending December 2022
The price of recycled linear low-density polyethylene decreased in North America during this quarter, just like it did in Europe. The fall in the price of upstream crude oil had a significant impact on the cost of this commodity in the United States. Because downstream businesses preferred virgin LLDPE for their manufacturing processes, they only had a passing interest in this product. As a result, there were more unsold quantities of this product in inventories, necessitating quote reductions on the part of suppliers and sellers to increase sales and clear out stocks.
This quarter, the market sentiments for recycled liner low-density polyethylene were mixed in the Asia-Pacific region. In general, this product's price increased in China in the second week of October, remained stable throughout November, and decreased in December. The price of this product was affected by lower crude oil prices. The implementation of Covid-19 restrictions hampered downstream companies' production activities, resulting in a decrease in demand for this product, which also contributed to the cost reduction. Throughout this quarter, the price of this product decreased in India. The average interest in this product from packaging and construction materials manufacturers and plastics product manufacturers impacted R-LLDPE's cost. The subpar performance of the upstream crude oil market was another factor in the cost reduction.
The price of recycled linear low-density polyethylene in Europe decreased significantly during this quarter. The cost of this product began to decrease in the third week of October, remained stable for a while, decreased twice in December, and remained inactive for the final few weeks of this quarter. This product was receiving average demand because businesses downstream were more concerned about rising energy costs as a result of the ongoing conflict between Russia and Ukraine. As a consequence of this, numerous stocks of this product were not traded.
For the Quarter Ending September 2022
In the third quarter of 2022, the R-LLDPE market in North America experienced ups and downs. There was occasionally an oversupply of this product in the market as a result of downstream companies' preference for non–recycled LLDPE over this product for their manufacturing activities, which sparked a modest interest. However, due to the stability of the demand-to-supply ratio, this product's prices remained relatively constant for the majority of the time. Due to the summer break, the LLDPE recycling companies shut down their facilities.
Recycled Liner Low-Density Polyethylene was experiencing mixed market sentiments in the Asia–Pacific region this quarter. When it comes to India, in the first two months, the cost of this product witnessed a downfall. The reduction in cost was primarily attributed to the bearish upstream crude oil market, and the other main reason behind the price reduction was the weakening of the Indian Rupee against the U.S. dollar. Packaging and construction materials, as well as plastic products manufacturing firms, were showing average interest in this product, which, too, had an impact on R-LLDPE's cost. In China, overall, the price of this product stepped down in this quarter. The downfall in cost was because of the diminished demand for this product from downstream companies, as they were facing power shortages, which hampered their production activities. Upstream companies, too, had to reduce their manufacturing rates because of uncertainties in power supply. Reduced crude oil prices also had an impact on the cost of this product. Hence, R-LLDPE closed its market this quarter at USD 990 per MT for extrusion grade on FOB – Tianjin basis.
Between July and September, the cost of Recycled Linear Low – Density Polyethylene in Europe decreased significantly. Because downstream businesses were more concerned about the uncertainty of energy supplies as a result of the ongoing conflict between Russia and Ukraine, this product was receiving average demand. As a result, there were ample stocks of this product that were not traded. Energy costs were so high that upstream companies had to lower their production activities. On FOB - Hamburg basis, this product ended the quarter at USD 1,537 per MT for translucent pellets grade.
Spot R-LLDPE offers improved significantly and witnessed an uptrend in the second quarter of 2022 in the North America Region. The diminished COVID cases have pushed manufacturing capacities to operate at their full capabilities. Also, the prices of upstream LLDPE have surged by 2% from the first quarter amid strong demand from the downstream packaging sector. Additionally, the high price of crude oil amid global supply chain disruptions brought on by the Russia-Ukraine war has pushed the manufacturing costs of R-LLDPE in the regional market. Furthermore, the top market participants are focused on product innovations utilizing green technologies, which has become a crucial factor in the market growth of recycled plastics.
R-LLDPE prices witnessed mixed sentiments in the Asia-Pacific region during the second quarter of 2022. In China, the supply has been stained by pandemic-related restrictions. The curtailed supplies of plastic scrap provoked industrial production at its lowest level amid the active demand from the downstream packaging sector. Furthermore, in India, the price realizations of R-LLDPE have significantly surged by 6.5% from the prices observed at the first quarter-end. The top market participants are stepping up their efforts for green packaging materials, prompting an upward pressure on R-LLDPE costs. Also, the fluctuating energy costs have pressured the market sentiments of R-LLDPE in the domestic Indian market. The prices for R-LLDPE-Film Extrusion Spot Ex-Delhi NCR (India) settled at INR 110700 per ton in June 2022.
In the second quarter of 2022, the R-LLDPE price in Germany increased due to greater demand and sluggish supplies. The supply disruption brought on by conflicts between European nations has pressured the global crude oil prices, inflicting the market value of R-LLDPE. The upturn in energy costs and escalated freight charges amidst global supply-side concerns have substantially influenced the price trends of R-LLDPE in the spot market. Also, the curtailed availability of post-consumer bales has pushed the costs up and exacerbated the market inquiries for R-LLDPE. In addition, the hampered trade activities due to technical failures in Chinese export ports intensified the situation even further. The R-LLDPE-Translucent Pellets FOB Hamburg averaged USD 1750 per ton in June.