End April Exhibits Varying Price Trend for LDPE, Rises in Asia but not in Europe and US

During the last week, there was a varied movement in Low-density Polyethylene (LDPE) prices across different global markets. Prices declined in Europe and the USA, while the Asian LDPE market saw an increase. The main factors behind these price shifts in Western markets were subdued demand and abundant supplies, while the Asian LDPE market showed slight improvement by the end of April. Production costs were influenced by factors like the prices of feedstock Ethylene, upstream Naphtha, and Crude oil. Additionally, disruptions in supply routes due to geopolitical tensions also impacted the market. As a result, European LDPE prices decreased by 1%, USA prices by 2%, whereas Chinese LDPE prices rose by 1% by the week ending on April 26th, 2024.

In Europe, a combination of reduced demand from downstream industries and the absence of competitive pressure with cheaper US import materials has led to a decline in LDPE prices. The shorter working month in Europe due to the Easter holidays and upcoming public holidays in May is expected to worsen the decrease in demand from converters. Even sectors like construction and beverages, typically active in spring, are not showing signs of recovery. Given the softness in order volumes, converters are procuring materials solely to fulfill their current production requirements. Additionally, the decreasing cost of feedstock Ethylene has further contributed to the downward price trend of LDPE. Moreover, the ongoing decrease in U.S. crude oil prices, along with an increase in U.S. inventory build, and uncertainty surrounding interest rate cuts and the future of oil demand growth have impacted the global market overall.

Moreover, in the US, the LDPE market witnessed a slowdown from the brisk trading pace of recent weeks. This easing could be attributed to a somewhat reduced demand from downstream packaging and construction sectors, affecting pricing after the previous week's uptick. Furthermore, stable feedstock Ethylene costs contributed to maintaining production expenses amid ample supplies, allowing market participants to keep LDPE prices stable. While export sales remained robust, they did not exceed domestic business levels seen in previous weeks.

Meanwhile, the LDPE market in Asia, especially in China, exhibited a strong performance driven by various factors affecting supply, cost of raw materials, and demand dynamics, resulting in a price surge. The market benefited from the favorable impact of the high volatility in international Crude oil prices on costs, which supported LDPE prices. However, demand patterns presented a mixed picture as the off-season for greenhouse film led to reduced demand, with some enterprises undergoing maintenance, while the plastic film sector, nearing the end of its peak season, experienced a decline in market order accumulation. Despite this, traders managed to push LDPE prices higher after a stable trend in the previous week.