Europe and Asia Witnesses Unprecedented Slumps in LDPE and LLDPE Prices Owing to the Poor Demand

Low-Density Polyethylene (LDPE) and Linear Low-Density Polyethylene (LLDPE) markets are generally high during April as the demand for Agricultural films and Liquid packaging films peak during this month in the European region. Local market activities were dull ahead of the long easter weekend in several European countries. Although the current season for LLDPE and LDPE is generally one of high demand, this year, the market showed signs of poor demand throughout this month. Because there were fewer working days in April than in March, the majority of participants in Europe took time off. However, some others participants did not have much optimism for an improvement in market circumstances. The upstream Ethylene contract prices fell by 40-45 USD/MT this month, further weakening the pricing sentiments of LLDPE and LDPE in Europe.

Reliance Industries Limited reduced LLDPE and LDPE grades effective April 1, 2023, in the Indian market, as price protection is no longer in effect. The offers of re-export cargoes from China over the past three months caused the acquisition momentum to slow down. Most of the converters had restocked their inventories with materials obtained from domestic producers at reduced prices who were eager to relieve inventory strain at their manufacturing facilities.

LLDPE and LDPE prices in Southeast Asian markets also dropped. As a few production facilities have resumed operations after being shut down from January to March this year for maintenance turnarounds, cargo supplies from Southeast Asia and the Middle East have increased and are anticipated to climb further over the coming weeks.

According to ChemAnalyst, the prices of LLDPE and LDPE globally have decreased throughout this month, surprising most of the market players. However, the hopes of witnessing improved demand fundamentals are high as the downstream packaging sector is highly likely to perform better, and the prices of LLDPE and LDPE are expected to turn around during the end of this month.