LLDPE Prices Dip in US and Europe Amidst Softening Demand and Lower Feedstock Costs

In November 2023, there was a decline in the Linear Low-Density Polyethylene (LLDPE) market in both the US and European regions. The reduction in the US market was mainly due to excess material inventories coupled with weak demand from domestic and international markets, particularly in Asia and Europe. Further, economic challenges and geopolitical tensions in Europe contributed to subdued sentiments in the European LLDPE market. Furthermore, decreasing crude oil prices influenced global market dynamics, leading traders to adopt a cautious approach toward initiating new orders.

The LLDPE market in the USA encountered challenges during this timeframe, driven by a decline in the prices of feedstock Ethylene and upstream Naphtha, which was influenced by an economic slowdown and a decrease in Crude oil prices. While the domestic market demand remained stable, export demand from Asian traders decreased, although there were still inquiries from Latin America and Europe, though in reduced quantities. During the month, export offers for LLDPE began to surface, prompting some producers to adjust their prices downwards to align with the softer international sentiment, likely influenced by the declining Crude oil prices.

Furthermore, the energy sector exhibited mixed dynamics, with Crude oil prices experiencing a decline primarily due to a weaker demand outlook, impacting the production cost of LLDPE. As the month concluded with the Thanksgiving Holiday week, the LLDPE market persisted at a subdued pace, with the earlier upward momentum diminishing and market sentiment turning negative. The shift in LLDPE prices can also be attributed to improved resin availability, particularly in the Polyethylene market. This improvement followed the conclusion of Force Majeure at Nova and Chevron Phillips Chem plants in Sarnia, Ontario, and Orange, Texas.

This month, the price of LLDPE experienced a decline in Europe, driven by decreasing feedstock Ethylene costs and subdued demand from the regional market. The reduction in feedstock Ethylene was influenced by the decline in upstream Naphtha and Crude oil prices, resulting in decreased production costs for the LLDPE product. Further, the LLDPE market faced lackluster demand in the region due to challenging economic conditions and sluggish purchasing activities. The prevailing sentiment remained pessimistic, deviating from the typical demand patterns expected during this season. Market participants found themselves uncertain about the short to medium-term direction of the market, leading to cautious and minimal purchasing activities. While demand remained relatively steady in the downstream packaging sector, there was a notable decline in buyers' interest in downstream construction businesses, reflecting a downturn in the construction sector. Moreover, heightened uncertainty arising from tensions in the Middle East added to the cautious atmosphere, potentially influencing businesses and households to adopt a more careful approach to their actions and decisions.

As per ChemAnalyst, the LLDPE market may remain pessimistic by the end of this year in the global market, particularly in the US and Europe. Though the demand for LLDPE may increase slowly, the challenging global economy may impact consumer sentiments. Further, feedstock Ethylene and upstream Crude oil prices are expected to influence the price trend for the product.