Volatile Market Dynamics Dwindling Ethylene Prices In Europe

Market dynamics are frequently shifting in the European region post-global inflation, ongoing conflicts and sanctions on Russia, and restriction on import-export activities between Russia and Europe. Amid this uncertain market situation, the prime petrochemical Ethylene price trend fluctuated, and its price trend declined in June.

Ethylene is a prime petrochemical intermediate produced by thermal cracking of Naphtha, obtained after distillation of Crude Oil, to produce plastics like LDPE, HDPE, and LLDPE and solvents for paints. Mainly produced by the United Kingdom and the Netherlands in the European Region and exported to the regional markets of Belgium, Germany, Italy, and Spain.

Ethylene prices reduced by 1% and 0.6% during the 1st and 2nd week of June in the United Kingdom as per ChemAnalyst data. Subsequently, values dropped in the other regional markets of Europe as in Germany value drop was 0.9% and 0.6% in 1st and 2nd week respectively, due to a reduction in upstream Naphtha prices caused by fluctuations in Crude oil and Natural gas values.

Material supplies were affected during the summer holidays and observed port congestion due to the shortage of containers. From the 3rd week, prices started upsurging and increased by 2% and 1.2% in the United Kingdom & Germany, respectively, due to rising fuel and transportation costs in the region, along with high energy costs causing an escalation in production costs. However, consumer demand remained moderate from the downstream Polyethylene in the construction sector.

As per ChemAnalyst experts, “Current volatile market dynamics indicate that prices of Ethylene will decline for a while and then will start upsurging following its upstream Naphtha prices. However, With the prime goals of sustainable development, Europe’s prime focus is on recycled polyethylene products rather than single-use plastics. So, demand from various end-user manufacturing industries is likely to remain modest as inflation is continuously impacting the purchasing power of consumers.”