Category

Countries

Western LLDPE Market Confronts a Decline in December Amidst Trade Challenges
Western LLDPE Market Confronts a Decline in December Amidst Trade Challenges

Western LLDPE Market Confronts a Decline in December Amidst Trade Challenges

  • 08-Jan-2024 4:47 PM
  • Journalist: Li Hua

In December 2023, the Linear Low-Density Polyethylene (LLDPE) market experienced a depreciation in Western markets, particularly in the US and Europe. The weakening in prices can be primarily attributed to the global weak demand for LLDPE and the abundant availability of stock. The decrease in feedstock Ethylene and upstream Naphtha costs in the region has also played a role in pushing down the prices. Furthermore, various factors such as the holiday season, geopolitical tensions in the Middle East, supply chain disruptions caused by low water levels in the Panama Canal, and an attack by Houthi rebels affecting transportation in the Red Sea amid an economic slowdown, have collectively influenced market dynamics and contributed to the pricing fluctuations of LLDPE during this period. Thus, the price of LLDPE Film Butene-based FOB Texas(USA) fell by 2% while the LLDPE Film FD Hamburg(Germany) declined by 5% this month.

The LLDPE market in the United States experienced a plummeting trend due to sluggish demand from downstream packaging and construction industries this month. Despite fluctuations in feedstock Ethylene, influenced by improved market activity before the holidays, and a continued decrease in upstream Naphtha amid easing Crude oil prices, LLDPE prices saw an overall decrease. Initially, the month witnessed steady market activity with a consistent flow of customer orders for LLDPE. However, as the year approached its end, some buyers reduced their purchasing efforts, maintaining a positive outlook and anticipating the possibility of December discounts extending into January. Further, export demand from the United States remained steady in Europe and Latin America. Sellers were willing to consider fair offers, leading to reduced prices in exchange for larger quantities, although there were some limitations on the extent of discounts which overall led to a slump in the price of LLDPE.

In Europe, the drop in LDPE prices can be linked to reduced costs of feedstock Ethylene and a subdued demand from the regional market. The decrease in feedstock Ethylene, influenced by declining upstream Naphtha and Crude oil prices, has eased production expenses for LLDPE. Further, the lackluster demand for LLDPE in the market can be attributed to challenging economic conditions and restrained purchasing activities, deviating from the usual seasonal demand patterns. Furthermore, security concerns arose in mid-December following attacks on commercial vessels in the southern Red Sea. As the crisis escalated just before the Christmas holidays, global apprehensions about supply chain disruptions intensified. 

According to ChemAnalyst, LLDPE prices are expected to rise in January due to potential increases in demand and higher freight charges resulting from shipment congestion in the Panama Canal. The situation is further complicated by the prolonged disturbances in the Red Sea and Bab-el-Mandeb Strait. If wait times at the Panama Canal continue to increase, exporters may need to consider alternative routes, such as navigating around the tip of Africa through the Cape of Good Hope. However, this alternative comes with challenges, including a longer distance, extended transit times, higher fuel costs, and potential disruptions associated with the prolonged voyage, introducing logistical and economic complexities for exporters.

Related News

LLDPE Faces Divergent Trend as Europe and US Markets Dwindle with Asia Sustaines Stability
  • 03-Jun-2024 3:53 PM
  • Journalist: S. Jayavikraman
Global LLDPE Market Dips Amid Excess Supply and Low Demand in April 2024
  • 22-Apr-2024 6:15 PM
  • Journalist: Jung Hoon
LLDPE Prices See Mixed Trends as Europe and US Market Ease, While Asia Sees Rise
  • 22-May-2024 5:07 PM
  • Journalist: Shiba Teramoto
LLDPE Prices Hike in Europe and USA: Supply Shortages and High Demand Drive Surge
  • 01-Mar-2024 4:21 PM
  • Journalist: Motoki Sasaki