In the Arabian Recycled Linear Low-Density Polyethylene (R-LLDPE) market, an ongoing trend of declining prices persists, driven by challenges related to the diminishing price support for scrap LLDPE materials and the increasing rates of post-consumer product collection, said Chemanalyst.
These factors pose obstacles to the sustainable growth of R-LLDPE recyclers. The market landscape is further complicated by a marginal weakening in the Purchasing Managers' Index (PMI). On the supply side, an oversupply situation of R-LLDPE, coupled with ample inventories, and subdued procurement activities from overseas markets during the current seasonal phase, contribute to weakened export dynamics. Suppliers are responding with consistent discount offerings to incentivize larger volume purchases. However, the downstream industry is grappling with heightened freight rates with increased shipping cost, prompted by security concerns following attacks by Yemen’s Houthi militants on commercial vessels in the Red Sea. Consequently, the European R-LLDPE market remains stable, reflecting the impact of elevated import costs for the product.
The Arabian market is grappling with an oversupply scenario, sustained by an unaltered production capacity of R-LLDPE material, which has established a bearish sentiment. This situation poses a challenge for suppliers in effectively managing excess inventory. The R-LLDPE market faces downward price pressure attributed to weakened product procurement activities during the Christmas holidays, influenced by reduced downstream industrial production and manufacturing activities for the final finished product with fewer staff members available during the holiday season. Enterprises are leaning towards immediate stock procurement rather than engaging in bulk purchases, contributing to subdued trading activities and the persistence of oversupply. The intricate interplay of these factors presents challenges for R-LLDPE suppliers, navigating a market influenced by both oversupply and specific weaknesses within certain sectors.
In the European market, the R-LLDPE sector is experiencing the impact of reduced demand from major recycling industries such as Packaging and automotive parts manufacturing industries. However, during the third week of December R-LLDPE prices remained steady due to rising import cost, but at its lower end. This influence has set off a series of reactions within the market. The reduction in industrial production and manufacturing activities has led to a decline in R-LLDPE demand from these pivotal sectors. These intricate market dynamics present considerable challenges for recyclers striving to achieve sustainable growth in the market. Furthermore, the absence of changes in the Purchasing Managers' Index (PMI) has cast a shadow over the overall growth prospects of the market, introducing an additional layer of complexity to the market landscape.
We remind, Recycled Linear Low-Density Polyethylene (R-LLDPE) market showcased a downward trend in the European market in the third week of June 2023. According to sources, the price of R-LLDPE translucent pellets decreased by (0.7%) in Germany when compared with the previous week. Overall consumption of R-LLDPE showed a deep contraction from the downstream packaging and plastic industries and failed to regain momentum in the European region.
mrchub.com