European PE Market Faces Continued Downward Pressure as Demand Remains Weak

The European polyethylene (PE) market has extended its decline in June, with prices coming under increasing pressure from weak demand, comfortable supply levels, and cautious buying behavior. Although the June ethylene contract settled €50/ton lower, PE price reductions have been significantly larger as sellers compete for limited business.

Following the strong rally seen earlier this year, market dynamics have shifted in favor of buyers. Demand remains sluggish across key end-use sectors, while many converters continue to hold adequate inventories, reducing the urgency for fresh purchases.

Price Cuts Exceed Feedstock Decline

June negotiations opened with reductions well beyond the drop in ethylene costs. Across Italy and Northwest Europe, most suppliers lowered PE offers by €100-150/ton, while some grades recorded even sharper declines.

LDPE has been the weakest segment, experiencing the largest corrections as sellers attempted to attract demand. LLDPE and HDPE prices also moved lower amid growing competition and soft market fundamentals.

Although PE prices have retreated notably from the highs reached in early May, they remain significantly above levels seen before the spring rally.

Buyers Continue to Delay Purchases

Despite substantial discounts, buying activity remains limited. Many converters believe prices could fall further and are therefore restricting purchases to immediate production needs.

Market participants reported that buyers remain comfortable with existing inventories and see little reason to return aggressively to the market. The expectation of additional price reductions has encouraged a wait-and-watch approach, slowing trading activity across the region.

Several converters indicated they are postponing negotiations until later in the month, hoping to secure more competitive levels.

Weak Demand Weighs on Market

The lack of support from downstream sectors continues to be a major challenge. Processors report difficulties passing previous resin cost increases to their customers, while overall consumption remains below expectations.

As a result, available material continues to exceed buying interest, forcing suppliers to maintain a competitive pricing strategy in order to secure sales.

Bearish Outlook for June

Market sentiment remains largely negative for the remainder of June. Weak demand, sufficient availability, and softer feedstock costs are expected to keep pressure on PE prices.

Most players believe further corrections are possible, particularly in the LDPE segment, which remains the most vulnerable. Unless downstream demand improves meaningfully, the current downward trend is likely to continue through the coming weeks, with buyers maintaining the upper hand in negotiations.

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