In Q1, the price of Recycled Linear Low-Density Polyethylene (R-LLDPE) remained stable due to the balanced gap between the demand and supply contrasting with fluctuations observed in other recycled plastic materials. This stability was primarily attributed to consistent demand from key sectors such as agriculture and flexible packaging, where R-LLDPE is extensively utilized for films and wraps. Additionally, a steady supply of post-consumer and post-industrial waste, coupled with minimal disruptions in recycling operations, supported balanced market conditions. In contrast, other recycled plastics experienced price volatility due to varying supply chain dynamics, demand inconsistencies, and cost pressures from virgin resin markets. The resilience of R-LLDPE underscored its critical role in stable applications.
In Q2 2024, the R-LLDPE market witnessed a price increase of approximately 9% in Europe, driven by heightened demand from the packaging industry. This surge was bolstered by the seasonal uptick in consumer goods and packaging requirements during the summer months. Concurrently, US R-LLDPE market experienced rising prices due to a combination of supply constraints, elevated production costs, and strong demand across various sectors. Additionally, increased freight rates caused by the Red Sea crisis further impacted global R-LLDPE prices, supporting the upward trend.
By the start of Q3 2024, R-LLDPE prices continued to rise, driven by increased demand from construction and agriculture industries, which ramped up activities during this season. Fluctuations in the availability of post-consumer HDPE waste, influenced by collection efficiencies and recycling rates, also played a role in price movements. Furthermore, changes in crude oil prices affected the cost of virgin HDPE, indirectly impacting R-LLDPE competitiveness. Global trade dynamics, including import/export regulations, transportation costs, and energy prices for recycling operations, added to the upward momentum in prices.
Looking ahead to Q4 2024, the R-LLDPE market is anticipated to see a decline in prices following two consecutive quarters of increases. Cooler weather in many regions is expected to soften demand, particularly from the packaging sector. Additionally, the stabilization of freight rates after disruptions caused by the Red Sea crisis and port congestion is likely to reduce cost pressures. Demand for agricultural films made from R-LLDPE is also expected to decline, except in regions with winter crop cycles or continuous agricultural activities. These factors are expected to lead to a seasonal adjustment, resulting in a potential price dip.