In Q1, the price of Recycled Low-Density Polyethylene (R-LDPE) rose by about 9%, driven mainly by higher demand from the downstream packaging industry. Additionally, the domestic supply of the product was limited, further supporting the upward price trend. The Red Sea crisis also disrupted the supply chain, affecting the global chemical industry and contributing to the continued increase in prices.
In Q2 2024, the R-LDPE market in India saw a price increase of around 3%, driven by higher demand from the packaging industry. This rise was further supported by the seasonal boost in consumer goods and packaging needs during the summer months. At the same time, the European R-LDPE market also experienced price hikes due to supply constraints, rising production costs, and robust demand across multiple sectors. Additionally, increased freight rates caused by the Red Sea crisis further impacted global R-LDPE prices, reinforcing the upward trend.
In Q3 2024, the R-LDPE market experienced a price decrease, with prices dropping by approximately 10.8% in India. This decline was primarily driven by a reduction in demand from the packaging industry following the last of summer season. Additionally, the availability of supply improved, easing some of the previous constraints. In Europe, the R-LDPE market also saw a downward trend due to weaker demand across key sectors and a stabilization in production costs. Moreover, the easing of freight rates, following the resolution of the Red Sea crisis, contributed to the global price reduction, supporting the downward market movement.
Looking ahead to Q4 2024, the R-LDPE 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-LDPE 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.