Other PE grades follow LDPE to record highs in Europe as demand falters under pressure

Europe’s PE markets extended their sharp rally through March and April, with gains accelerating across all major grades. While LDPE led the surge by reaching fresh all-time highs, other PE grades—including HDPE and LLDPE—have now followed suit in Italy, climbing to record levels and marking a historic turning point for the broader PE complex. Across West Europe, prices also approached record levels. Only mLLDPE lagged behind the broader trend.

However, as prices across the PE chain moved into unprecedented territory, demand has started to show clear signs of fatigue, raising concerns that the bullish cycle may start losing traction.

Broad-based rally pushes PE complex to historic highs

The bullish momentum, initially driven by LDPE, quickly spilled over into other PE grades as tight supply, soaring ethylene prices, and disrupted import flows reshaped the market landscape.

By April, HDPE and LLDPE prices had caught up with the rally, reaching record highs or revisiting peaks last seen during the 2021-2022 market spike. This synchronized uptrend across the PE complex reflects the depth of supply constraints and cost inflation affecting the region.

Yet, unlike earlier phases of the rally, the latest leg higher has been increasingly disconnected from underlying demand fundamentals.



Buyers cut volumes as prices become unsustainable

As prices surged across all PE grades, buyers have struggled to keep pace. Market participants report that many converters have reduced purchasing volumes to below 50% of normal levels, as they face mounting difficulties in passing on higher costs.

A growing number of buyers prefer to run down inventories or delay purchases, while several sellers confirmed order cancellations, pointing to rising resistance in the market.

One seller noted that despite successfully applying steep April increases, demand has slowed noticeably as “buyers cannot afford these levels anymore.” Similarly, a trader reported that even with €450-500/ton hikes, buying interest has weakened amid affordability constraints.

Imports offer partial relief amid inflated domestic prices

With local prices surging across all PE grades, buyers have increasingly turned to imports—particularly US-origin material—for more competitive options.

Some buyers secured a large share of their requirements from the import market for the upcoming months, aiming to hedge against further increases. However, import supply remains far from abundant, with limited US availability and ongoing logistical disruptions continuing to cap inflows.

Meanwhile, Middle Eastern PE supply has been severely disrupted, with outages and precautionary shutdowns at the Ruwais Industrial Complex and Jubail Industrial City significantly curbing export availability and tightening the regional supply pool.

Demand slowdown raises concerns over market sustainability

Despite ongoing supply tightness, the demand side is becoming the key point of concern. Processors report weaker end-product demand and continued challenges in transferring cost increases downstream.

Many buyers have shifted to a hand-to-mouth strategy, while others are partially reflecting increases to their customers or averaging costs between old stocks and new purchases.

The risk now is that persistently high PE prices across all grades could slow activity throughout the value chain, potentially undermining the sustainability of the rally.

May outlook: Smaller increases as market reaches limits

Looking ahead, market players expect PE prices to remain firm in May, supported by tight supply, elevated costs, and geopolitical uncertainty.

However, there is a broad consensus that further increases will be more limited compared to the sharp hikes seen in March and April. Even in the case of a strong ethylene settlement, demand constraints are likely to cap the upside.

Several participants believe the market is approaching a tipping point, where end-users may no longer absorb further increases, raising the possibility of slower trading activity or even consolidation.

PE rally faces resistance, momentum set to ease as demand cracks under record prices

Europe’s PE markets have entered a new phase where the rally is facing a clear reality check. Unlike the more gradual increases seen during the pandemic-era peak in 2021, prices have surged within a matter of weeks, leaving buyers with limited room to absorb costs. According to ChemOrbis Product Snapshot, PE prices in Italy posted gains of 100-110% in the past seven weeks.

While supply conditions remain tight and prices are expected to stay elevated in the near term, weakening demand is emerging as the decisive factor. Unless downstream markets recover, the current momentum is likely to ease, potentially giving way to a more balanced—or even stalled—market environment.