Europe PE Market Shows Signs of Recovery as Low-Priced Offers Disappear

Europe's polyethylene (PE) market is beginning to stabilize after nearly three months of continuous price declines. While demand remains seasonally weak ahead of the summer holiday period, the aggressive low-priced offers that dominated the market earlier in July have largely vanished, indicating that sellers are becoming more confident.

Supported by firmer feedstock expectations, higher import costs, and renewed volatility in energy markets, producers are showing less willingness to sell at previous low levels. Although a strong demand recovery is still unlikely before September, market sentiment has improved noticeably.

Sellers Turn More Confident

The biggest shift in recent weeks has been the disappearance of heavily discounted PE offers that had previously pressured the market.

Many buyers reported that the attractive deals available earlier this month are no longer available. At the same time, several producers temporarily paused new sales while waiting for the August ethylene contract settlement before finalizing their pricing strategies.

Most market participants expect suppliers to seek price increases broadly in line with the upcoming ethylene settlement, with expectations ranging from €20–30/ton, while some anticipate hikes of up to €50–60/ton.

Import offers have also strengthened, supported by higher US prices for October shipments and tighter availability of certain grades, particularly Saudi Arabian LLDPE and European HDPE film, due to ongoing production issues.

Buying Improves, But Demand Remains Cautious

Some converters have started limited restocking after taking advantage of lower prices during the recent downturn, while others have already secured enough material to cover their August requirements.

Despite this improvement, buying activity remains selective. Weak downstream demand and the upcoming summer holidays continue to limit overall market activity, with many converters purchasing only according to immediate production needs.

Buyers also warned that any sharp price increases could quickly face resistance if demand fails to improve.

Higher Costs Support Market Outlook

The recovery in crude oil prices has further strengthened market sentiment, supporting expectations for the first PE price increases since the decline began in early May.

Following extensive inventory reductions during June and July, producers are no longer under significant pressure to clear stocks. Several suppliers have temporarily closed their order books while awaiting the August ethylene settlement, reflecting stronger confidence in the market.

Although demand remains below normal levels, the market has clearly moved away from the aggressive discounting seen earlier this summer. Industry participants expect sellers to continue pursuing higher prices, but a sustained recovery will ultimately depend on stronger downstream demand after the summer holiday season.

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