European PE Prices Continue to Slide as Weak Demand Keeps Buyers in Control

Europe’s polyethylene (PE) market remained under heavy pressure in July, with prices recording another sharp round of declines as weak demand and ample supply continued to outweigh fluctuations in crude oil. Despite ongoing geopolitical uncertainty in the Middle East, market participants said pricing is now being driven primarily by supply-demand fundamentals rather than energy markets.

Recent price corrections have erased a significant share of the gains recorded during the rally earlier this year. Across major PE film grades in Italy and Northwest Europe, values have moved much closer to pre-conflict levels after retreating steadily from their early May highs.

Price Movement Overview

Italy – HDPE Film
Increase from Pre-War to Peak: ▲ 101%
Peak Reached: Early May
Correction from Peak: ▼ 43%
Current vs Pre-War Level: ▲ 15%

Northwest Europe – HDPE Film
Increase from Pre-War to Peak: ▲ 105%
Peak Reached: Early May
Correction from Peak: ▼ 40%
Current vs Pre-War Level: ▲ 24%

Italy – LDPE Film
Increase from Pre-War to Peak: ▲ 110%
Peak Reached: Early May
Correction from Peak: ▼ 48%
Current vs Pre-War Level: ▲ 8%

Northwest Europe – LDPE Film
Increase from Pre-War to Peak: ▲ 113%
Peak Reached: Early May
Correction from Peak: ▼ 45%
Current vs Pre-War Level: ▲ 17%

Italy – LLDPE C4 Film
Increase from Pre-War to Peak: ▲ 104%
Peak Reached: Early May
Correction from Peak: ▼ 38%
Current vs Pre-War Level: ▲ 26%

Northwest Europe – LLDPE C4 Film
Increase from Pre-War to Peak: ▲ 106%
Peak Reached: Early May
Correction from Peak: ▼ 40%
Current vs Pre-War Level: ▲ 24%

Producers introduced July price reductions that generally matched or exceeded the decline in the monthly ethylene contract, with some contract offers reduced by around €300/ton. Imported PE from both the US and Asia also became more competitive, posting monthly decreases of approximately €200–250/ton amid healthy supply and stronger competition.

Even with these substantial price cuts, purchasing activity remained subdued. Most converters continued buying only the volumes needed for immediate production, supported by comfortable inventories, slow downstream demand, and the upcoming summer holiday season. Suppliers were reported to have revised quotations several times within the same week in an effort to stimulate sales, while overall product availability remained adequate.

Another factor adding pressure to the market is the removal of the EU's import duty on eligible US-origin PE products. As more duty-free cargoes begin entering Europe in the coming weeks, traders expect US material to become increasingly competitive, intensifying pricing pressure on domestic producers. Existing duty-paid inventories are expected to be gradually replaced by lower-cost imports.

Looking ahead, market sentiment remains cautious. Buyers believe prices have not yet reached a bottom, while suppliers continue competing aggressively for limited demand. Unless geopolitical developments lead to significant disruptions in exports, weak seasonal consumption, sufficient inventories, and rising import competition are expected to keep the European PE market under pressure through the summer.

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