Demand Fear and Adequate Supply Oscillate the Global High-Density Polyethylene Prices

Houston, USA- High-Density Polyethylene (HDPE) trading activities have further slowed down across the globe due to sufficient trade volume and a weak polyolefin market. Producers have cut their reactor rates prompted by adequate stocks among the manufacturing units. With the week ending on 30th Sept, the price of HDPE in Germany slipped to USD 1480/tonne (Raffia Grade) (FD Hamburg). In terms of feedstock, Ethylene prices also showed a downtrend supported by sluggish crude and Naphtha values. Purchasing activities of HDPE in Germany remained deterred, and inventories were burdensome.

In the Asian market, producers and other significant olefin providers kept trading at lower bids. The bearish tide had changed alongside lower operating rates and a decline in HDPE costs. The price of naphtha has plunged in Asia amid declining crude oil costs and China's economic slowdown. Prices of HDPE in FOB South Korea and CFR Singapore have also fallen with deteriorating demand from the end user plastic and packaging industries.

However, despite the fall in feedstock prices in the USA, the HDPE market remained stable, where the prices were hovering around USD 1441/tonne- USD 1555/tonne (Blow molding Grade) FOB Texas. Due to an explosion in Premax's ethane pipeline the previous week, crackers, and derivatives plants at its petrochemical facilities in Coatzacoalcos, Mexico, were out of operation. High-Density Polyethylene trading activity was lackluster as weak demand continued for various reasons such as the slowing global economy, near-term economic uncertainty, and ongoing overproduction of olefin.

According to ChemAnalyst, the price of HDPE in the global market will decline further in the forthcoming weeks. In the USA, energy values will remain volatile, but the strong dollar and recession fear will drive the global olefin market down as the US being the major exporter of HDPE. In Germany, the HDPE market will crumble with lower cost support and a slump in demand for the product from the downstream ventures. The economic slowdown and demand destruction will weigh on the global Polymer market.