Global HDPE Market Reports Mixed Situation Amidst Supply Adjustments

Over the past week, High-density Polyethylene (HDPE) prices displayed a mixed trend across the global market. Prices in Europe experienced a decline, contrasting with stable prices in the US. Meanwhile, the Asian HDPE market witnessed a slight increase. Lackluster demand, coupled with ample supplies worldwide, has been the primary driver behind these price fluctuations. Further, the costs of production have been influenced by factors such as feedstock Ethylene, upstream Naphtha, and Crude oil prices. Moreover, disruptions in supply routes due to geopolitical tensions have further impacted the market. Consequently, European prices dipped by 2%, whereas Chinese HDPE prices edged up by 0.4% by the week ending on April 26th, 2024.

In Europe, reduced demand from downstream industries, coupled with the absence of competitive pressure from cheaper US import materials, has driven a downward shift in HDPE prices. The shorter working month in Europe due to the Easter holidays and upcoming public holidays in May is expected to exacerbate the decrease in demand from converters. Even sectors like construction and beverages, typically active in spring, show no signs of recovery. With weak order books, converters are purchasing only enough material to meet immediate production needs. Furthermore, the easing cost of feedstock Ethylene has further supported the downward price trend of HDPE.

Furthermore, in the US, the HDPE market experienced a slight ease from the rapid trading pace in recent weeks. While demand may have slowed somewhat, it wasn't enough to impact pricing, which remained stable for a second consecutive week following previous declines. Additionally, stable feedstock Ethylene costs supported production expenses, enabling market participants to maintain HDPE prices unchanged. Export sales remained firm but didn't surpass domestic business levels as observed in previous weeks. Overall, processors seemed well-supplied, and traders noticed a fairly typical order flow, indicating neither significant inventory accumulation nor destocking activity.

Meanwhile, the Asian market saw a slight uptick, particularly in China where demand for HDPE improved. The high volatility of international Crude oil prices has been beneficial for the HDPE market on the cost front. On the supply side, the pressure has eased with the onset of spring inspections and more petrochemical shutdowns for maintenance, leading to a slight increase in HDPE prices. However, demand for HDPE is constrained by stagnation, especially as the agricultural film production season nears its end, resulting in decreased demand from the agricultural sector. Conversely, demand from downstream food and beverage packaging in the consumer sector has remained stable.