Global HDPE Prices See a Downturn in November 2023 Amidst Weakened Demand
- 29-Nov-2023 2:23 PM
- Journalist: Nicholas Seifield
High-Density Polyethylene (HDPE) market experienced a depreciation in the US and European regions in November 2023. This declining trend in the US can primarily be attributed to the surplus inventories of the material amid sluggish demand from the domestic as well as overseas markets, particularly Asia and Europe. Also, the European HDPE market sentiments remained subdued owing to the region's challenging economic conditions and geopolitical tensions. Further, the decreasing Crude oil prices have impacted the global market dynamics, and traders have been cautious in making new orders.
During November 2023, the HDPE market faced challenges in the USA as the price of feedstock Ethylene and upstream Naphtha declined amid an economic slowdown, and the price of crude oil eased. The demand from the domestic market remained steady while the export demand from the Asian traders decreased. Inquiries from Latin America and Europe continue to flow, although in reduced amounts. In November, export offers for HDPE started to emerge, and some producers adjusted their prices downward to align with the softer international sentiment, which the declining Crude Oil prices have likely influenced. The energy sector exhibited mixed dynamics once again, with crude oil prices declining this month primarily due to a weaker demand outlook, thus impacting the production cost of HDPE. Further, as the Thanksgiving Holiday week neared its conclusion at the end of the month, the HDPE market persisted at a subdued pace. The previously upward momentum has diminished, and market sentiment has turned negative. This shift in HDPE prices can also be attributed to an improvement in resin availability, especially in the Polyethylene market, following the end of Force Majeure at Nova and Chevron Phillips Chem plants in Sarnia, Ontario, and Orange, Texas.
The price of HDPE witnessed a downshift this month in Europe amid declining feedstock Ethylene costs and subdued demand from the regional market. The feedstock Ethylene declined as the upstream Naphtha and Crude oil decreased, easing the production costs for the product. Further, The HDPE market demand has seen lackluster amid challenging economic conditions and unhealthy purchasing activities as the prevailing sentiment remained pessimistic compared to the typical demand patterns seen during this season. Market participants were uncertain about the short to medium-term direction of the market, leading them to make only minimal purchases. Demand remained relatively steady in the downstream packaging sector, but there was a significant decline in buyers' interest in the downstream construction businesses as the construction sector witnessed a downfall. Furthermore, the heightened uncertainty stemming from Middle East tensions could prompt businesses and households to adopt a more cautious approach to their actions and decisions.
As per ChemAnalyst, the market sentiments may remain pessimistic by the end of this year in the US and European regions. Though the demand for HDPE may increase, the challenging global economy may impact consumer sentiments at a slower pace. Further, the prices of feedstock Ethylene and upstream Naphtha and Crude oil are expected to influence the price trend for the product.