HDPE Market is Likely to Perform Satisfactorily in Asia Owing to the Tight Supplies
- 24-Mar-2023 2:04 PM
- Journalist: Harold Finch
High-Density Polyethylene (HDPE) market witnessed bullish sentiments in the APAC region. Tight supplies and high upstream Polyethylene (PE) costs led to an upward trend for HDPE prices in mid-March 2023. The HDPE market in Asia is currently facing tight supply conditions due to insufficient production capacity and plant shutdowns. Moreover, the growing demand from the packaging industry also supported the HDPE final discussions this month.
The HDPE market in Southeast Asia is experiencing modest growth, driven by a slow increase in demand from the packaging and consumer goods sectors. Meanwhile, several new HDPE production facilities are being planned or constructed in Asia and the Middle East. These investments aim to meet growing demand and capture the opportunities presented by higher-value products.
HDPE producers are focusing on higher-value products, such as specialty grades, which offer improved properties such as higher stiffness, improved impact resistance, and better processability. This shift in demand is expected to impact the HDPE market as the downstream sustainable packaging industry seeks to differentiate itself and capture more value.
On the supply side, Plant shutdowns, including maintenance shutdowns at Hyundai Chemicals in South Korea and Heilongjiang Haigo Longyou in China, have significantly affected the domestic supplies for HDPE in March 2023 in the Asian market. Hyundai Chemicals reduced the active capacity to 36559 TPM from the total capacity of 70833 TPM at Daesan (South Korea) for the first 15 days of March 2023, and Heilongjiang Haiguo Longyou reduced the active capacity to 0 TPM from the total capacity of 33334 TPM throughout March 2023 under maintenance shutdowns.
As per ChemAnalyst, the HDPE market is expected to remain upward in the Asian market, owing to the reviving economy and supply tightness. The downstream demand from the packaging and construction industry is likely to gain growth due to limited stocks and escalating domestic consumption in April 2023.