HDPE Price Elevates Across the Globe Due to Supply Shortages in February

Tight supplies resulted from plant turnarounds in the North America and APAC regions, as well as rising upstream Polyethylene prices in North America, resulting in an upward High-Density Polyethylene (HDPE) price trajectory in the global market in February 2023.

Asian HDPE prices surged on higher discussions during the week ending on February 10, 2023, due to tight supplies amidst plant shutdowns in South Korea and China at various sites. In China, maintenance shutdowns in Heilongjiang Haiguo Longyou at Daqing and Sinopec Yanshan Petrochemical at Beijiang reduced HDPE capacity from 33334 TPM and 9166 TPM to 0 TPM, respectively, in February 2023. Additionally, Lianyungang Petrochemical at Xuwei and Wanhua Chemical Group reduced product capacity from a total capacity of 33334 TPM and 29166 TPM to 0 TPM, respectively, this month. As per the latest insights, these plants will remain closed in February 2023, from February 1 to February 28, 2023, in China at various sites. On the other side, South Korean Hyundai Chemicals at Daesan reduced capacity to 0 TPM from a total capacity of 70833 TPM for 28 days in February 2023. These plant shutdowns diverted the buying interest of the market players across Asia to the Indian market, impacting the pricing dynamics of HDPE in India. On the demand side, the HDPE market witnessed a bullish market situation with firm inquiries in the automotive and construction sectors in February 2023. The primary factors observed leading to the current price trend of HDPE in February 2023 were tight supplies and limited production activities.

Furthermore, North American HDPE prices were also positive and supported by tight supplies and plant turnarounds in February 2023. The U.S. LyondellBasell Industries N.V. at Matagorda, Texas, reduced capacity to 11905 TPM from 41667 TPM due to force majeure amidst rising fear of inflationary input cost pressures and weak output in February 2023. Furthermore, Chevron Phillips Chemical in Pasadena, Texas, U.S., reduced HDPE capacity to 22143 from 77500 in February 2023 due to a maintenance shutdown, which led to a shortage of inventories and an increase in HDPE prices in the country's market.

According to ChemAnalyst, HDPE prices are expected to rise in the global market in February 2023, owing to supply chain disruptions and turnarounds in various regions and tightening inventory availability. Furthermore, an increase in upstream Polyethylene costs combined with expected limited stock availability might result in an upward price trend for HDPE.