HDPE Price Rises as US Market Recovers Amidst Global Challenges
HDPE Price Rises as US Market Recovers Amidst Global Challenges

HDPE Price Rises as US Market Recovers Amidst Global Challenges

  • 19-Mar-2024 5:17 PM
  • Journalist: Francis Stokes

During the initial week of March 2024, High-Density Polyethylene (HDPE) prices in the USA experienced a notable uptick, rising by 1.8%. The USA is witnessing a significant surge in HDPE prices amidst robust trading activity, driven by factors including strong demand from the domestic as well as overseas markets, escalating feedstock costs, and favorable business sentiment. The resilience of the industry amidst global challenges reflects a promising outlook for HDPE in the US market, underlining its increased demand from the downstream construction, automotive, and packaging industries.

The upward price trajectory of HDPE was propelled by robust trading activity. Railcar deals were swiftly secured by midweek, with higher asking prices replacing initial offers as March commenced. The domestic availability of HDPE remained moderate as producers diverted more pounds toward the export market, prompting buyers to adopt a proactive approach to resin procurement. Demand for HDPE from South America, especially Mexico, remained robust as local traders sought reliable supply from North America amidst shipping delays and escalating costs from Middle Eastern and Asian regions. Resellers, in response to the market rally, depleted their inventories for most commodities grades including HDPE, exercising caution in restocking amidst uncertain market conditions. Certain resins witnessed tight availability, signaling constrained supplies. Further, the escalating cost of feedstock Ethylene, driven by surging upstream Naphtha and Crude oil prices in the USA, has fueled the upward price trajectory of HDPE. Despite supply levels remaining moderate and operational rates consistent, trader inventories were relatively thin, resulting in a slight increase in average HDPE costs for the week.

Against the backdrop of these market dynamics, global ocean freight rates have been witnessing a decrease after skyrocketing in January, alleviating some concerns despite the persistent Red Sea crisis. Carriers seem to have adapted to the new normal, with the announcement of increased daily slots by the Panama Canal Authority further easing worries. This upturn was complemented by a renewed increase in output, contributing to a positive outlook for the industry.

Moreover, the manufacturing activities for February 2024 depicted a rise in production levels, with previous supply chain delays alleviating and demand conditions strengthening once again. The surge in construction activities and positive business sentiment have propelled overall economic activity in the US, with companies reporting robust growth in new orders for goods and services, fostering optimism and confidence in future business prospects. This growth in February continued its impact in the initial week of March as the construction industry remained healthy leading to rising HDPE demand.

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