HDPE Prices Continue to Ease in Asia Amid New Supplies and COVID Repercussions
- 27-May-2021 12:00 PM
- Journalist: Robert Hume
High Density Polyethylene (HDPE) prices in Asia dropped further as market participants are bracing the repercussions caused by the new wave of COVID in several economies. Demand in some sectors was noted healthy such as packaging and medical plastic due to changed consumer behaviour amidst increased cases of infection while some faced the brunt of market uncertainities
In China, the supplies of HDPE were seen lengthening due to the commissioning of two new Polyethylene (PE) facilities. China's Lianyungang Petrochemical (subsidiary of Zhejiang Satellite Petrochemical) and Huatai Shengfu's new 400 KTPA HDPE and 400 KTPA LLDPE/HDPE units have been the latest entrants into the Asian HDPE market in April 2021. Ex-works Jiangsu (China) price of HDPE Pipe grade slipped to USD 1339 per MT as of the week ending 21st May.
The news comes against the backdrop of Malaysia's Lotte Titan shutting its 220 KTPA high-density polyethylene (HDPE) swing unit starting July for maintenance related work for nearly a month. This shutdown is anticipated to reduce the regional HDPE supply in July.
A consistent downtrend in prices could be observed in India where processors have revealed that in the second wave of COVID, there have been less panic procurement with hovering uncertainties due to lockdowns in several states. As per traders, spot HDPE purchases have shown a dip after offered prices by India’s leading manufacturer Reliance Industries Ltd. (RIL) were negatively revised by USD 27.53 per tonne w.e.f. 20th May for almost all HDPE grades except raffia/monofilament grade.
Exports of the material to other regions including markets of Europe and North America has been obstructed by the limited availability of shipping containers and skyrocketing freight and container charges.
As per ChemAnalyst, ample supplies and pressured demand are likely to keep the Ethylene value chain under pressure in longer terms. HDPE prices are likely to slide down in the coming weeks looking at eroded PE margins. Besides, import demand is likely to weaken due to increasing country’s self-sufficiency for Ethylene. However, demand from the packaging and medical plastics sector may support the sentiments to some extent in the near term.