High seasonal demand uplift Asia High Density Polyethylene prices in May 2022
- 06-May-2022 6:42 PM
- Journalist: Jung Hoon
MUMBAI (ChemAnalyst)-Even as Plastics manufacturers in the Asia Pacific region have been witnessing a demand deficit due to the unending lockdowns and strict quarantine protocols amidst the pandemic, demand for High Density Polyethylene – Blow moulding grade (HDPE BM) had seen a steady rise due to the onset of summer season in the northern hemisphere when the bottling industry usually witnesses a sudden surge in demand. Feedstock Ethylene monomer prices have been on a surge in North America as natural gas prices breached the USD 8/MMBtu mark in the first week of May in response to the unquenchable demand for Liquified Natural Gas (LNG) from Europe and Southeast Asia.
The northeast Asian region had thus far been witnessing a supply crunch in the monomer market owing to the continued tight supply of crude oil as well as higher import prices from the US. The demand for plastics has however been severely impacted by the disruption in the global supply chains through out the month of April. Most manufacturers in the South Asian and East Asian regions have either revised their May offers on HDPE lower or have rolled over the prices except for the Blow Moulding grade whose demand witnesses a surge from the bottling industry with the onset of summer in the northern hemisphere.
In India, Reliance Industries Limited had revised the prices of HDPE Blow Moulding grades higher by INR 1500/MT with effect from 1st May 2022 expecting a demand surge from the downstream blow moulders. In South Korea LG Chem and Hanwha petrochemicals have rolled over prices for their May offers despite persisting feedstock cost pressure and tight supply of monomer due to the demand vacuum created in the Chinese market caused by the lock downs imposed in major industrial and commercial hubs. With crude oil prices expected to rise further in the coming weeks as forecast by the ChemAnalyst market Intelligence Unit taking into consideration a further disruption in global supply chains which could force the Oil producing countries to lag behind in their production targets for May, manufacturers in the Asia Pacific region are likely to roll over prices for most grades of HDPE barring Blow Moulding despite sluggish demand fundamentals.