The Global HDPE Market Remains Feeble Amid Bleak Demand and Adequate Stocks
- 09-Jan-2023 3:04 PM
- Journalist: Patrick Knight
Hamburg, Germany-The economic downturn in the European region and sufficient product availability brought about a bearish market trend for High-Density Polyethylene (HDPE). Purchasing volumes are still on the lower end after the sellers cut HDPE prices for the regional market. Additionally, feedstock Ethylene prices have also dropped after weak demand and low bidding for the new stocks. HDPE tightness in the European market has eased due to higher production rates among enterprises and declining product demand from the plastic and food packaging industries. With the week ending on 06th January 2023, the price of HDPE in Germany slipped to USD 1490/tonne (Raffia Grade) FD Hamburg with a weekly decline of 1.32%.
Market Players concurred that the Polyolefin market slow start with the start of the New Year as end businesses is still struggling with low order entries amid recession fears. Apart from that, slumping freight rates, piling stocks among the ports, and lower netbacks in Europe are the major factors for weak market fundamentals.
In the USA, the HDPE market ended on a bearish note this week due to lull market dynamics and declining product demand. HDPE production plants have been running at significantly lower rates for several months. The lower production schedule, widely observed among producers, has been designed to decrease upstream inventories, rebalance supply and demand, and ultimately return pricing power to sellers. With the week ending on 06th January 2023, the price of HDPE in the USA stabilizes at USD 1145/tonne (Film Grade) FOB Texas. The freezing temperature also affected the production rate of major enterprises with Polypropylene plant turnaround. On 22nd December 2022, during the freezing temperatures forecast in Cedar Bayou, Chevon Phillips Chemical shut down its Polyethylene (PE) units. Additionally, PE lines at the Pasadena plant were reported to undergo a turnaround toward mid-January 2023.
According to ChemAnalyst, the demand for HDPE in the European market will remain affected by slow market offtakes and a bearish demand outlook from the downstream plastic and food packaging industries. However, in the USA, with Arctic blasts and polar winds affecting the market trading activities in the region, the HDPE price trend is expected to improve with strong market fundamentals and higher bidding for new stocks. Recovering demand for the new stock and a feedstock Ethylene price surge will further support the price dynamics.