The Global Market Demonstrates Bearish R-HDPE Market Sentiments

The Global Market Demonstrates Bearish R-HDPE Market Sentiments

The Global Market Demonstrates Bearish R-HDPE Market Sentiments

  • 26-Jul-2022 5:25 PM
  • Journalist: Nicholas Seifield

The Recycled High-density Polyethylene (R-HDPE) price trends have followed the global market's volatile energy movement. The stagnant market growth has been attributed to a consistent inclination toward recycled plastics for sustainable products. The arbitrary development in energy costs, coupled with the generous availability of post-consumer bales and subdued demand from the downstream packaging sector, has offset the market outlook of R-HDPE in recent weeks.

In Germany, the R-HDPE price slightly declined on July 22nd by USD 20 per ton compared to the previous week's prices. The surplus availability of enough plastic scrap in the domestic market has pushed the R-HDPE offers to their existing values. On the upstream energy price front, the curbed Russian gas supplies and soaring prices of electricity and non-Russian gas have compelled the energy-intensive firms to scale back their production. Furthermore, the bearish virgin upstream HDPE markets amid the waning downstream demand from packaging and film industries have pressured the manufacturers' margins and have caused the buyers to shun recycled HDPE in the domestic region.

Furthermore, in the USA, the US dollar index has tumbled to its multi-year high values, prompting oil-importing countries to buy crude oil at lower prices at dollar-denominated prices. It prompted recession fears in the western markets, and global supply-demand concerns have weighed on crude oil price gains. The fluctuating energy values have significantly impacted the operational costs for recycled plastics. As a result, the spot offers for R-HDPE in the US market have observed a significant downfall of approximately 2.3% on July 22nd, 2022, compared to the prices observed in the first week of July.

As per ChemAnalyst, the price realizations of R-HDPE are likely to witness turbulent market growth in the near term. The uncertainties in terminal demand amid the growing recession fears in the European and US markets will provoke enough cost pressure on the market value of R-HDPE. In addition, the worldwide dwindling energy costs are further projected to significantly impact the manufacturing costs of recycled plastics, including R-HDPE, seeding the bearish market outlook in the forthcoming weeks.

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