Weak Feedstock Market Fundamentals Depress the Global HDPE Prices

Hamburg, Germany- In the European Petrochemical market, commodity resin trade activity kept up with its average pace as pricing continued its stabilization pattern this week. Impacted demand fundamentals continue to weigh on the feedstock Polyethylene markets, as do proceeded with regional economic concerns, which stay uncertain.

With the week ending on 26th August, the price of HDPE in Germany rolled over to USD 1640/ton (Raffia Grade) FD Hamburg. Purchasers are hesitating to make enormous buys, and the overall slack demand furnishes buyers with leverage to push for lower costs. Additionally, the drop in spot levels comes as producers stay constrained to clear out stocks as storage costs rise and feedstock ethylene cost oscillates.

When we look at the US HDPE market, supply increment, weaker demand, and an underwhelming hurricane season have dampened any opportunity for producers to increase prices in August. In terms of the upstream Ethylene market, fluctuations in crude and Naphtha values further supported the downtrend of the regional cost of HDPE. Downstream Plastic and food packaging industries were operating cautiously according to the end user's requirements.

Weak market sentiments, on top of sufficient product availability, capped the production units to manufacture the HDPE further. In Saudi Arabia, the prices have shown a slight rebound, and a cautious uptick has propped up markets in buying interest and the relatively reduced availability of Olefin. Participation in the monomer markets remained healthy, but completed volumes were relatively low. Ethylene found additional support and racked up gains while Propylene prices dipped.

According to ChemAnalyst, the price of HDPE will depress further due to sufficient supply and muted market fundamentals. In the US market, sliding feedstock ethylene prices and surging production rates among the manufacturing units will affect the global polyolefin market. Energy futures mixed as Crude Oil futures came back down amid recession fears, while Natural Gas continued to rise on the back of solid power generation demand.