Weak Market Fundamentals Drop the Prices Of HDPE In The Global Market
- 12-Jul-2022 4:11 PM
- Journalist: Kim Chul Son
Houston, USA- The prices of HDPE declined in China on slow offtakes and were mainly accounted for by sluggish buying sentiments combined with weak upstream crude and ethylene sentiments. The fall in price is putting pressure on chemical producers with affected revenue and sales of their downstream products. As an economic slowdown has accumulated, the spot price of HDPE has also slipped with weak market sentiments. China’s demand for Polyethylene is still growing, but the rate of increase has dropped over the past few weeks. With the week ending on 8th July, the price of HDPE in China slipped to USD 1390/ton (Raffia Grade) FOB Dalian.
In the European market, settling prices of raw materials Ethylene and Naphtha resulted in bearish market fundamentals. The HDPE market is sufficiently well supplied with the product to meet the low-level demand.
In the USA, spot monomer market participants were few during the holiday week, which brought low volume and even lower prices for feedstock Ethylene prices. HDPE prices surrendered another penny as traders sought further discounts amid growing domestic stockpiles and declining feedstock monomer prices. While demand remains weak, the manufacturing units continue to act cautiously with purchases and prioritize reducing inventories as the trajectory of the US economy remains uncertain. With the week ending on 8th July, the price of HDPE in the USA slipped to USD 1725/ton (Blow molding Grade) FOB Texas.
According to ChemAnalyst, the price of HDPE will slip further due to deterred market and sluggish purchasing in the domestic market. The European HDPE market will likely extend losses due to fluctuations in feedstock ethylene prices impacting the polyolefin market. On the demand front, the food packaging sector will perform relatively better than the other industries amid summer tourism, increasing consumption and accelerating the sales and revenue among the producers. The prices of HDPE have further room to drop, citing the wide gap between feedstock ethylene and High-density polyethylene (HDPE).