For the Quarter Ending March 2024
North America
The first quarter of 2024 has witnessed a significant increase in High-Density Polyethylene (HDPE) prices in the North American region. Several factors have contributed to this upward trend. The market has experienced robust demand from various sectors, including construction and packaging, driving prices higher.
Further, logistical challenges and disruptions in shipping routes have led to supply chain disruptions, exacerbating the price increase. The cost of imported materials has also played a role, with higher prices for feedstock Ethylene impacting the overall cost of HDPE. Mexico has seen the maximum price changes within the region. The market in Mexico has remained stable, with consistent demand from the downstream construction industry. However, the cost of imported material from the USA has led to price escalation in the domestic market.
The price of HDPE in Mexico has increased by 8% compared to the previous quarter in 2024. There has also been a 6% price increase between the first and second half of the quarter. Overall, the pricing environment for HDPE in the North American region has been positive, with increasing market dynamics and strong demand driving prices higher.
APAC
During the first quarter of 2024, the APAC region witnessed an overall increasing trend except for China which showed fluctuations over the period. The Asian HDPE market experienced an upward trajectory in prices, primarily attributed to heightened expenses in feedstock Ethylene and increased demand. Ethylene costs surged directly impacting HDPE production expenses, while elevated prices of upstream Naphtha further compounded the cost pressures. Further, fluctuations in Crude oil prices were observed, particularly during the Spring Festival period, influenced by geopolitical tensions in the Middle East and anticipated production cuts by oil-producing nations. Subsequently demand from the Chinese market witnessed an uptick by the end of the quarter, especially in downstream sectors such as construction and automotive, despite a prior downturn in construction demand noted in February. Furthermore, in Japan, the prices of HDPE showed a positive trend, experiencing a surge of 5% by the end of the quarter. This upward movement in prices can be attributed to several factors, including an improved economic outlook, increased infrastructure projects, and a steady rise in consumer demand.
Europe
High-Density Polyethylene (HDPE) pricing in the Europe region for Q1 2024 has experienced an overall increasing trend. The quarter has been characterized by significant factors that have influenced market prices. These factors include supply chain disruptions, rising freight rates, and challenges in the Red Sea region. These disruptions have led to constraints in supply and delays in shipping, impacting the availability of HDPE material in the market. The overall trend in the UK has been positive, with prices increasing by 5% compared to the previous quarter. This is in line with the overall trend in Europe, where prices have also increased by 5% during the same period. When compared to the same quarter last year, HDPE prices have seen a decline of 10%. However, the recent price increase indicates a positive shift in the pricing environment. The quarter has also witnessed a price comparison between the first and second half, with prices remaining stable during this period. This further indicates the overall stability and positive sentiment in the HDPE pricing environment. The latest quarter-ending price for HDPE Injection grade FD West Yorkshire in the UK surged by 5%. This reflects the increasing trend in prices during the quarter and confirms the positive pricing environment for HDPE in Germany.
MEA
During Q1 2024, the High-Density Polyethylene (HDPE) market in the MEA region experienced an overall increase in prices, however, witnessed a decline in January and the n surged for the rest of the quarter. The market was influenced by several significant factors, including rising costs of feedstock Ethylene and upstream Naphtha, as well as strong global market conditions and stable demand from downstream packaging and construction sectors. These factors contributed to a positive trend in product prices. The Middle Eastern countries saw a 7% increase in prices compared to the same quarter last year. Additionally, there was a 7% increase in prices from the previous quarter in 2024. Overall, the pricing environment for HDPE in the MEA region during Q1 2024 has been positive, with prices consistently increasing. The quarter-ending price in the UAE surged by 5% for HDPE Injection Molding FOB Jebel Ali.
These price increases reflect the strong demand for HDPE from domestic and international markets, as well as the impact of rising feedstock costs and favorable global market conditions. The market is expected to continue its positive trend in the coming quarters.
South America
The first quarter of 2024 has witnessed a significant increase in High-Density Polyethylene (HDPE) prices in the South American region. Several factors have contributed to this upward trend. The market has experienced robust demand from various sectors, including construction and packaging, driving prices higher. Further, logistical challenges and disruptions in shipping routes have led to supply chain disruptions, exacerbating the price increase. The cost of imported materials has also played a role, with higher prices for feedstock Ethylene impacting the overall cost of HDPE. Brazil has seen the maximum price changes within the region. The market in Brazil has remained stable, with consistent demand from the downstream construction sector. However, the cost of imported materials has led to price escalation in the domestic market. Consequently, the price of HDPE in Brazil increased by 3% for Film grade CFR Santos by the quarter end. Overall, the pricing environment for HDPE in the South American region has been positive, with increasing market dynamics and strong demand driving prices higher.
For the Quarter Ending December 2023
North America
During the fourth quarter of 2023, the HDPE prices in North America showed fluctuation as the prices initially surged in October 2023.
However, a depreciation in the HDPE market was observed by the end of the quarter and the price was quoted as USD 1217/MT for HDPE Blow Molding grade CFR Veracruz (Mexico). In the first month of the quarter, the price elevation was the impact of increased feedstock Ethylene prices along with healthy demand from the downstream construction, packaging, and automotive industries.
During November and December, the price of the product witnessed a downward trend in North America amid declining upstream Naphtha and Crude oil and subdued demand in the global market. The demand from the domestic market remained steady while the export demand from the Asian traders has decreased, inquiries from Latin America, and Europe continue to flow, although with reduced amounts.
In November, export offers started to emerge, and some producers adjusted their prices downward to align with the softer international sentiment, which has likely been influenced by the declining Crude Oil prices. Furthermore, supply disruptions have been observed due to low water levels in the Panama Canal which has caused restrictions on the number of ships crossing the Canal.
APAC
In the fourth quarter of the year 2023, the Asia-Pacific region followed a mixed trend as the Indian and Chinese markets initially declined, however, rebounded in December. On the other hand, Singapore, South Korea, and Japanese markets witnessed a declining trajectory in this quarter. The market remained moderately bullish in India, while Singapore and South Korea experienced bearish conditions due to sluggish demand from the domestic market and weaker prices of imported materials. However, Japan had the most changes in HDPE prices due to a tightening supply of light grades caused by refinery maintenance activities in the Middle East and reduced trade inflows, leading to an increase in prices. The fluctuation in the feedstock Ethylene costs also contributed to the HDPE prices. The market also experienced a slight operational adjustment characterized by a decline in international Crude oil prices and diminishing support for the product on the cost side. Thus, the quarter ended with the price of HDPE quoted as USD 944/MT Blow Molding grade FOB Tokyo (Japan). A plant shutdown was reported as Lianyungang Petrochemical shut its HDPE unit for maintenance turnaround in mid-November till December 2023. The plant is located in China and has a plant capacity of 400,000mt/year.
Europe
Throughout Q4, the European HDPE market showed a pessimistic demand outlook, however, October inclined while declining for the rest of the quarter. A significant hike has been observed in the European PE market during October on the back of limited imports from Asia and the Middle East. As per the market sources, European PE producers have been facing huge cost pressure for a long time, while the demand fundamentals have been low, causing damage to their profitability. Therefore, market participants have revealed that PE manufacturers have started eyeing a further price increment. By the end of the quarter in November and December, the market witnessed a decline in prices in the UK, primarily due to subdued demand in the downstream packaging and construction industries. The top three factors that affected the market were the lackluster economic conditions, high supplies of the product, and low demand from downstream sectors. The price of HDPE Injection FD West Yorkshire in the UK at the end of the quarter was USD 1248/MT. The expected surge in upstream Naphtha prices may cause cost pressures on production expenses, while a decline in the feedstock Ethylene prices may drop the prices of HDPE.
MEA
In the final quarter of 2023 in Middle Eastern nations, the HDPE market witnessed an initial increase followed by a slight decrease, indicating a situation that was stable by the end of the quarter. The rise in prices during October was driven by sustained demand from downstream sectors, particularly packaging and construction, which helped raise prices despite a decline in feedstock Ethylene and upstream Naphtha prices. Middle-Eastern HDPE market displayed a moderate scenario with a consistent supply from both domestic and international sources. However, inflationary pressures impacted consumer sentiments, resulting in a reduction in domestic market demand. As the quarter concluded, HDPE prices experienced a marginal decline due to the easing of feedstock Ethylene and Crude oil costs, leading to a decrease in production expenses. Additionally, bearish demand sentiments from the Asian and European markets contributed to the downshift in prices. Consequently, the quarter-ending price of HDPE Injection Molding FOB Jebel Ali in the UAE was quoted as USD 1038/MT.
South America
Throughout Q4 of 2023, the HDPE prices in South America remained bearish amid lackluster demand from the domestic market. During this period, the HDPE market observed a decrease in prices primarily attributed to sluggish demand from the downstream construction and automotive sectors in the region. The decline was further influenced by a drop in the costs of the feedstock Ethylene, impacted by the pessimistic market situation during the same period. Further, the upstream Naphtha costs decreased due to the decline in Crude oil prices, alleviating cost pressures in HDPE production. The affordability of imported materials from the USA also contributed to the overall low costs in the domestic market. Moreover, as 2023 approached its conclusion, Brazil's manufacturing industry continued to experience contraction. The output and new orders saw a decline for the third consecutive month, leading to a reduction in input buying as companies prioritized utilization over adding to inventories. Thus, the price of HDPE by the end of the quarter in Brazil was quoted as USD 1078/MT for Blow Molding grade CFR Santos.
For the Quarter Ending September 2023
North America
HDPE prices showed a mixed trend in Q3 owing to the price movement of feedstock Ethylene and the market dynamics in North America. Initially, in July, the prices declined as the cost pressure from the feedstock Ethylene was limited as its prices progressed downward due to declining upstream Naphtha prices. Further, the high inflationary pressures and increased interest rates have impacted the purchasing activities of consumers, which has impacted the inquiries from downstream packaging and construction industries. However, for the later part of the quarter, the prices increased by 2% for Blowmolding grade CFR Veracruz (Mexico) and remained stable by the end of Q3. The HDPE market witnessed a significant uptick in activity due to increased demand driven by additional production challenges. This surge in price was further fueled by rising Crude oil prices and escalating costs of feedstock Ethylene. Further, Nova Chemicals had to declare Force Majeure on September 14, 2023, for HDPE and LDPE resins produced at their facilities in Ontario, Canada. This decision was made because of an unexpected shutdown at their Corunna Cracker plant, which supplies Ethylene to the Moore and St. Clair sites. While there was an improvement in product trading, domestic sales still fell short of the usual standards. Even when comparing September 2023 to previous years, the performance remained lackluster, a sentiment shared by most distributors and resellers in the industry.
APAC
During Q3, the HDPE market in the Asia-Pacific region experienced varied sentiments as the prices initially declined. However, by the end of the quarter, the HDPE saw a surge as the Film grade CFR Jurong (Singapore) inclined by 1% in September 2023. In July, the price decline of HDPE witnessed a downward trend this week, primarily attributed to a combination of sluggish demand and surplus availability of the product. The slowdown in the economy has led to lackluster demand from the downstream packaging, construction, and automotive industries. The prices inclined in August and September, and this uptick in prices was closely linked to the rise in the cost of its feedstock Ethylene, which was driven by increased prices of upstream Naphtha and Crude oil. The factor influencing this price trend was the enhanced demand for HDPE in the domestic market amid the coming festival season in India and China and increased industrial activities. Further, the stable inventory levels within the region contributed to bullish sentiment in the market, implying that the HDPE sector may continue to experience upward momentum in the near term.
Europe
In Q3 2023, the European HDPE market saw price fluctuations due to weakened demand. Initially, prices fell in the first two months but later rebounded by the end of the quarter, with a 2% increase in HDPE Injection grade FD West Yorkshire (UK) prices in September. HDPE prices in Europe are declining as feedstock Ethylene prices remain low, attributed to lackluster demand during the summer holidays in downstream industries. Several factors have contributed to this decreased demand, including reduced consumer spending due to high living expenses and unfavorable macroeconomic conditions such as inflation and high interest rates. Further, fewer infrastructure projects have worsened the demand slump. The ongoing economic slowdown significantly contributes to deteriorating market conditions in the region. However, price increases at the end of the quarter were primarily due to reduced material supplies resulting from lower production rates at regional plants and limited imports from foreign suppliers. Steady demand from the downstream packaging sector also supported these price gains. Despite this, producers remain cautious about future demand, anticipating no significant improvement in the near to medium term. Consequently, they are hesitant to accumulate excess inventory, leading to reduced plant production rates.
MEA
The HDPE market showed a mixed market trend in the third quarter of 2023 amidst varied purchasing sentiments from the downstream market in the regional and overseas Asian markets. In July, the price of HDPE fell in Saudi Arabia due to persistent sluggish demand from the downstream packaging and construction industries. The falling prices of upstream Ethylene have further supported the downward price trend for the product. The inflation rates have weakened the purchasing confidence of domestic buyers. Demand for Saudi Arabia’s HDPE in Asian nations, particularly India and China, has been low due to current market conditions. However, the HDPE prices surged in the last two months with an overall inclination of 5% in September for Injection grade FOB Al Jubail (Saudi Arabia). This increment in the prices can be attributed to the surge in feedstock Ethylene prices due to a consistent rise in the upstream Naphtha and Crude oil prices. The demand from the downstream automotive and construction industries has been steady as inflation has eased in August from the previous month, leading to healthy consumer buying sentiments. Further, the demand for Saudi Arabian HDPE from the Asian market has been healthy, which has supported the upward price trajectory of HDPE.
South America
HDPE prices showed a mixed trend in Q3 owing to the price movement of feedstock Ethylene and the market dynamics in South America. The price trend for HDPE remained bearish in Brazil in July 2023 as the cost pressure from the feedstock Ethylene was limited as its prices progressed downward due to declining upstream Naphtha, as reported by the market participants. Further, the high inflationary pressures and increased interest rates have impacted the purchasing activities of consumers, which led to reduced downstream demand from the construction, packaging, and automotive sectors. In August, the demand for the product was firm as buyers made purchases intended as a precaution during hurricane season. Despite storms affecting the Pacific, Atlantic, and Caribbean regions, production was not impacted. The demand for the product remained high in the automotive sector as car production rose in August. Further, the HDPE prices in Brazil climbed by 2% during September on the back of expensive imports from the USA amidst moderate to stable demand from the domestic market. As per the data, rising Crude oil value parallelly affected the price trend of the product in the South American market.
For the Quarter Ending June 2023
North America
The HDPE market has shown a downward trend throughout Q2 in North America as the demand from downstream packaging and construction industries has been observed to be sluggish. The ample product availability in the market has kept the prices low. Further, the primary reason for unhealthy buying conditions has been the slowdown in the economic conditions post the US banking crisis and persistent inflation with fluctuating market dynamics. Furthermore, upstream Ethylene has also shown a downward trajectory which influenced HDPE prices. The price of HDPE in Mexico in April 2023 was recorded to be USD 1393/MT Blowmolding CFR Veracruz, with a decline of 1%. Similarly, a price decline of 3% and 5% was seen in May and June, respectively, as the prices for HDPE in May reached USD 1349/MT and USD 1284/MT Blowmolding grade CFR Veracruz in June. Furthermore, a plant shut down for feedstock Ethylene was reported as Chevron Philips Chemical, located in Cedar Bayou, Texas, in the USA, had an unplanned shutdown on 14th June 2023. The plant has a capacity of 1.7235 million mt/year. However, the product's price did not report any major impact of plant shutdown.
APAC
The surplus availability of HDPE with subdued demand from downstream packaging and construction industries has led the prices to decline in the Asia- Pacific region in Q2 in 2023. The upstream Ethylene and Crude oil decreased prices have further contributed to the slump in prices of HDPE. Furthermore, the reduced demand was seen on account of the economic downturn in the global market caused due to Russia- Ukraine war and weaker market growth in China post-lockdown restrictions. The HDPE Film grade CFR Jurong prices in Singapore were reported to be USD 1075/MT in April, USD 1065/MT in May, and USD 1011/MT in June. Moreover, three HDPE plant shutdowns were reported in China. Lianyungang Petrochemical, located in Xuwei in China, with a 400,000 mt/year plant capacity, was shut down on 16th June 2023 for a maintenance turnaround. Another HDPE plant, Sinopec Zhenhai Refining and Chemical (ZRCC) in Ningbo (China), with a plant capacity of 300,000 mt/year, was shut down for maintenance turnaround from March 2023 to early June 2023. HDPE plant PetroChina Daqing in China, with a 550,000 mt/year plant capacity, was shut down on 10th June 2023 for 45 days.
Europe
During the second quarter of the year 2023, HDPE prices witnessed bearish market sentiments in the European nations. The primary driver for the decline was the lackluster demand from downstream construction industries. The Russia-Ukraine war and global economic tensions have led to a decline in the economy resulting in inflation. Further, the decreasing prices of upstream Ethylene and Crude oil have influenced the prices of HDPE. The HDPE prices in the UK fell from USD 1460/MT in April to USD 1397/MT for Injection Molding FD West Yorkshire. The upstream Ethylene plant shutdown was reported in Germany. BASF plant was shut down for two weeks on 9th June 2023 for a maintenance turnaround. The plant is located in Ludwigshafen in, Germany, and has a plant capacity of 620,000 mt/year. The inflation rate in the Euro area, as per Eurostat, has been 7.0% in April, 6.1% in May, and estimated to be 5.5% in June with respect to the same month in the previous year. Although inflation rates declined, the recession affected the economy and market dynamics.
MEA
The Middle East Asia region witnessed a drop in HDPE prices in Q2 of 2023. The major reason that caused a drop in HDPE price movement was the adequate availability of the stock amidst stagnancy in the production costs coupled with ease in the Crude oil prices. Further, geopolitical uncertainties have placed pressure on the global demand for HDPE from downstream packaging and construction industries in Middle East countries. Furthermore, the upstream Ethylene prices have been declining throughout the second quarter. Injection grade FOB Al Jubail prices in Saudi Arabia were quoted as USD 1024/mt in April, USD 998/mt in May, and USD 962/mt in June. A similar declining price trend was seen in UAE, where the HDPE Injection molding grade FOB Al Jubail prices were recorded as USD 986/mt in April, USD 968/mt in May, and USD 937/mt in June. HDPE plant shutdown was reported as Sabica Petrokemya was shut down from early May 2023 to Early June 2023 for a maintenance turnaround. The plant is located in Saudi Arabia and has a 400,000 mt/year capacity.
For the Quarter Ending March 2023
North America
The HDPE prices are the result of limited stock availability in the US market during the quarter ending March 2023. The price of HDPE maintained an upward price trend in March 2023, owing to gradually growing consumer confidence in the domestic construction sector and other competitive industries in the United States. The crippled stock availability in warehouses towards the conclusion of Q1 2023 as Formosa Plastics chose a maintenance shutdown in mid-March 2023 this month. Meanwhile, foreign HDPE queries increased, influencing commodity price movement in the face of supply tightness. Moreover, the steep rise in crude oil prices in the global market also elevated the input cost pressure on the enterprises at the termination of March, lifting the HDPE prices in the US market.
APAC
The HDPE prices have not witnessed a significant change in the first quarter of 2023 due to the slowness in the downstream construction and packaging industry demand in the quarter ending March 2023 and limited stock availability. In China, Heilongjiang Haiguo Longyou at Daqing and Sinopec Yanshan Petrochemical at Beijiang of China underwent a maintenance shutdown in the mid-Q1 and affected the production capacity of HDPE this quarter. On the other side, with a surge in crude oil prices at the termination of Q1 of 2023, the HDPE market felt supply tightness and elevated the commodity prices to pass the cost pressure to the consumers in the Asian market. Conclusively, the reduction in the demand-supply gap caused overall stagnancy in the price trend of the Asian HDPE throughout the quarter.
Europe
The German HDPE price trend continued to fall in the March 2023 quarter, with recent price declines in March 2023. Prices dropped in Germany as a result of weak demand from the downstream construction sector and a declining property market in the region. The surge in interest rates, combined with the cost-of-living crisis, put HDPE consumers in financial difficulty. High inflation, paired with slow economic growth, restricted trading activity to basic needs only in the European region. Furthermore, market participants maintained a negative price momentum in the first quarter due to weak demand fundamentals and muted global spot activity in the face of competitive market conditions and large stock levels.
For the Quarter Ending December 2022
North America
In Q4 2022, the price of HDPE in the US declined in the succeeding months with limited trading activities and lower product bidding. With the weakening buying activity in the regional markets, trading sentiment remained low. The HDPE spot prices also remain feeble, with lower bidding for the new stock and limited trading activities. Resin plants continued to operate at heavily reduced rates, fearing oversupplies and weak market fundamentals. Activity scaled back significantly in the monomer markets, participation was lacking, and volume was below average as prices moved lower. In Dec, the price of HDPE in the US declined to USD 1282/ton (Blowmolding Grade) FOB Texas.
Asia Pacific
In Q4 2022, the HDPE cost declined with weak market fundamentals and supply exceeding demand. However, towards the end of the quarter, the price gained the stance due to an uptick in trading activities. China's HDPE market faced uncertainty, with sluggish demand seen lingering in the market dynamics. China has observed elevated interest rate hikes due to inflation, which have suppressed domestic HDPE demand. In Dec, the price of HDPE in China was USD 1241/ton (Raffia Grade) FOB Dalian. HDPE demand softened amid economic concerns and high energy costs that forced producers to cutbacks. The demand for HDPE from the downstream plastic and food packaging industry remains lower with moderately operating downstream enterprises.
Europe
This quarter, the HDPE market surged with an uptick in trading activities and an improvement in demand from downstream ventures. In Oct, the price of HDPE in Germany surged to USD 1576/ton (Blow Molding Grade) FD Hamburg. Continuous utilization of HDPE inventories and accelerating trading activities gave a boost to the prices. The region's polymer market has been further rattled by the high cost of energy and utilities. The supply position remains firm with the consumption of cargoes from the downstream requirement. Regional HDPE prices have mostly retraced gains with higher spot prices and gradual improvement in downstream market fundamentals.
For the Quarter Ending September 2022
North America
Taking support from the weak market fundamentals and sufficient product availability in the US, the price of HDPE remained on the lower end throughout the quarter of 3rd 2022. In July, the US HDPE cost slipped to USD 1709/ton (Blow molding grade) FOB Texas. The increase in supply, weaker demand, and an underwhelming hurricane season has dampened any opportunity for producers to increase prices in this quarter. Regarding the upstream ethylene market, fluctuations in crude price supported the downtrend of the regional market. Downstream plastic and food packaging industries were operating cautiously per the end user's requirements.
Asia Pacific region
In Q3 2022, the HDPE market in Asia traded weakly, with sufficient product availability in the region. Polyolefin producers are pressured to clear out inventory ahead of increasing storage prices. China had seen its lowest HDPE offers from the USA due to oversupplies and weak purchasing appetite. Feedstock Polyethylene market pricing continued to bullish gradually, but due to logistics constraints and delayed shipments, major olefin producers decided to lower the production rate. Exports across Northeast Asia, from South Korea to China, were maintained with increased cracker and PDH plant rate cuts. Given the continuous demand slump, regional producers have no option yet to reduce racker and PDH plant operating rates to reduce production losses. In Sept, the price of HDPE in China slipped to USD 1290/ton (Raffia Grade) FOB Dalian.
Europe
The European HDPE market was sufficiently well supplied to meet the low-level demand for the product. The demand was disappointing as manufacturers were ordered to cover their intermediate needs due to economic uncertainty and weak market sentiments. Downstream plastic and packaging industries also remain affected due to low purchasing appetite and a bearish trading environment. In Germany, the price of HDPE during Sept slipped to USD 1552/ton (Raffia Grade) FD Hamburg. Due to oversupplies of HDPE, spot prices in Germany have started to lose their premium offers across European markets. Purchasers were hesitant to make bulk purchases, and the overall slack demand furnishes buyers with leverage to push for lower costs.
For the Quarter Ending June 2022
North America
In Q2 2022, the prices of HDPE surged in April on the back of strong demand and tight supply. Exporter warehouses along the gulf coast in the Texas region stockpiled inventories due to congestion at the container terminals, but strong demand surged the prices. However, in May and June, the market fundamentals remained weak with a slow purchasing appetite. Domestic and international market demand has slowed down, further releasing the demand pressure from the resin market. Lockdowns in China have worsened the export demand for US resins while strengthening supply chains has resulted in the bearish trend in the domestic market. In the spot market, railcar availability has increased while off-grade discounts steepened in the latest assessment.
Asia Pacific region
The price of HDPE in the Asia Pacific region fluctuated with mixed market sentiments where the prices surged in April and slipped in the remaining two months. In addition, due to the off-season, the terminal demand weakened towards the first week of June. The downstream factories maintained on-demand replenishment, and China's market trading atmosphere has improved post covid. Moreover, the petrochemical inventory was abundant, and thus overall market dynamics-maintained stability. Persistent lackluster demand trends in the region pulled prices lower. The price drop was further triggered by ample product availability and lower import offers from overseas producers.
Europe
In Q2 2022, the prices of HDPE surged in April, followed by a downtrend in the following two months. Even though Polymer prices have been on an uptrend since the Russo-Ukrainian war escalated, HDPE prices kept declining throughout May and June. The prime factor behind this consistent fall was wavering demand for the product from the domestic market amidst ample availability. As per the market sources, prices have already been floating at sealing. Thus, the domestic players anticipated only a decline or stability during May. However, concerns over crude oil and natural gas remained a center of concern for regional players as the ongoing Russo-Ukrainian war intensified only, which disrupted the region's supply chain.
For the Quarter Ending March 2022
North America
The US HDPE market was bullish throughout Q1 of 2022 with periods of stagnant demand especially in the month of January. The cost push by ExxonMobil, LyondellBasell and other domestic producers came about as a reaction to the sudden surge in feedstock ethylene monomer prices. A mishap at ExxonMobil’s Baytown facility in late December led to a significant amount of Ethylene capacity going offline in the first couple of weeks of January. There was a further cost push of around USD 0.04/lb by producers in the month of February encouraged by a surge in crude oil prices, which shot up to seven-year highs by the last week of January. The contemplated cost push of USD 0.07/lb had been only partially implemented as more capacity had come online in the first quarter including a SABIC-ExxonMobil joint venture with a capacity of 1.3 million ton per annum of Polyethylene production that had improved the supply fundamentals forcing market players to rethink their raise on offers.
Europe
The HDPE market in Europe had a similar trend in the first half of Q1 as that of the US. Starting late February, with the onset of war in eastern Europe and the consequent energy crisis that plagued Europe for much of the month of March, supply had taken a hit due to cost pressure from Ethylene prices. Prices of Ethylene in Europe have increased by 32% during the period 25th February 22 to 18th March 22. The benchmark CIF ARA price of Ethylene was assessed at USD 1640/MT on the 18th of March. The supply shortage in the feedstock market is, however, expected to ease up in the second quarter and thus diffuse the cost pressure on the HDPE prices. Supply of HDPE Blow Moulding grade continues to be tight while the demand from down stream moulding market is strong. Injection Moulding prices had only seen modest raises due to a healthy demand-supply equation. The Dutch TTF futures prices are expected to end up in contango as we expect an increase in supply of LNG from the US and the middle east to Europe. This means a normal energy situation for Europe prompting producers to be conservative in their approach to price raise for the month of April.
Asia Pacific
The HDPE market in the Asia Pacific witnessed an inconsistent price trend during Q1 as demand in the East Asian region took a slump during the Chinese lunar new year holidays. Production was also cut due to surge in COVID cases as well as the Chinese government’s winter air pollution control norms leading to hike in prices since the last week of February. Spot HDPE prices fluctuated in the month of March as feedstock prices saw major fluctuations in tandem with fluctuations in the crude oil market. Indian domestic producers have been consistently raising their contract prices since the 20th of January, with an average increase of USD 138 (INR 10500) in the month of March. Indian domestic supply could be hit in the month of April due to ONGCs planned turn around at their Gujarat facility which could bring down domestic capacity of HDPE.
For the Quarter Ending December 2021
North America
As a result of supply tightness faced during the period post deep freeze in USA, exports had been diverted form Northeast Asia to Europe and the domestic market as a conscious decision to maintain stability in the market. However, production of HDPE had recovered by the start or mid-October flooding the domestic market with a surplus. Although traders were helped by the continuously rising freight charges which weakened the arbitrage margins for imports from overseas, the slump in demand ahead of the Christmas season in North America and Europe forced most traders to sell their stocks at significant discounts. Demand from the packaging Industry gave the markets some breathing room but the return of strict lock downs and quarantine protocols in China and Northeast Asia had led to ExxonMobil, Dow, LyondellBasell etc., to revise their prices downward drastically to the tail end of December FY21 owing to a lack of demand from overseas. The outlook for Q1 of FY22 remains highly unpredictable due to the pandemic disrupting logistic networks once again. Although the effect on polymers market may not be as severe as during the Q1 of 2020 period but demand fundamentals could certainly be weakened as result of the ongoing crisis. Demand is expected to pick up during the early to mid-February when markets, especially those in Asia become more pandemic ready.
Asia
The Asian HDPE market witnessed an opposite of the trend from North America as prices of HDPE on an average increased in Q4 from the Q3 levels as prices of Injection grade HDPE in China increased by almost 10% and the increase was 11.2% for the Blow Molding grade. Supply side tightness persisted during Q4 as freight costs from Europe, U.S.A and the Middle East to East Asia during the October to November period were at record levels. China was also crippled by an energy crisis since October owing to coal shortage which forced the government to cause an intervention and ration the coal supplies to distribution companies. However, this intervention could not lead to any long-term gains as the month of December saw the country hit by the new wave of pandemic disrupting domestic production as well as imports from overseas due to clogging at the container terminals. India too saw a significant rise in the average prices of HDPE compared to the Q3 levels. A significant increase of 15% was observed during Q4 assessments for the HDPE Blow Molding grade and 12.3% for the Injection grade. India too was hit by shortages in coal reserve during the same period pushing up the energy costs. Although manufacturers had started revising prices downward during the month of December, the price cut did not affect the overall sentiment for Q4 as Demand had outmatched supply over the entire quarter. The Outlook for Q1 of FY22 remains mixed with the new wave of pandemic likely to affect production rates across Asia. As a result, prices could see an uptrend by the mid-January to early February period.
Europe
European HDPE market too like the US market saw a marginal depreciation in the prices of HDPE during Q4 of FY21 compared to the Q3 levels. The average prices of HDPE Injection, Blow molding and Film grades were on an average 3% lower over Q4 compared to Q3 assessed on an FD Hamburg basis. Demand declined since the closing week of November FY21 as the holiday season saw most companies including INEOS and LyondellBasell revise their prices downward. Natural gas market’s anomalous trend this time around had a direct impact on the production levels as price was on a downtrend for majority of Q4 and only started reversing by the second week of December. This had led to the exporting countries like the Netherlands and Belgium continue with the same production levels. The new wave of pandemic however impacted their export base as East Asia went back to lock down mode during the closing weeks of Q4 further reducing the prices of HDPE. The Outlook for Q1 of FY22 remains uncertain as the new wave of pandemic disrupts market signals and global logistic networks making it difficult for market players to assess actual demand. A lot, however, depends on the severity of the winter in Europe and US as production levels come down during the peak winter season owing to increased energy demand and in turn the energy costs.
For the Quarter Ending September 2021
North America
The overall domestic market outlook of HDPE strengthened in the North American region during the third quarter of 2021. The upward trajectory in spot export prices seemed to have continued in the 3rd quarter with supply side constraints unresolved. There was a sudden surge in the HDPE contracts for the last week of August as Hurricane Ida caused force majeures among the Texas manufacturers. Spot prices of HDPE Injection molding and Blow molding Grade stood at 1795 USD/MT FOB Texas and 1890 USD/ MT FOB Texas respectively during the month of September.
Asia
The market of HDPE witnessed an upward trend during the third quarter of 2021 in the Asia Pacific region. A sharp rebound in the consumer demand amid the active pick-up in market activities caused a spike in the prices of HDPE in the Asian markets. Besides, the regional market faced a scarcity of supplies as several countries seemed to grapple with the outbreak of the Delta variant early in Q3 which led to the slowdown in trading activities across the region. In India, Ex-Silvassa (pipe grade) price of HDPE escalated from USD 1363/MT to USD 1401/MT during the quarter. In addition, high freight costs have also put forth pressure upon the manufacturers and traders to implement a hike in the prices to safeguard their margins in Q3 2021.
Europe
The European market of HDPE experienced mixed sentiments in Q3 2021. The pricing trend observed a downward trajectory as FD Hamburg price declined from USD 1741/MT to USD 1637/MT during the third quarter. The demand outlook remained stable throughout the quarter due to the consistent demand from the downstream automotive and construction industry. Factors like disrupted supply, high freight costs, and low availability of containers resulted in the hiked prices of HDPE across the region.
For the Quarter Ending June 2021
North America
HDPE prices shot up this quarter across North America, backed by huge spike in demand from downstream packaging sector. Major plant turnarounds during previous quarters, lowered down the inventory levels, where the demand suddenly recovered in April and May. Major manufacturers kept on releasing previous orders, and fresh order had to wait until the closure of deliveries. Following the material shortage, major producers ExxonMobil, Equistar, Dow and Chevron Phillips increased their HDPE prices during the month of April and May. Thus, prices of HDPE revolved around USD 2155/MT for injection moulding grade and USD 2278/MT for blow moulding grade during the last week of the quarter in USA.
Asia
Asia witnessed dull market sentiments oh HDPE during this quarter, where buying momentum remained low that pressured its prices. In China, lower buying activities under ample inventory level led to continuous slips in prices of HDPE in the country. New capacities commissioned during April-end, including China's Lianyungang Petrochemical (subsidiary of Zhejiang Satellite Petrochemical) and Huatai Shengfu's new 400 KTPA HDPE unit and 400 KTPA LLDPE/HDPE units respectively. While in India, under strict COVID measures imposed by government to curb on pandemic, demand for HDPE tumbled amid stable production activities in the country. Therefore, prices of HDPE (Injection Moulding grade) settled at USD 1283/MT and USD 1211/MT in India and China respectively during the 4th week of June.
Europe
Due to considerable shortage of HDPE in Europe and America, prices of HDPE shot up to an extreme height during this quarter. European buyers faced difficulties to procure HDPE in their respective country, as extreme shortage of several resins including HDPE led to delayed shipments. Low container availability also exacerbated the price hike across the region, where rising freight remained another concerning factor. Thus, in the midst of stable demand outlook, buyers were ready to pay premium on early cargoes, which made prices to rise during this timeframe.
For the Quarter Ending March 2021
North America
North American polyolefins manufacturers experienced huge and rare weather abnormality, that reduced the production of HDPE to negligible. Winter storm across the US gulf coast totally disrupted the production activities of almost all the plants across the area. More than 80% of olefins and polyolefins plants remained idled for almost two months from early February till mid of March, during this period FOB prices of HDPE rose by 30% and settled at USD 1520/MT in Texas. By the end of the quarter, supplies started healing and more than 50% plants came back to operations, but due to limited availability of feedstock monomers and additives, production of HDPE remained low.
Asia
The Asian market registered steep rise in prices during this quarter amid firm demand and lower availability across the region. The demand fluctuated throughout the quarter, and hence the prices also remained unstable. During February and March, prices of HDPE rose rapidly due to severe global shortage of feedstock chemicals in effect of major plant turnaround across US gulf. Like in China, EXW Jiangsu (China) HDPE price rose by 7.28% within the quarter, which was also an outcome of the reduced production rate during Chinese Lunar Holidays in February. In addition, several domestic plants in China like Sinopec Maoming, Sinopec Yanshan, and PetroChina Sichuan idled for plant maintenance activities by the end of March.
Middle East
Disrupted plant operations across the US Gulf coast stirred the availability of polyolefins including HDPE in the Middle Eastern countries. Due to these situations global polyolefins prices soared to its peak, which were further supported by recovery in global crude oil prices. Besides, Mehr petrochemical, a major HDPE manufacturer of Iran, resumed their production activity of a plant with capacity of 300,000 MT/year, which was shut down a week before due to technical glitch.
For the Quarter Ending September 2020
North America
Coronavirus strengthened the Q2 demand outlook of the North American HDPE market, majorly driven by strong packaging demand from food, medical and healthcare industries. Supply tightened as the country witnessed delayed deliveries followed by scarce resin availability. In September, the exports reduced by a prominent percentage as an outcome of the force majeures implied against Hurricane Laura. Although the demand from other sectors such as construction, automotive and agriculture considerably improved but were still low compared to the pre lockdown levels.
Asia
Asian HDPE market sentiments fluctuated in a narrow range amidst consistent demand and ample supply. As restricted cargoes from Iran were discharged in September, it flooded the market with abundant product volume. China appreciably bounced back from the pandemic blows with the Polyethylene demand reaching pre lockdown levels due to active downstream market. In contrast to improved offtakes from China, negligible change was observed in the Southeast Asian region as it tumbled against the cold waves of the economic imbalance caused by the Coronavirus contagion. However, if demand fundamentals remained strong in next quarter, the regional HDPE market could showcase a substantial gain in the near term.
