For the Quarter Ending June 2022
In North America, R-HDPE prices have witnessed mixed sentiments throughout the second quarter of 2022. In the first half, stable offtakes from the downstream packaging sector and reduced post-consumer bales prices have pressured R-HDPE's market sentiments in the regional market. Also, the inclination toward surplus availability of Virgin HDPE has substantially affected R-HDPE's market value. Furthermore, global supply disruptions have severely hampered import-export activities resulting in higher freight charges and curtailed availability of post-consumer bales supplies, escalating the manufacturing costs at the quarter-end. After the conclusion of Q2, the prices for R-HDPE- Natural Pellets in Houston, USA, settled for USD 2400/MT on a FOB basis.
The r-HDPE market continuously rose in China in the second quarter due to strong demand from downstream packaging and bottling sectors. The resurgence of Covid cases in China has compelled the production units to operate at limited capacities, surging the market value of R-HDPE. Also, the zero covid policy has constrained the supplies for post-consumer bales, culminating in hiked prices. Furthermore, the costs increased in India due to robust demand and constrained supplies in the first half of Q2. However, the uncertainties in the terminal market and the key energy raw material coupled with demand deterioration culminated in a slump in prices. In June, the R-HDPE costs in India were assessed at INR 104600/MT Ex-Delhi.
Domestic R-HDPE prices climbed at the beginning of Q2 amidst strong demand and curbed supplies of feedstock virgin HDPE in the European region. The demonstrated gains in the market value of R-HDPE have been attributed to soaring energy costs brought on by tension between European nations. Moreover, the inclination towards sustainable goals for a circular economy from top market participants has also pushed the demand for R-HDPE, passing on the high-cost pressure to the consumers. However, with gradually improving raw material market conditions and bullish market demand, the prices of R-HDPE in Germany escalated significantly, hovering around USD 2145/MT in June on a FOB basis
For the Quarter Ending March 2022
In North America, prices of R-HDPE decreased during the first quarter of 2022 due to prolong uncertainty in the demand pattern. In January, the demand and supply gap narrowed because of the Omicron virus spread which led to the dull pickup in market activities. However, the demand from the packaging sector remained firm throughout the quarter. Increased supply of feed HDPE at low cost from the industries impacted the prices, and less demand from downstream automobile and textile industries further contributed to the downfall. By March 2022, R-HDPE prices settled at USD 2500 per tonne and witnessed a decrement of 19% from the last quarter of 2021.
Prices of R-HDPE remained highly volatile during Q1-2022. Prices decreased due to low feed HDPE prices and lacklustre demand from the domestic sector in January. However, prices surged in February and March because of increased feed HDPE prices after mid-quarter and high demand from the various end-user industries. Furthermore, the overall production cost was impacted by high crude oil prices because of the war between Russia and Ukraine. R-HDPE prices settled at USD 1326.95 per tonne in the Indian Market by March 2022, with an increment of 2% from the previous quarter.
R-HDPE prices rose significantly in the European region, especially at the beginning of the quarter. War tensions in the East European region resulted in supply shortage of raw materials HDPE and Carbon Black, which impacted the overall costs noticeably. High energy values further escalated the production costs, which caused an overall surge of 9% from January to March. Prices of light pellets R-HDPE were accessed at USD 800/MT on FOB basis in Germany.
For the Quarter Ending December 2021
Backed by the surge in HDPE prices and scarcity in post-consumer bales in the spot market, the North American R-HDPE market jumped high in October causing the contracts to stay firm. However, the loosening constrictions in freight movement and supply recovery of HDPE tipped down the R-HDPE prices in the second half of the quarter. Despite the optimistic demand from the food and commodity packaging end-user sectors, the R-HDPE market continued to show bearish traits evidenced from the gradually falling prices of post-consumer bales and injection moulding grade R-HDPE pellets with the highest decline observed in blow moulding grade R-HDPE prices in the US market. The traders were seen prioritizing price cuttings amid competition from supply abundant HDPE market. The December prices for R-HDPE in the USA were assessed as USD 1501/MT and USD 1465/MT for Blow molding and Injection molding grades, respectively.
The R-HDPE market in Asia was termed high in October and November stemming from the inflation in virgin HDPE prices that got translated into the prices of post-consumer HDPE raw materials. China saw high trending recycled R-HDPE flakes during October on account of curtailed recycling processes under the “Dual Control Policy”. The output enhanced gradually with improving energy stocks causing the prices in December to settle at USD 936/MT FOB Tianjin. Snug supply and container shortage constraints amid the festive period-induced peak in demand enhanced the woes of Indian manufacturers who resorted to offering high contract prices during November. The traders were heard remarking about having to offer competitive prices keeping the virgin HDPE market prices in mind despite supply deficiency for a major part of the quarter. However, with gradually settling raw material market conditions and year-end dullness in demand, the prices of R-HDPE dropped significantly hovering around USD 1254/MT Ex-Delhi December.
The European R-HDPE market remained tight during October and November with a stronger virgin HDPE market, shortage in raw material inflow and sturdy demand from the downstream industries. The energy-intensive recycling process amid the catastrophic energy crisis in Europe raised the input prices to soaring levels, thus causing the R-HDPE prices to maintain prominent heights, which decreased eventually with slight enhancement in energy inventories and improving post-consumer bale supplies. However, the shortfalls in sorting processes raised quality concerns amid recyclers who resorted to offering competitive prices on recycled pellets to attract demand that had faltered with a seasonal lull during the year-end. The prices for R-HDPE in Germany were assessed as USD 1705/MT FOB Hamburg.