Deteriorating Market Fundamentals Drop The Global HDPE Prices

Beijing, China- Tepid market sentiments and utilization of existing inventories brought about such a cost pattern. China has seen the low US offers this week because of demand disruption. CIF HDPE film ranges facilitate competitively priced US origins.

Demand is a genuine concern in China, keeping the Polyethylene viewpoint bearish. However, olefin and polyolefin producers have been cutting production rates across Asia to offset this demand drop. Therefore, the prices stopped declining further and kept up with dependability and improvement in demand, or an increase in upstream costs helped spur a recovery of the expenses.

Spot ethylene costs remained stable this week because of fluctuations in crude and Naphtha values in the Asian market. Producers across Northeast Asia, from South Korea to China, have maintained and increased cracker and PDH plant rate cuts. Given the continuous demand slump, regional producers have no option yet to reduce cracker and PDH plant operating rates to reduce production losses.

In Germany, prices for the HDPE types moved similarly to prices in the LDPE and LLDPE markets with low purchasing rates and weak market sentiments. With the week ending on 5th August, the cost of HDPE in Germany slipped to USD 1640/ton (Raffia Grade) FD Hamburg and USD 1650/ton (Injection grade) FD Hamburg. As there have not yet been many production cutbacks or maintenance turnarounds, sufficient material was available on the market, which dropped the prices. Apart from that, imports are improving the supply situation. Trading fundamentals in the blow moulding market reflect the case in the automotive sector, where the demand is still desperately weak.

According to ChemAnalyst, the prices of HDPE in the global market will fall, and limited demand from the downstream plastic and food packaging sector. Prices will again come under pressure due to the declining feedstock ethylene contract price. Despite increasing production cutbacks and maintenance turnarounds because of the holiday season, sufficient material should also be available in August.