The High-Density Polyethylene (HDPE) market exhibited contrasting trends across the global market over the past week, marked by a price decline in Asia while the U.S. and European markets maintained a stable trajectory. In Asia, particularly in China, HDPE prices fell, driven by subdued demand from industries such as construction, packaging, and automotive. Additionally, an oversupply situation in the region, exacerbated by the upcoming Lunar New Year, further pressured the market. In contrast, the U.S. and European market experienced a resurgence in trading activity as businesses resumed operations after the holiday season, though prices remained steady. Notably, the price of HDPE Injection Molding EXW Jiangsu dropped by 2% during the week ending January 17, 2025.

China's HDPE market has been particularly challenged, with trading activity showing significant weakness in recent weeks. Concerns over market saturation have intensified due to anticipated increases in supply from domestic production and imports from regions such as the Middle East and the U.S. This has created fears of inventory build-ups ahead of the Lunar New Year, prompting many market participants to adopt a cautious, wait-and-see approach. The oversupply concerns are coupled with broader market pessimism fueled by weak demand in downstream sectors and bearish futures, further weighing on sentiment. Moreover, market participants are closely monitoring potential policy changes in the U.S. under the expected new administration of President Trump, adding another layer of caution.

Meanwhile, in the U.S., the HDPE market displayed stability despite challenges such as severe winter weather and ongoing wildfires in California. Production operations remained largely unaffected, ensuring steady market conditions. A significant development was the tentative agreement reached between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance on January 8, following resumed negotiations earlier in the month. While concerns over a potential strike had dampened buying activity across polyethylene grades, the agreement helped restore a sense of normalcy.

Similarly, the European HDPE market exhibited stability as a narrow gap between supply and demand balanced the dynamics post-holidays. While demand showed moderate improvement after the festive break, it remained generally weak across the region. Despite an uptick in feedstock ethylene prices, HDPE product prices held steady, reflecting a cautious market sentiment.

Meanwhile, Borealis declared force majeure on 3 January for its HDPE production facility at the Stenungsund site in Sweden, which operates three polyethylene plants (two for LDPE and one for HDPE). The site’s total annual capacity is 760,000 tons, with 40,000 tons dedicated to specialized polyethylene grade pipe materials renowned for their cross-linkable and stress-crack-resistant properties. This disruption adds pressure to an already tight global HDPE market, highlighting the interconnectedness of regional supply issues, production challenges, and global demand in shaping market trajectories.

ChemAnalyst anticipates further easing of HDPE prices in Asia throughout January, reflecting the subdued trading activity and ample supply ahead of the Lunar New Year. However, a potential rebound in prices could follow the holiday, depending on demand recovery and evolving market dynamics. Meanwhile, the U.S.  and European HDPE market is expected to remain steady, with feedstock ethylene prices potentially influencing future price trends.