Due to recent changes in the economy and market trends, the US R-HDPE market has seen stable pricing, which has now decreased. As of May 31, 2024, the price for natural pellets grade in Houston was around USD 1,740 per metric ton. This decline comes after a period of consistency over the past three weeks, reflecting adjustments in demand and the overall economic situation.

During May, the US Manufacturing PMI showed firm growth in the manufacturing sector, hitting a two-month high in output mainly due to a surge in export orders, the highest in two years. In spite of this growth, new orders got lowered for the second successive month, indicating a cautious attitude among manufacturers, including those in the R-HDPE domain.

Manufacturers are confronting challenges due to developments input costs, with higher prices for metals, chemicals, plastics, timber-based products, energy, and labour. This expansion in input costs, the most substantial in the past one and a half years, has been moved on to customers via higher selling prices, leading to intensified inflation in the manufacturing sector, including the R-HDPE market.

In the previous three weeks of May 2024, the R-HDPE market saw relatively stable prices, with natural pellets grade consistently trading at around USD 1,790 per metric ton. However, in the week of May 31st, prices decreased due to reduced demand and increased inventory levels, resulting in a price drop for R-HDPE.

The decrease in R-HDPE prices was driven by reduced demand from key sectors such as packaging and food processing. Earlier due to a constant supply and demand ratio, R-HDPE prices dropped in the final week of May due to average demand.

Even though variations in post-consumer HDPE bale prices impacted production costs for R-HDPE producers, overall cost pressures were rather manageable as upstream crude oil rates got lowered further.

The manufacturing sector saw significant growth in total employment due to increased orders and improved business prospects. However, rise in input costs augmented in both manufacturing and service sectors, representing the second-highest increase in eight months and indicating the extensive inflationary pressures faced by manufacturers, including those in the R-HDPE sector.

The outlook for the R-HDPE market in June 2024 is prudently buoyant, with business confidence progressing from a five-month low since April 2024, though still below long-term averages. Market expectations are induced by apprehensions about inflation, interest rates, and geopolitical factors.

In summary, the US R-HDPE market is currently going through a period of change affected by broader economic shifts and specific industry dynamics. Recent price adjustments underscore the delicate balance between supply and demand, cost fluctuations, and evolving economic conditions.