Global HDPE Prices Exhibit Mixed Trends Amid Weak Demand and Geopolitical Uncertainty

High-density polyethylene (HDPE) prices displayed mixed trends globally over the past week, with stability observed in the European and US markets, while the Asian market faced a downturn. The decline in Asia was primarily driven by weak downstream demand from the construction, packaging, and automotive sectors. Geopolitical tensions further dampened global market sentiment, adding to the pressure on HDPE prices. Specifically, HDPE Injection Molding grade EXW Jiangsu (China) eased by 0.5%, reflecting muted demand in the region. In contrast, prices in Germany and the USA remained stable at USD 1255/MT Injection FD Hamburg and USD 1100/MT Injection Molding grade FOB Texas, respectively this week concluding on November 22, 2024, highlighting regional variations in market conditions.

The Asian HDPE market experienced a subdued sentiment this week, with prices falling due to weak import activity and an overabundance of supply. Geopolitical risks, particularly the ongoing Russia-Ukraine conflict, led to higher global oil prices, yet HDPE prices continued to ease under the pressure of lower demand. Import sentiment weakened as buyers hesitated, influenced by the availability of competitively priced cargoes, which further contributed to the decline in product prices. In Southeast Asia, limited deals and a lack of Middle Eastern cargoes kept prices subdued, while surplus supplies from the Middle East and the US added downward pressure. As regional demand continued to soften, buyers became increasingly cautious, avoiding inventory accumulation ahead of the year-end. This cautious procurement approach, combined with plentiful supply, resulted in a market equilibrium driven by reduced material offtake. Given the ample supply and weak demand, the market is unlikely to face supply tightness before the year's end, signaling ongoing challenges for the HDPE industry in Asia.

In the European and US HDPE markets, prices remained stable amid a balanced supply-demand dynamic. Despite rising feedstock Ethylene prices, HDPE costs held steady as demand softened this week. The European market continued its downtrend due to weak demand, with participants facing challenges in offloading material in a sluggish market. Economic uncertainty has led to a cautious approach, with little indication of a market recovery. Similarly, trading activity in the US significantly slowed from the rapid pace seen in October, as demand eased into November. Both regions are navigating a slowdown, reflecting broader economic pressures impacting HDPE market performance.

Geopolitical instability, including the Russia-Ukraine war and the Red Sea crisis, combined with fluctuating freight rates, has influenced global HDPE market dynamics. These logistical challenges impacted trade flows, but traders managed to keep HDPE prices stable, with no significant changes reported compared to the previous week.

According to ChemAnalyst, the global HDPE market is projected to maintain a downward price trajectory through November and December 2024, largely due to year-end destocking activities. Producers and traders are concentrating on lowering inventories as the year ends, which is expected to exert further downward pressure on prices. Additionally, feedstock costs, especially Ethylene, are expected to remain a key factor influencing production costs, potentially resulting in a decrease in the overall cost of HDPE.