HDPE Prices Rise in Europe and Decline in Asia Due to Shifts in Supply and Demand Dynamics

In the first half of August 2024, the High-density Polyethylene (HDPE) market witnessed contrasting trends across various global markets, with prices rising in Europe but weakening in Asia. In European countries, prices increased amidst supply disturbances, despite weak demand from downstream sectors such as construction, packaging, and automotive. Conversely, the Asian market saw a decline in prices, primarily driven by a drop in upstream Crude oil prices, which affected markets globally. Moreover, regional market dynamics were shaped by supply disruptions and seasonal factors, influencing downstream demand. Consequently, the price of HDPE Injection Molding EXW Jiangsu in China decreased by 0.4% while the German HDPE Injection FD Hamburg elevated by 2% during this period.

In this timeframe, the HDPE market in Europe experienced a rise in prices, even though trading activity remained sluggish due to the ongoing seasonal summer slowdown, with many market participants withdrawing from business dealings. The price escalation was mainly driven by supply constraints, as Europe encountered a reduction in import shipments. The price trajectory was primarily influenced by supply-side factors, with a further reduction in import volumes anticipated by the end of September. Furthermore, several price settlements for August were reported, adding to the upward pressure on HDPE costs. Moreover, the 1.4% increase in upstream Naphtha prices led to a 2% rise in feedstock Ethylene prices during this period, which subsequently drove up the overall cost of HDPE.

Conversely, the Asian HDPE market displayed signs of weakness, with many downstream buyers cautious about making import purchases in anticipation of increased regional supplies. Market activity in Southeast Asia was muted, with the assessment of polyethylene import prices being influenced by limited deals and selling indications, as most suppliers had already fulfilled their sales for August shipment cargoes. The market outlook was perceived as bearish, affected by declining demand for HDPE in China, despite expectations that converters might start restocking later in August to prepare for year-end demand. Although freight costs for import shipments from Northeast Asia remained elevated, market players noted a gradual decline due to better container availability. Additionally, a decrease in freight rates could lead to a surge of competitively priced materials like HDPE, especially when compared to Middle Eastern cargoes.

Additionally, ChemAnalyst predicts that the current trend in the HDPE market is likely to persist in the upcoming weeks. In Europe, HDPE prices may continue to rise due to ongoing supply disruptions, even if demand decreases further. Meanwhile, in Asia, prices are anticipated to keep declining, driven by weak demand from the downstream construction sector during the monsoon season, which could further impact product prices. These regional dynamics are expected to significantly shape the HDPE market, with supply-side factors and seasonal variations playing crucial roles in determining future price trends.