In January 2024, the High-Density Polyethylene (HDPE) market in the United States experienced a notable uptick, propelled by a rise in trading activities and heightened interest from buyers. Reports from market sources highlighted a significant increase in HDPE transactions, with buyers showing heightened engagement and a willingness to make purchases in the new year. The surge in HDPE prices was also attributed to supply disruptions caused by the Arctic Blast, bringing frigid temperatures to the US, and disruptions in the Panama Canal and Suez Canal. Additionally, the escalation in crude oil prices played a role in influencing production costs, particularly impacting feedstock Ethylene costs. This increase in production costs exerted pressure on HDPE prices during this period, contributing to the overall trajectory of rising costs in the HDPE market.

Moreover, the surge in HDPE activity was further propelled by an Arctic Blast that swept through the United States, bringing frigid temperatures and causing disruptions in various sectors. The Port of Houston, a critical hub for shipments, experienced temporary closures, leading to a backlog in deliveries. Additionally, widespread flaring of feedstocks at various plants and minor equipment issues resulted in production outages, further impacting the supply chain of commodities such as HDPE. Despite these challenges, the export market for HDPE remained firm in the Asian market due to the Lunar New Year. Shipping disruptions in the Red Sea and the Panama Canal displaced the supply from the intended demand, contributing to the increasing demand for regional resin markets. International requests for HDPE from the US flooded in, but suppliers are cautious, requiring adjustments in price expectations to meet the heightened demand.

The energy sector significantly impacted HDPE prices, with a rise in upstream Crude oil prices attributed to decreased domestic production amid severe winter storms. Further, Crude oil prices increased following the release of data indicating a more significant-than-expected decline in US crude stockpiles the last week. Concurrently, natural gas prices declined due to milder weather forecasts following recent winter conditions in North America. Ongoing tensions in the Middle East influenced upstream Crude oil prices, affecting Naphtha and feedstock Ethylene production costs, ultimately resulting in an upswing in HDPE prices.

According to ChemAnalyst, the pricing outlook for HDPE suggests a bullish trend in the near future. This anticipated price surge is closely linked to the rising Crude oil prices and elevated freight rates resulting from supply chain disruptions in the Panama Canal and Suez Canal. Additionally, there is an expectation of an upward trend in feedstock Ethylene prices, which could potentially exert cost pressures on the product.