US and China HDPE Prices Fall; Europe and Other Asia Stable Amid Crude Oil Decline

The global High-Density Polyethylene (HDPE) market exhibited divergent trends, with prices in the USA experiencing a decline while in Asia, the HDPE market remained consistent, except for China, which faced a bearish trend. A significant factor contributing to the easing of prices was the declining cost of crude oil, which had a broad impact on the global market. Despite these price adjustments, demand from key downstream sectors such as construction, packaging, and automotive remained moderately low by the end of the month. Supply constraints and seasonal factors further influenced regional market dynamics. Consequently, the price of HDPE Injection Molding grade FOB Texas in the USA dropped by 2%, and Chinese HDPE Injection Molding EXW Jiangsu also decreased by 2%, while other Asian countries and Europe maintained price consistency during the week ending on July 26, 2024.

The HDPE market in the USA experienced depreciation, continuing the trend from the previous week as trading activities eased towards the end of the month. Export business softened due to competitive offers from China, prompting North American producers to consider agile export pricing strategies to remain competitive in incremental sales to avoid excessive inventory buildup. Major energy markets also saw a downturn, with Crude Oil recording its third consecutive weekly decline amid ongoing demand concerns from China. Despite an increase in feedstock Ethylene prices, HDPE prices remained low due to sufficient supply and diminished demand.  Further, the potential for a series of storms or even a single significant storm could disrupt petrochemical and plastics production, creating supply challenges that might impact HDPE prices in the near term within the region. 

Meanwhile, the Asian HDPE market generally maintained stability, with the notable exception of China, which experienced a decline amid a bearish sentiment driven by falling international crude oil prices. This decline in oil prices, largely due to reduced Chinese demand, exerted downward pressure on HDPE costs, aligning with the return of some polyethylene (PE) maintenance units that are anticipated to increase supply. Despite this, the market remains deeply concerned about future demand prospects, even as crude oil prices continue to fall steadily, with geopolitical tensions in the Middle East showing no signs of escalation. In China, although HDPE supplies have resumed with the restart of production facilities, the overall market sentiment remains subdued. Traders are suggesting discounts to stimulate trade, but these measures are not yet seen as sufficient to boost demand significantly. Additionally, the impact of Typhoon Gaemi on the Fujian province in southern China has introduced further uncertainty, as heavy rains and strong downpours threaten to disrupt the supply chain, exacerbating existing challenges in the market including HDPE.

According to ChemAnalyst, HDPE prices in the Asian market may be affected by ongoing discussions for August shipment cargoes while buyers are exercising caution as they seek greater clarity regarding settlement prices in the coming weeks. In the US market, moderate demand is anticipated, with prices potentially influenced by freight rates amid peak season demand.  Additionally, the interplay between global supply chain conditions and regional economic factors will likely play a critical role in shaping HDPE market trends in the near term.