The U.S. High-Density Polyethylene (HDPE) market experienced a price increase over the past week, largely driven by higher production costs stemming from escalating feedstock prices. Ethylene, a critical feedstock for HDPE, recorded substantial price growth during the week, largely influenced by rising freight rates, which further elevated HDPE production expenses. As a result, Injection Molding grade FOB Texas prices rose by 2% as of December 20, 2024.

Despite moderate demand from downstream sectors such as packaging, automotive, and construction, commodity resin trading showed higher-than-average activity as buyers sought year-end deals. Traditionally a slower period for domestic sales, December has seen strong spot demand this year, with buyers taking advantage of discounted holiday pricing. To clear excess inventory, producers have introduced competitive pricing, driving increased trading activity across both domestic and export markets.

HDPE trading momentum is likely to persist into the year’s final weeks, though with a reduced volume of offers as sellers scale back their aggressive inventory clearance efforts. By Thanksgiving, the majority of surplus HDPE stock had already been cleared through reseller channels, although intermittent sales extended into early December. Producers have capitalized on these opportunities to effectively manage inventory levels, with additional deals expected as the year draws to a close.

Further, a notable rise in upstream Crude Oil prices has put upward pressure on HDPE costs. Geopolitical developments, such as talks of further sanctions on Russia and Iran, have introduced uncertainty in the energy sector, potentially tightening crude oil supplies. These factors have led to higher feedstock costs, which in turn have influenced the price trends of HDPE.

In parallel, shipping container rates from East Asia and China to the US East Coast spiked, during this week as importers expedited shipments. Concerns over a potential restart of the US Gulf and East Coast port strike, coupled with fears of tariff increases under the incoming administration, prompted this front-loading of imports. Market analysts, including Drewry, predict further increases in transpacific shipping rates, driven by these preemptive actions. 

As per ChemAnalyst, as the year-end approaches, the HDPE market is poised for continued activity. Producers have made progress in reducing surplus inventory, but demand remains stable, offering buyers strategic opportunities for last-minute purchases. The HDPE market's trajectory will likely depend on feedstock price fluctuations, energy market dynamics, and shipping costs in the weeks ahead. Despite the challenges, HDPE continues to be a focal point for traders and buyers navigating evolving market conditions to secure favorable deals.