The Middle East is a major producer and exporter of PE. Buyers in the Gulf Cooperation Council (GCC) source the bulk of material from suppliers based within the region, with cargoes transported to buyers’ warehouses via trucks. Imports into the East Mediterranean market of Jordan also go by trucks from Saudi Arabia and the UAE, while buyers in Lebanon source PE cargoes via sea from GCC ports. The difficult political landscape in Iraq and Syria has led to PE imports remaining weak in these regions.

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.

Players in the GCC are also uncertain of HDPE prices sustaining, as a slowdown in China piping projects from delays in government funding has been the trend since May.

LDPE is made from the polymerisation of ethylene in autoclave or tubular reactors at very high pressures (up to 50,000 lb/square inch). The process can be used to make copolymers with polar comonomers, such as ethylene vinyl acetate (EVA) polymer.

HDPE is produced by the catalytic polymerisation of ethylene in three types of processes: slurry (suspension), solution and gas-phase reactors. LLDPE is produced by adding alpha olefins (butene, hexene or octene) during ethylene polymerisation to produce a resin with a similar density to LDPE, but with the linearity of HDPE. Many processes can swing between LLDPE and HDPE production.

The development of metallocene catalysts also allows slurry-loop operators to enter the LLDPE sector. Bimodal processes claim to produce resins competitive to those from metallocene.

Low density polyethylene (LDPE) is used as a packaging film, either on its own or blended with linear low density PE (LLDPE) to make bags, bottles, tubing and moulded laboratory equipment. LLDPE is used as film for food and non-food packaging, shrink and stretch film, injection moulding products, wire and cable, and rotomoulding applications.

The standoff between Qatar and the rest of the GCC countries led by Saudi Arabia and the UAE since June 2017 has led to a ban on Qatar-origin PE within the GCC. The East Med continues to source material from Qatar via sea following the closure of Qatar’s borders with GCC countries other than Oman.

Demand in the East Med remains weak because of political instability in Iraq and Syria, and poor finished goods sales.

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.

Prices to the Middle East are often driven by suppliers’ netbacks in other markets such as Asia. HDPE prices have risen since early 2018 following the steep rise in demand for HDPE pipe in China, driven by its move from coal to gas as the source of energy. A number of GCC-based sellers switched to producing more pipe, in view of significantly higher netbacks and cut back on HDPE film and blow moulding.

Demand in the GCC and East Med is primarily driven by food packaging which strengthens ahead of the fasting month of Ramadan. Demand is also stronger ahead of the Eid ul-Adha holiday and is soft during the summer holiday months of July and August.

High density PE (HDPE) is used in blow-moulded products such as milk bottles, packaging containers, drums, car fuel tanks, toys and household goods. Film and sheet are used in wrapping, refuse sacks, carrier bags and industrial liners. Injection moulded products include crates, pallets, packaging containers and housewares. Extrusion grades are used in pipes and conduit.

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.

Polyolefins demand in the Middle East is likely to be limited going into Q3, though an uptick is possible in late Q3 or early Q4 onwards. Summer holidays and high daytime temperatures seen in July and August are likely to cap purchasing as many people travel outside of the GCC for a break.

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.

This has led to HDPE film and blow moulding prices remaining high since early this year. LDPE film prices in the region initially saw upward gains in mid-2017, prompted by the absence of Qatar-origin product within the GCC. However, a typically small market for this grade, coupled with buyer resistance, limited any sustained increase. Ample supply from regional producers has capped LLDPE film gains, despite the absence of Qatar-origin cargoes in the GCC.

High Density Polyethylene (HDPE) Market Analysis: Plant Capacity, Production, Process, Technology, Operating Efficiency, Demand & Supply, End-Use, Grade, Foreign Trade, Sales Channel, Regional Demand, Company Share, Manufacturing Process, 2015-2035

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.