HDPE Premium Likely To Fade

China, Europe, Markets, Middle East, Olefins, Polyolefins

By Malini Hariharan

High density polyethylene’s (HDPE) premium over linear low density PE (LLDPE) is likely disappear in the second quarter reversing a trend that has lasted for nearly a year.

LLDPE supply is getting tighter with few capacity additions due this year. Additionally plant turnarounds in Asia and the Middle East are also likely to curtail availability, point out the Bee Lin Chow and Sheau Ling Ong in this report on ICIS news.

Swing producers have also been focusing on HDPE as the product has so far offered better returns. But they may have to rethink their decision later this year.

One Middle East producer has predicted that LLDPE prices will be $50-60/tonne higher than HDPE in 2012 and 2013.

This will be a significant change from the current situation where LLDPE is around $100 cheaper than HDPE film grade in China and Southeast Asia.

And in comparison, between August 2009 and April 2011, LLDPE was priced at a premium of as much as $130/tonne to HDPE in China, India and southeast Asia, according to ICIS.

While capacity addition in LLDPE has slowed down HDPE volumes are set to grow this year once Saudi Polymers commissions its plants with a total capacity of 1.1m tonnes/year. The company is widely expected to start commercial operations in Q2.

Iran is also due to commission two swing plants in 2012 and 2013 but the start up schedule remains uncertain given the political problems and economic sanctions that the country faces.

Meanwhile, PE producers in Asia and Europe are continuing to push for higher numbers. The blog is hearing of an upturn in pricing this week in China and producers in India have also announced price hikes.

In Europe, PE prices are approaching record high levels with producers targeting an increase of $200/tonne following an increase in ethylene contract prices, writes Linda Naylor in a report on ICIS news.

European PE prices in 2012 have already risen by more than 20%, and the new proposed hikes would take the amount of increase beyond 30% if implemented.

With crude oil trading at a 43-month high, naphtha-based producers in Asia and Europe are under pressure to raise prices. But whether this can be sustained remains to be seen.


China Inland Boom: Who Will Benefit?


By John Richardson This fascinating article in The Economist raises further impo...

Learn more

PE Margins Lowest On Record


By John Richardson ANOTHER week has gone by with no evidence of significantly st...

Learn more
More posts
Omicron, petchems and the developing world: we might get lucky this time, but maybe not next time

By John Richardson UNTIL ALL of us are adequately vaccinated none of us are sufficiently protected i...

Benzene, the need for a new global Industrial Revolution and the big challenges that lie ahead

By John Richardson THE CHART BELOW shows that 60% of global benzene production in 2021-2040 is forec...

Global polypropylene could also move from inflation to deflation in Q1 next year

By John Richardson WE ALL NEED TO ASK ourselves whether the global patterns in polyethylene (PE) and...

Global polyethylene could move from inflation to deflation by as early as Q1 2022

By John Richardson THE BALTIC DRY INDEX, one of the excellent barometers of overall economic activit...

As China coal shortages end, polyolefins margins reach historic lows on oversupply

By John Richardson AGAIN, DON’T say I didn’t tell you. In my 11 October blog post, having talked...

Dip in Chinese PP exports only temporary with Q1 2022 resurgence looking likely

By John Richardson TRADE DATA when combined with price assessments, supply and demand estimates and ...

Global polyethylene supply could lengthen, becoming a buyers’ market, sooner than many people think

By John Richardson RARELY, IF EVER, have events felt so bafflingly complex in the global polyethylen...

China could either see net imports of 63m tonnes in 2021-2031 or net exports of 18m tonnes!

By John Richardson CONFUSED BY the above chart? Once again I certainly hope so, provided confusion i...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more