BLOG: Overseas HDPE price premiums over China remain at historic highs, but perhaps for a short time


SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

High-density polyethylene (HDPE) film prices in China remain at record highs compared to prices in many overseas markets.

Or to put it another way, overseas prices have never been so expensive in the last 22 months compared to China, as you can see in my latest monthly price index. See the post here –

(What applies to the quality of HDPE film also applies to all other qualities of PE and polypropylene).

This means that while the Chinese market is probably going through its worst period of oversupply and weak demand (this will continue until 2023), there is a lot of money to be made for producers who focus more on the market. ‘India, Pakistan, Southeast Asia, Turkey, Africa and Europe, etc.

But from the perspective of HDPE buyers – processors and brand owners – purchasing managers should use low Chinese prices to put pressure on their suppliers, wherever they are.

Market knowledge is market power for producers and buyers as they attempt to manage mini dips and rallies in regional markets – and between different grades of polyolefins – as we head down this down cycle.

We doubt that we will reach the bottom of the bear cycle before next year.

The multimillion-dollar question remains whether overseas markets will be dragged down to China’s lows as the economic crisis deepens.

Consider, for example, that in 2000-2020 the average price premium for North West European HDPE films over China was $172/ton, but in January 2021-October, it rose to no less than $668/tonne.

What would happen to the European market if premiums returned to somewhere in the region of their long-term average of $172/tonne?

Editor’s Note: This blog post is an opinion piece. The opinions expressed are those of the author and do not necessarily represent those of CIHI.


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