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BLOG: HDPE and PP prices outside China continue to fall towards Chinese levels

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

We first warned in April 2021 that global polyethylene (PE) and polypropylene (PP) prices would eventually approach Chinese levels.

Today’s blog post – where we launch a new weekly price comparison index for high density PE (HDPE) film grades and polypropylene (PP) injection grades – shows that the process has begun

  • The differentials peaked in April 2021 in HDPE and November 2021 in PP. Sharp declines have occurred since March 2022, as prices in other countries and regions have converged on China.

Indeed, China is experiencing a long-term moderation in economic growth resulting from the Common Wealth Reforms. Since March this year, a new downward dynamic of the Chinese economy has been added by zero-COVID policies

As we expected, container costs are falling as the post-pandemic durable goods spending cycle is exacerbated by the global inflation crisis. This facilitates the movement of excess supply from North and Southeast Asia.

As the graphs in the blog show:

  • Average HDPE film price premiums in North West Europe, Turkey, South East Asia, Vietnam, India and Pakistan peaked above China at $354/tonne in April 2021 , an absolute record. In September of this year until September 16, they were at $136/tonne.

• PP injection grade price premiums for the same countries and regions over China peaked in November 2021 at $389/tonne, another record high. Premiums fluctuated within a narrow range before a sharp decline from March this year. In September 2022, until September 16, the premium was $154/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.