High density polyethylene (HDPE) prices journey southward in Europe

This week, HDPE prices drifted lower in the European region.

An industry source in Europe informed a Polymerupdate team member, "HDPE prices in Europe declined over the past week due to limited trading activity and weak demand. Market prices faced additional pressure from an increase in competitive offers. Sources within the market reported a significant lack of demand for spot volumes recently, which overshadowed the available supply. End-user demand remained low, with several consumers indicating reduced order volumes for May. The polyethylene (PE) market experienced minimal activity, largely due to a public holiday in numerous countries resulting in a shortened working week. Spot trading was subdued during the week. Seller offers contributed to the downward pressure on polyethylene prices, with competitive import offers for June further influencing the market. The ethylene monomer contract price for May was established at Euro 1,135/mt FD NWE levels, reflecting a Euro 70/mt decrease from April. This decline aligned with market expectations, attributed to a lower average naphtha price in April compared to March. Although negotiations resumed last week, market participants held varied positions regarding settlements. Some suppliers reported not offering the full decrease, while certain consumers expressed a desire to secure a complete reduction in settlements.”

Numerous polyethylene (PE) producers are keen to enhance their profit margins by retaining a portion of the reduction in feedstock ethylene's May monthly contract price (MCP). They cite their limited stock levels, which alleviates the urgency to sell volumes. These producers aim to capitalize on buyers' necessity to replenish their stocks during the peak demand season in spring, while also taking advantage of the fact that many buyers had previously restrained their purchasing due to the relative stability of PE contract prices, which largely resisted declines in upstream feedstock prices. This situation was primarily due to uncertainties surrounding tariffs on PE imports from the United States, which surfaced around mid-March and received approval from the majority of EU member states on April 9, only to be suspended for a period of 90 days. Consequently, a supply gap is anticipated for PE imports from the US in May and early June, resulting from the cancellation of shipments during the latter half of March and the first half of April. Additionally, with recent production challenges arising at domestic PE facilities, manufacturers are poised to exploit their constrained domestic supply.

In the meantime, certain distributors have begun to reduce their prices for spot PE volumes, further compounding the reductions they implemented in April. Although it remains premature to assess the full extent of this trend, it is likely a result of expanding PE import arbitrages from the US. The uncertainty stemming from the US tariff announcements led to the cancellation of numerous PE shipments to China, thereby increasing PE supplies within the US. Trading companies managing PE imports to the EU view the 90-day tariff suspension as a chance to handle these volumes. The pricing discrepancies between these volumes and domestic spot prices appear to be significant, potentially exceeding three digits, providing trading firms with an opportunity to liquidate their existing inventories at lower prices in May while restocking in June at even more discounted rates.

A large number of polyethylene (PE) facilities in Spain and Portugal experienced sudden shutdowns due to an electricity outage affecting the Iberian Peninsula. The units are gradually restarting, but the process of bringing refineries, crackers, and polymer units back to normal production levels may extend beyond a week, assuming no significant damage has occurred. Information remains limited at this time, but an initial increase in off-grade PE supply is anticipated. The closure of downstream converters' facilities, coupled with holiday breaks, has lessened any immediate supply disruptions; however, the full impact is expected to become more apparent as purchasing interest resumes in the upcoming weeks. The restoration of converters' operations is relatively straightforward compared to that of crackers and polymer units. Additionally, maintenance work has commenced at a cracker in France, while another cracker in northern France is still offline due to a separate power outage that has caused technical difficulties. With indications suggesting it may remain offline for several weeks, this situation will affect the associated PE and polypropylene (PP) units. Ongoing maintenance is also taking place at two high-density polyethylene (HDPE) plants in central and eastern Europe.

In the spot markets, HDPE film grade prices were assessed at the Euro 1065-1075/mt FD North West Europe levels, while HDPE BM grade prices were assessed at the Euro 1065-1075/mt FD North West Europe levels, both declining by Euro (-30/mt) from the previous week. Meanwhile, HDPE injection grade prices were assessed at the Euro 1045-1055/mt FD North West Europe levels, a decrease of Euro (-20/mt) from last week.

In the contract markets, HDPE film grade prices were assessed at the Euro 1620-1625/mt FD NWE Germany and FD NWE Italy levels, both falling by Euro (-20/mt) week on week. HDPE film grade prices were assessed at the Euro 1620-1625/mt FD NWE France levels, a drop of Euro (-20/mt) from last week. Meanwhile, HDPE film grade prices were assessed at the GBP 1375-1380/mt FD NWE UK levels, down GBP (-20/mt) from the previous week.

In the contract markets, HDPE BM grade prices were assessed at the Euro 1600-1605/mt FD NWE Germany and FD NWE Italy levels, both dropped by Euro (-20/mt) week on week. HDPE BM grade prices were assessed at the Euro 1600-1605/mt FD NWE France levels, lower by Euro (-20/mt) from the previous week. Meanwhile, HDPE BM grade prices were assessed at the GBP 1360-1365/mt FD NWE UK levels, a drop of GBP (-15/mt) from last week.

In the contract markets, HDPE injection grade prices were assessed at the Euro 1560-1565/mt FD NWE Germany and FD NWE Italy levels, both decreased by Euro (-20/mt) week on week. HDPE injection grade prices were assessed at the Euro 1560-1565/mt FD NWE France levels, down by Euro (-20/mt) from the previous week. Meanwhile, HDPE injection grade prices were assessed at the GBP 1325-1330/mt FD NWE UK levels, down by GBP (-15/mt) from last week.



These developments will lead to a diverse and fragmented supply landscape in May, with the underlying inventories and production forecasts of producers being crucial factors in shaping their pricing strategies. Buyers, however, will be advocating for a complete pass-through of the reduction in feedstock ethylene’s May MCP. Many are likely to seek further price reductions. Additionally, buyers will argue that the significant disparity with spot prices, including imports, necessitates a more substantial adjustment in their May contract prices. Nevertheless, producers have maintained a relatively firm stance on expanding their margins, citing the ongoing weak conditions in the petrochemical sector that pose a threat to the financial viability of PE plant operations.

Beyond immediate restocking requirements, market conditions in Europe are anticipated to remain difficult, resulting in sustained low demand. This is attributed to a largely stagnant economic outlook, with the possibility of a recession still not ruled out at this point. Apart from the flexible packaging sector and a few specific applications benefiting from fast-moving consumer goods, buyers are expected to limit their purchases to essential needs and largely avoid speculative risks. While it is premature to confirm, any significant increases in upstream crude oil production rates and the resulting impact on feedstock pricing could indicate a backwardated outlook for PE pricing. Should this scenario occur, it may prompt buyers to further deplete their stocks, where feasible, with the aim of replenishing volumes at lower prices in the upcoming months.

There remains some uncertainty regarding whether market conditions have stabilized at a low point and a new equilibrium is emerging, or if the slight improvement in metrics is a result of front-loading within the value chain during the 90-day pause in EU-US reciprocal tariffs. The outlook remains bleak in the UK, where businesses are implementing cost-cutting measures and manufacturing conditions are deteriorating due to weak domestic consumer confidence and low export demand.

This week, spot prices for all polyethylene grades were generally lowered. Although many offers are yet to emerge, some sellers have aggressively reduced prices on medium- to large-volume lots scheduled for delivery in May, offering significant discounts compared to the spot prices observed throughout May, reflecting varying perspectives among sellers. However, these signals require further validation as the market is expected to gain traction in the upcoming weeks.

FC Antwerp HDPE film prices were assessed at the Euro 1050-1090/mt levels while FCA Antwerp HDPE BM prices were assessed at the Euro 1050-1080/mt levels, both lowered by Euro (-30/mt) from the previous week. Meanwhile, HDPE injection prices were assessed at the Euro 1030-1050/mt levels, a decline of Euro (-20/-30/mt) from week on week.

Ethylene spot prices on Thursday were assessed at the Euro 735-745/mt FD North West Europe levels, a fall of Euro (-20/mt) week on week.

European ethylene contract price for May 2025 settled at the Euro 1135/MT FD North West Europe levels. This price represents a plunge of Euro 70/MT from its April 2025 settlement levels.