HDPE Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on HDPE

• The global demand is expected to grow at 2-4 percent CAGR through 2019–2024
• Asia will remain the key demand driver with an expected growth of 3-5 percent, due to the increase in per capita consumption of plastics
• Blow molding applications and food/non-food packaging applications are expected to be the key segments driving the growth across the regions
• The Mi ddle East and North America are supply surplus regions, while As ia, LATAM, and Europe are trade deficit regi ons. The trendi s broadly expected to continue in the next five years 
• Global HDPE prices decreased in 2019 and expected to drop in 2020, hence the market size to drop. In 2021, prices in some regions to increase hence market size to increase. The global HDPE prices is expected to be in the range of 960-1030 $/MT in the long term
• Capacity additions is the another major factor for drop in the prices. China and the US are expected to add another 4-6 Million MT in the next 2 years.

COVID-19 Impact on HDPE 

• HDPE market was significantly impacted by COVID-19 in Q2 2020 as demand from industrial (construction and automotive) witnessed steep decline, which resulted in adequate supply and lower demand. The prices in Q2 2020 were traded at record lows and some plants went offline due to labor shortages.
• As businesses are faced with unexpected closures and demand uncertainties, HDPE demand from automotive and construction industries which accounts for ~15 percent market share had a major impact
• HDPE demand from food & beverages remained healthy and consumer & personal care industry demand remained steady in Q2 2020.
• Demand broadly recovered in all the sectors by Q3 2020

 Global HDPE Demand by Application

The global HDPE growth is expected to be driven by the increase in demand for blow molding application (containers, jars, bottles) which are applicable in consumer goods and personal care industry

Downstream Demand Outlook

• The global HDPE demand is expected to grow at 2-4 percent CAGR driven by CPG and food & beverages industry–Growth in cosmetics & house hold products (shampoo, hygiene and beauty products) would be the major demand driver for blow moulding applications–Food packaging demand is driven by increase in snacks, meat, poultry, and frozen foods where HDPE film is majorly used. Increase in soft drinks would be another major demand driving industry for HDPE Blow Moulding Grade
• HDPE usage is increasing in potable water pipes as regulations demand elimination of PVC pipes containing lead stabilizers for such applications.
• The impact on industrial HDPE is low to medium on the overall HDPE market, since the market share is ~10-13 percent and packaging industry to drive the HDPE demand growth.

Industry Drivers and Constraints  

Drivers

• Demand from CPG industry: The demand for bottles from the consumer goods segment is expected to be steady which would be major driver. Moreover, growth from cosmetics industry would be secondary demand driver
• Demand from Pharmaceutical Industry:. Increased preference of HDPE bottles in pharma industry due to its price and properties in the recent years to be another major driver

Constraints

• Europe and US recycling targets: The European Union has set its targets for recycling to over 40 percent by 2025, which is expected to curb the demand for virgin HDPE in the market•Drop in feedstock availability: The demand from gasoline is expected to drop across the globe in 2020-2021 period, which in turn would have an effect on the crude oil distillation process, through which naphtha is derived. Hence the availability of feedstock would be affected marginally which could have an impact on the growth of HDPE in the short term