RALEIGH, N.C., April 1, 2021 /PRNewswire/ -- The HDPE price in China is expected to see consistent growth in the near future, according to Beroe Inc.
The absence of too many suppliers in the market and an added advantage of abundant resources make the market a viable one for China. Asia controls a significant share of 42 percent in the global HDPE market, out of which China has a massive share of 28-32 percent. China has a significant place in the HDPE market, and there would be repercussions globally should the Chinese market dynamics change in any way.
According to the HDPE market analysis, China's present HDPE supply capacity is estimated at 10.4 Million MT compared to 6.3 Million MT in 2018. There has been an addition of new capacity in the form of 4.1 Million MT. There is a further projection of growth by 3.6 Million MT in 2020-2021 that will significantly enhance the domestic supply for HDPE.
However, there is still the issue of Chinese dependency on considerable imports as well. A total of 8 Million MT imports in 2019 show that China will still have to depend on imports to meet its domestic demands in the high-density polyethylene market, especially with newer online capacities.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on its recently launched market intelligence platform Beroe LiVE: https://www.beroeinc.com/beroe-live-ai/
There is an existing potential for market growth in China owing to the HDPE market share being mainly controlled by Asian markets. There has been a slow demand-growth in 2020 that may have its consequences on the Chinese market. But a detailed study of the HDPE market analysis shows that with no further plant additions beyond 2022, the gap in the capacity and demand may widen in the future. The imports from the Middle East presently constitute about 70 percent of the total imports into China. This HDPE market is mainly due to ongoing trade tensions and political disagreements with the U.S., showing a sharp decline in the imports from there in 2019. The situation is likely to continue in the same way for the time being.
Two of the top companies control a major share of 77 percent of the Chinese market. They own most of the companies in this field and the present trends show it will continue to remain the same way. Both have planned an enormous growth of capacity additions in China. Together, they will account for almost 80 percent of HDPE capacity additions in the country. This will also reflect in the import market share that is stated to see a decline of 8-10 percent. Consequently, the lowered imports will also affect both U.S. and Middle Eastern markets.
Owing to excess production, there may be a premature shutdown seen in some of the plants. Such occurrences have been witnessed in the years 2018-2019. Some suppliers may also be required to work for lower margins of profits as well.
An analysis of HDPE pricing showed steady growth in 2020 starting from the months of July and August. This could be due to an increase in demand. It is believed that the adverse situation in the logistics segment may have caused the astonishing price hike; the prices may, however, stabilize and come down considerably once the supply chain is restored to former regularity.
In the first and second quarters of 2021, there will be a percentage of increase in prices, due to steady and consistent demands. The present trends make for a predictable increase in prices in the following months of 2021.
The present trend of the price increase in the HDPE industry in China assures a greater margin for resin producers. There is a 20-30 percent increase in the margin available for integrated producers. For smaller production companies, the margin stands at 10-20 percent on average.
There is a systematic pattern followed in the profiling of suppliers. As per the HDPE market procurement intelligence, these suppliers are listed and shortlisted and then, differentiated from those who are PE manufacturing companies to those who are HDPE manufacturing companies.
The report from Beroe includes:
Market analysis of HDPE China
Supplier Analysis of HDPE China
Cost Structure Analysis
About Beroe Inc.:
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits, and reduced risk. Beroe has been providing these services for more than 15 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.