HDPE Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

For instance, in North America, HDPE has shown a price decline due to sluggish demand from downstream packaging and construction industries in Q2 2023. The category's main raw material, ethylene, has experienced a declining trend, which has impacted the way HDPE is processed. In 2023 the price of HDPE in Mexico was reported to be USD 1,392/MT, a 1% decrease from 2022. Prices in the Asia region area are also anticipated to decline in 2023 because of the excess supply of HDPE and reduced demand from the construction and packaging sectors. The downturn in HDPE pricing has also been driven by lower upstream ethylene and crude oil prices in Q2 2023. In 2023, Singapore’s prices were reported to be around USD 1,050/MT on average in Q2 2023. 

The cost of HDPE production also varies depending on the scale of the project. For example, a small business that is simply looking to produce on a smaller scale will likely pay higher than a large enterprise that is looking to produce on a large scale. Prices also depend on the complexity of the production. For instance, injection molding has the highest complexity among all others, but with larger complexity, it delivers more accuracy and precise production. The cost is also high, around 50 -60% higher than the extrusion type.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, production managers at Dow Chemicals, and LyondellBasell, receive a 20% - 25% higher base salary compared to the salary received by managers working in companies such as ExxonMobil and Formosa Plastics. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the HDPE category over the last two years:

In August 2023, ExxonMobil created a brand-new high-density polyethylene (HDPE) grade, named ExxonMobil HD7165L, which had superior optical and mechanical properties. The novel product is designed for use in MDO PE film applications. It is suited to enable mono-material laminated packaging that can be used to package FMCG goods such as chips, granola bars, sauces, crackers, and etc.

In July 2023, Republic Services and a major global polymer company, Ravago, formed a joint venture worth USD 350 million in order to produce recycled pellets at four American plants. Their two plants are under construction in Las Vegas and Midwest. The Republic contributes 45%, while Ravago contributes 55% to the initiative. The four sites combined will be able to generate 300 million pounds of recycled HDPE and PP yearly.

In June 2023, TotalEnergies launched a new high-density polyethylene (HDPE) resin for applications that facilitated reduced material utilization, improved material recovery, and recycling. The new HDPE 20HD07 resins have improved mechanical and organoleptic qualities resulting in the decreased carbon footprint of final applications, such as cosmetic bottles or beverages. Additionally, it is designed for mono-material polyethylene packaging solutions to simplify sorting and recycling and thereby support the circular economy.

In May 2023, Texplore, an SCG Chemicals subsidiary, and Lummus Technology, a global provider of value-driven energy solutions and process technologies, signed a commercial partnership agreement to license and market Texplore's EXCENE HDPE technology. While Texplore would offer its EL-Cat catalyst, Lummus will provide engineering design for the building of the plant as well as services for commissioning and startup.

In February 2023, Aberdeen was selected as the second location by Bulldog Pipe to set up their manufacturing site. The company leased an existing vacant 60,000-square-foot industrial building, invested approximately USD 2.7 million, and has committed to creating 26 new full-time jobs in the Aberdeen plant with an average salary of USD 50,675 in the first year.