A widely used industrial raw material, High Density Polyethylene or HDPE belongs to the family of polymer products derived petroleum. A high-density version of plastic, HDPE is harder, stronger and slightly heavier compared with Low Density Polyethylene. Known for its versatile qualities HDPE is used extensively in logistics, packaging, transportation etc.
Key end-use properties are high stiffness and rigidity, excellent toughness and impact strength, outstanding tear, chemical and grease resistance. HDPE products are also lightweight and shatterproof.
HDPE is found in grocery, merchandise and trash bags; containers for frozen food and dairy products; caps and closures; liners for cereal, cracker and other food boxes. Additional applications include plastic drink cups, toys, dairy crates, bread trays and pails for items from paint to fresh produce.
HDPE is also used in safety equipment, such as hard hats; home insulation; bottles for milk, juice, household/industrial chemicals and motor oil; large (rotomolded) tanks for storage of agricultural and lawn care chemicals; and pressure pipe and sheet applications.
Global production of HDPE is estimated to be around 33 million tons in 2007. Asian region with 10 million ton is expected to contribute 10% of the total global output. Demand from rising economies like China, India etc. have made Asia the main growth area of HDPE consumption.
The Indian output is estimated to be around 500,000 tons per year with 60-70 percent accounting for polyethylene and the rest polypropylene. Average per capita consumption of polymers in India at 4 kg is rated as quite low compared with global average of 20 kg and 100 kg for OECD countries.
Indian demand of polymers is expected to touch 10-12 million tons in 2010 with the country expected to emerge as the third largest consumer after US and China. Reliance, IPCL, Haldia Petrochemicals and GAIL are the leading producers in the country. The industry demand is expected to touch 12.4 million tons by 2010-11, becoming third largest consumer after US and China.
The Indian government has considerably brought down the customs duty in the last few years. The GoI increased the foreign equity participation in the petrochemical industry to 51%. Foreign firms have been allowed to set up 100% owned companies in India in the plastics processing and other related sectors.
Fortunes of all members in polymer family depend upon the price of crude oil and natural gas. Economic growth in major consuming countries such as China and U.S also influences price in domestic market. Variations occur on a monthly basis in domestic polymer prices largely based on changes in the global price for crude oil and natural gas.
There are whole lot of producers and buyers in the production and supply chain whose business is highly dependent on the right price discovery of plastics. With liberalized government policy in place, more number of players are expected to enter, participate and grow in the polymer industry in the coming days, resulting in higher demand for right pricing & price risk management.
