Crude oil and High-density polyethylene

Crude oil is a raw material for high-density polyethylene; their prices have moved together.

Crude oil (energy) and High-density polyethylene (chemical): 2 relationships.

How they are linked

1. Feedstock

Physical flow · Direct · Crude oil → High-density polyethylene

High-density polyethylene is made from crude oil: it is one of the raw materials its production routes start from.

2. Price link: feedstock cost

Cost and price · Strong · Both ways

Naphtha crackers in Asia and Europe tie HDPE costs to crude, and oil-to-gas spreads decide who is the marginal producer. Brent moves with the resin proxy at 0.24 monthly and 0.72 yearly.

• 0.24 monthly change correlation
• 0.72 12-month change correlation
• 0.18 fitted elasticity

Built from the site data on production routes, energy flows, industry value chains, input-output tables and prices.