Morning Briefing - 9 March 2022
CommoPlast
Morning Briefing
9 March 2022
Brent: $127.98 (+ $4.77）
WTI: $123.7 (+ $4.3）
Naphtha CFR Japan: $1132.4 (- $26.3)
Ethylene CFR NEA: $1310 (+ $30)
Ethylene CFR SEA: $1310 (+ $30)
Propylene FOB Korea: $1305 (+ $10)
Propylene CFR China: $1275 (+ $25)
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The Saudi Arabia producer, who implemented $100/ton hikes on import PE offers to Southeast Asia earlier this week have decided to set the final prices with $50-70/ton discounts after bumping into stiff resistance.
The number of transactions remained below expectations. Several Vietnamese buyers said they are not confident enough to chase the rising wave for the uncertain outlook that comes with the Russia-Ukraine war, plus, the actual demand from manufacturers has not shown significant improvement.
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Stiff resistance was also observed in the nearby China market. Spot PP and PE offers in the local ground dropped CNY50-100/ton as a result of the piling inventory pressure among traders and distributors.
Buyers are not active. Arbitrage traders are reluctant due to the thin price gap between the spot and futures market, while converters delay replenishments until negotiations for new POs are completed.
Chinese PP suppliers are now confined to the local market as overseas buyers resist higher prices, creating a highly competitive environment here. CommoPlast has identified a series of production rate cuts at Chinese PP and PE plants. The impact on the supply and prices are to monitor.
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The rising PP and PE prices make participants in the PVC market uneasy ahead of the price announcement from a key Taiwanese producer. Costs wise, VCM remains largely stable over the past week while EDC registered some reductions.
Players are monitoring the potential impact of the Russia-Ukraine war and the international sanctions on the market. In 2021, China exported about 65,000 tons of PVC to Russia, making the country China’s 10thlargest PVC buyer.
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