Morning Briefing - 12 October 2022
CommoPlast
Morning Briefing
12 October 2022
Brent: $94.29 (- $1.90）
WTI: $89.35 (- $1.78)
Naphtha CFR Japan: $687 (- $12)
Ethylene CFR NEA: $830 (Stable)
Ethylene CFR SEA: $880 (Stable)
Propylene FOB Korea: $865 (Stable)
Propylene CFR China: $910 (+ $10)
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Just when the market got excited about the post-holiday replenishment activities, the Chinese government ramped up efforts to contain a new wave of COVID-19 outbreak across the country. Movement restrictions and mass testing weigh on the near-term outlook. Major PP and LLDPE contracts on Dalian Commodity Exchange fell sharply after the government reiterated the dynamic Zero-Covid policies.
While Middle Eastern suppliers attempt to lift import PE offers to China on the back of tightening availability from this region, a major USA supplier stirred the market by cutting LLDPE prices by $30/ton from the previous day, to $920/ton CFR China. Buyers are puzzled by the price decision and take a step back to assess the situation.
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In Southeast Asia, new import PE offers are scarce as overseas sellers have already wrapped up October businesses and currently preparing for November shipment offers.
There are some USA PE cargoes available, mostly on the same par as Middle Eastern parcels, but due to the much higher shipping costs, SEA customers are not seeing a heavy influx of US materials at highly competitive price levels as observed in China.
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