Morning Briefing - 6 December 2022
CommoPlast
Morning Briefing
06 December 2022
Brent: $82.68 (- $2.89）
WTI: $76.93 (- $3.05)
Naphtha CFR Japan: $668 (- $2)
Ethylene CFR NEA: $880 (Stable)
Ethylene CFR SEA: $920 (+ $40)
Propylene FOB Korea: $850 (Stable)
Propylene CFR China: $885 (Stable)
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The Chinese PP and PE market kickstarted the week on a strong note as market participants continue to bet forward on the bullish expectations as the country eases COVID-19 restrictions in more cities.
However, the actual end-product demand at the moment has not witnessed any major improvement, yet. In fact, a number of small-scale manufacturers told CommoPlast they are planning to let workers go off for the Lunar New Year holiday as early as late December due to the lack of end-product orders.
“The market needs time to recover from the strict lockdowns. We are building stocks for the post-Lunar New Year period,” a trader added.
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New offers are limited in Southeast Asia as most suppliers have concluded the December shipment offers. However, in Indonesia, a major local producer lifted spot PP prices by another $20/ton, mirroring the active replenishment activities in the nearby China market.
The continuous rising PP offers unavoidably pushed buyers to the sidelines. As reported earlier, finished-product businesses across the board from woven bags to household items, and beverages, all have been falling for several months.
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It is reported that Malaysia’s PrefChem restarted the 1.2 million tons/year cracker in Johor in late November – a month after an explosion and fire occurred at an interconnecting pipe at the adjacent refinery forced the producer to shut down for safety inspections.
However, all PP and PE lines might only come back online between January-February 2023, according to market sources. In the meantime, PrefChem is offering excess ethylene and propylene to the spot market.
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