Morning Briefing - 5 January 2023
CommoPlast
Morning Briefing
05 January 2022
Brent: $77.84 (- $4.26)
WTI: $72.84 (- $4.09)
Naphtha CFR Japan: $639 (- $27)
Ethylene CFR NEA: $870 (Stable)
Ethylene CFR SEA: $910 (Stable)
Propylene FOB Korea: $865 (Stable)
Propylene CFR China: $895 (Stable)
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International benchmarks for crude oil kickstarted the new year on a steep downswing. Just on Tuesday and Wednesday alone, Brent for March delivery nosedived 9.6% while WTI plunged 9.4% as investors worried about reduced fuel demand due to slow global growth and the worsening outbreak in China.
Several other fragments of bearish development including weak December manufacturing data in China and potentially higher-for-longer interest rates from the FED also added weight to the market.
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As expected, a major Taiwanese producer lifted February PVC shipment offers to Asia by $80-90/ton on the back of steady demand in India, reduced availability, and the bullish expectations surrounding the China reopening.
There have been discussions that the uptrend might persist well into the first quarter of 2023, which encourages customers, including the highly cautious Southeast Asian buyers, to make at least some purchases this week.
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While the import homo-PP market in Southeast Asia remains on a stable to firmer trend, responses in each market underline diverged demand conditions.
In Indonesia, the preparation for harvest season in March together with the Ramadan festival pushes customers back to the market. Deals for Vietnamese homo-PP yarn have been reached at higher levels compared to last week. In spite of the lingering concerns over the economic outlook, fears of supply tightness seem to have a dominant hand at the moment.
In Vietnam, Thailand homo-PP offers jumped sharply while most other sellers maintain their price lists unchanged. Trading activities are quiet here because of the upcoming Lunar New Year holiday, plus, the emergence of Chinese cargoes infused greater doubts on the sustainability of the current uptrend.
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