Morning Briefing - 17 March 2022
CommoPlast
Morning Briefing
17 March 2022
Brent: $98.02 (- $1.89）
WTI: $95.04 (- $1.40）
Naphtha CFR Japan: $921.5 (+ $15.8)
Ethylene CFR NEA: $1300 (Stable)
Ethylene CFR SEA: $1300 (Stable)
Propylene FOB Korea: $1245 (- $5)
Propylene CFR China: $1190 (- $10)
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A key local trading house in Indonesia has reduced spot PP and PE prices for three consecutive days this week amid the falling upstream costs and cloudier outlook as a result of the COVID-19 related lockdown in China.
The fresh price reductions following a stubborn period of firming up regardless of the demand condition, still attract limited buying interest. Converters have stocked up comfortably for the Ramadan preparations, sparking expectations that the downtrend has just only started.
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A series of PP and PE plants cutting operating rates last week failed to ease inventory pressure and stimulate demand in China, and a meltdown in the local market this week triggered a fresh wave of plant adjusting operating rates to accommodate the demand.
Local inventories continue to pile up, adding 5,000 tons to 1,030,000 tons as of 16 March 2022. Chinese suppliers are more willing to offer discounts in the export market to deplete the on-hand stocks before the quarterly closing. In fact, Chinese homo-PP yarn has been concluded at $1360/ton in Indonesia and Vietnam, based on CFR terms.
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