Morning Briefing - 28 February 2023

CommoPlast

Morning Briefing

28 February 2023

Brent:  $82.45 (- $0.71)

WTI: $75.68 (- $0.64)

Naphtha CFR Japan: $728 (+ $7)

Ethylene CFR NEA: $960 (Stable)

Ethylene CFR SEA: -

Propylene FOB Korea: $930 (- $10)

Propylene CFR China: $945 (- $10)

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In China, risk appetite remained at the minimum level as market participants look forwards to the outcomes of the National People’s Congress, which take place on 5 March 2023.  

The upward momentum loses steam with spot PP and PE prices dropping another CNY50/ton from last week. Chinese suppliers are obviously not confident in the near-term outlook, hence, continue to aggressively push the cargoes out instead of holding on to the stocks, waiting for the demand to pick up.

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The Southeast Asian market was rather calm on the first trading day of the week. Following the drastic price cuts from a key Saudi Arabia PE producer to Vietnam last week, all eyes are on the price settlement from other sellers. Expectations are that spot HDPE and LLDPE film offers must now be down-adjusted to below the $1100/ton threshold.

Meanwhile, local Malaysia might be the only market in Southeast Asia witnessing sharp increases in March delivery PP and PE prices after a domestic producer lifted PP offers by MYR 350/ton ($78/ton), HDPE by MYR 400/ton ($90/ton), and LDPE by MYR 250/ton ($56/ton). It is to wait and see if Malaysian buyers are able to accommodate such hikes in the background of a weakening regional markets. 

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