Morning Briefing - 03 Nov. 2023
CommoPlast
Morning Briefing
3 November 2023
Brent: $86.85 (+ $2.22)
WTI: $82.46 (+ $2.02)
Naphtha CFR Japan: $648 (+ $3)
Ethylene CFR NEA: $870 (- $10)
Ethylene CFR SEA: $950 (- $20)
Propylene FOB Korea: $805 (Stable)
Propylene CFR China: $840 (Stable)
*Data represent closing prices of the previous trading day
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Throughout the week, Chinese PP suppliers became less interested in the export market after the government approved the issuance of an addition 1 trillion yuan ($137 billion) of sovereign bonds to boost the economy. Chinese sellers believed that the local market might soon enter stabilisation now that confidence is higher.
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In the PET sector, Chinese suppliers kept export offers to Southeast Asia at stable levels though the downward pressure remained relentless. Oversupply coupled with the lull in seasonal demand is not ideal for pricing. While most Chinese PET bottle plants have already cut operating rates to about 70%, more new plants are scheduled to come online within the two remaining months of 2023.
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The Asian ethylene market started to lose steam amid falling downstream demand. There have been reports that buyers generally prefer to wait on the sideline while in Northeast Asia, buying ideas emerged well below the $850/ton threshold.
Naphtha cracking operators once again fell into negative margin territory. The naphtha-ethylene spread fell to about $222/ton on 2 November, below the typical breakeven point of $250/ton for integrated producers and $300-350/ton for non-integrated.
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