Morning Briefing - 25 March 2022
CommoPlast
Morning Briefing
25 March 2022
Brent: $119.03 (- $2.57）
WTI: $112.34 (- $2.59）
Naphtha CFR Japan: $1012.5 (+ $15.5)
Ethylene CFR NEA: $1350 (Stable)
Ethylene CFR SEA: $1350 (Stable)
Propylene FOB Korea: $1260 (Stable)
Propylene CFR China: $1190 (- $10)
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The local Indonesian PE market swayed wildly on Thursday, 24 March 2022 after rumours of potential three-digit hikes in 2Q contract prices from a key local producer circulated the ground. A segment of the distribution market quickly lifted spot PE offers, anticipating strong support from higher contract prices. On the other hand, some traders decided to cut prices fearing customers would commit to lower contract quantity, pushing the producer to allocate the excess quantity to the spot market.
In either case, buyers remain calm to further assess the situation amid the persistently sluggish end-product businesses.
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Unlike the relentless firming trend in the PP and PE market, Chinese PET bottle suppliers are under pressure of the COVID-19 related lockdown at home and decided to offer reductions in export prices by $40-65/ton week-on-week.
Data from CommoPlast showed offers to Chinese origin PET stand in the range of $1320-1360/ton to Indonesia, based on CIF terms.
Market players prefer to remain conservative about the near-term demand outlook until all COVID-19 restrictions in China are lifted. In the meantime, stronger upstream PTA and MEG costs might prevent any sharp decline ahead.
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Following the April PVC price announcement from a key Taiwanese maker, other regional and international sellers started to open a new price list, too. In Malaysia, Thailand PVC offers jumped $120/ton – higher than the benchmark $100/ton set by the Taiwanese major.
Several Malaysian buyers told CommoPlast they are turning to Chinese cargoes for better pricing. Although there is a high possibility that the market would continue to firm up, the demand from the local construction sector might soften in April and May due to the Ramadan season.
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