Morning Briefing - 1 April 2022
CommoPlast
Morning Briefing
1 April 2022
Brent: $104.71 (- $6.73）
WTI: $100.28 (- $7.54）
Naphtha CFR Japan: $923.5 (- $33.5)
Ethylene CFR NEA: $1400 (+ $30)
Ethylene CFR SEA: $1430 (+ $30)
Propylene FOB Korea: $1250 (Stable)
Propylene CFR China: $1175 (- $5)
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Apparently, the persistently weak demand condition across Southeast Asia has not only weighed on the PP sellers but also PE. Regional and international suppliers started to step back on the price list, further reiterating market players’ previous observation on the growing sales pressure.
In Indonesia, Thailand HDPE film nosedived $100/ton from the previous week to $1550/ton CIF terms. In Vietnam, a supplier for Middle Eastern cargoes is collecting bids for HDPE film at $1380/ton and $1400/ton for LLDPE film, about $50/ton below the initial price list.
Amid the high upstream costs and the weak downstream demand, one of the questions market participants have been asking is whether producers would opt to cut operating rates further to reduce the impact on the margins.
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On the bright side, trading activities in the local PP and PE market in China surprisingly pick up toward the end of the week as prices dropped. Apparently, converters managed to re-negotiate end-product term contract prices for the second quarter of the year, allowing them to accept raw materials below the CNY9,000/ton threshold.
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