Morning Briefing - 7 April 2022
CommoPlast
Morning Briefing
07 April 2022
Brent: $101.07 (- $5.57）
WTI: $96.23 (- $5.73）
Naphtha CFR Japan: $911.5 (- $4.3)
Ethylene CFR NEA: $1380 (- $20)
Ethylene CFR SEA: $1430 (Stable)
Propylene FOB Korea: $1225 (- $25)
Propylene CFR China: $1165 (- $10)
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Chinese players returned from the long weekend holiday with a good appetite for replenishment. Several key trading houses in the country reported having concluded a moderate to high number of transactions after conceding to discounts of CNY50-100/ton.
Logistics remained one of the biggest challenges at the moment after the outbreak spread to other provinces, prompting the government to further tighten the movement control. Delivery costs have so far doubled the normal rates. On the other hand, the delivery delays also forced converters to source materials from nearer suppliers to cover the immediate need until the previous purchases arrive.
Total PP and PE stock built up 70,000 tons from last Friday, which is much smaller than usual due to the lower operating rates in recent weeks.
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Regional market participants in the PVC sector started to discuss the potential outlook for May. Expectations are that major international suppliers might introduce additional increases on the back of strong upstream costs. However, the soft demand during the fasting month and the current lockdown in China might put a cap on any potential hikes.
On the other hand, Indian customers are relatively optimistic about the demand outlook in May, claiming the uptick in buying interest from the agriculture sector. Sources said that good harvest and crop prices enrich cashflow for farmers, who would return to complete the irrigation system after delays due to the pandemic.
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In related plant status news, Vietnam’s Long Son Petrochemical is on track to start up its new petchem complex in August as the construction at the polyolefin plant has reached 96% completion. However, the mix-feed cracker would come online later, which means the company would need to source spot ethylene and propylene to feed the initial production at the downstream units.
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