Morning Briefing - 13 September 2024
CommoPlast
Morning Briefing
13 September 2024
Brent: $71.97 (+ $1.36)
WTI: $68.97 (+ $1.66)
Naphtha CFR Japan: $12
Ethylene CFR NEA: - $15
Ethylene CFR SEA: Stable
Propylene FOB Korea: Stable
Propylene CFR China: Stable
*Data represent closing prices of the previous trading day
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Despite downward pressure from holiday-induced slowdowns in the local HDPE and LLDPE film markets, China's LDPE film sector continued its upward trajectory for the sixth consecutive week. This sustained rally follows the market’s successful digestion of excess inventory caused by a surge in import arrivals in early July. Compounding this, unexpected production disruptions at key domestic plants helped keep stock levels under control.
The steady demand from the agricultural film sector has also played a crucial role in supporting the bullish trend. However, reliance on this sector raises questions about the market's vulnerability to shifts in demand or external factors.
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In a notable shift, a major Indonesian trading house reduced local polypropylene (PP) offers toward the weekend, responding to improved supply conditions after a key domestic producer began clearing delivery backlogs. PP film saw the steepest price drop, with reductions ranging from IDR 350,000 to 700,000 per ton, although trading activity remained limited.
The combination of weak demand, a more favorable supply outlook, and the strengthening Rupiah against the US dollar is likely to maintain downward pressure on the local market. These factors suggest that any short-term recovery in prices may be challenging, as fundamental market weaknesses persist.
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