Morning Briefing - 05 November 2024
CommoPlast
Morning Briefing
5 November 2024
Brent: $75.08 (+ $1.98)
WTI: $71.47 (+ $1.98)
Naphtha CFR Japan: Stable
Ethylene CFR NEA: Stable
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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The Southeast Asian PP and PE import market saw a muted start to the week, while domestic markets in the region showed a steady to firmer trend as local sellers leveraged currency depreciation to their advantage.
In Indonesia, the Indonesian Rupiah (IDR) fell 3.58% against the U.S. dollar in October, prompting PE price hikes of IDR 80,000 - 170,000/ton ($5 - 13/ton) across various grades. In Malaysia, the Malaysian Ringgit’s 6% drop spurred a local producer to implement monthly increases for PP and PE grades by MYR 300 – 350/ton ($69 - 80/ton). Similarly, a Vietnamese supplier raised weekly PP offers by VND 200,000/ton ($8/ton) following Dong’s 2.87% decline.
These developments came after the Federal Reserve announced in September that US interest rates would decrease more slowly than anticipated, undermining confidence in several Southeast Asian currencies. However, this trend may soon reverse, with speculation rising around the Fed’s upcoming 17-18 November meeting, which could yield further rate reductions. Any such move may buoy regional currencies in the short term, which could weigh on commodity pricing in these markets.
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In China, sluggish trading conditions have forced PP suppliers to reduce export prices by $10-15/ton from the previous week. However, escalating shipping costs to major export markets have continued to undercut the competitiveness of these cargoes, resulting in tepid buyer interest. Customers are exercising caution, carefully watching significant political and economic events this month.
Any prospects for a near-term rebound now hinge on the 14th session of the National People's Congress, where market participants are hopeful for new stimulus measures that could stimulate domestic demand and provide some relief to pressured exporters.
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