Morning Briefing - 04 December 2024

CommoPlast

Morning Briefing

04 December 2024

Brent: $73.62 (+ $1.79)

WTI: $69.94 (+ $1.84)

Naphtha CFR Japan: - $5

Ethylene CFR NEA: Stable

Ethylene CFR SEA: Stable

Propylene FOB Korea: Stable

Propylene CFR China: + $5

*Data represent closing prices of the previous trading day 

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China’s PVC market hit an unprecedented low on December 3, weighed down by a sluggish real estate sector and the seasonal slowdown in northern construction activity. According to the latest CommoPlast data, spot prices for carbide-based PVC dropped by CNY100-200/ton in just a week, marking a dramatic CNY625/ton plunge from the post-Golden Week peak.

While this might seem like a grim development, it has sparked an unexpected wave of buying activity. Many purchasers seized the opportunity to restock at bargain prices, fueling a surge in transactions. Despite the brisk sales, Chinese PVC producers have held off on raising their offers. Market insiders attribute this restraint to efforts to clear year-end inventories amid mounting challenges in the export market.

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In sharp contrast, China’s local LLDPE market soared to a new peak for 2024 after five consecutive weeks of gains. Prices have surged by CNY400/ton from the cyclical lows of late October, buoyed by tightening international supply, stable domestic demand, and a flurry of short-covering activities.

The bulk of trading has been concentrated in southern China—a key hub for flexible packaging. However, this bullish momentum has not spilled over to other regions, where the seasonal slowdown in the agricultural film sector has kept northern markets relatively subdued. Meanwhile, the import market remains quiet, though Southeast Asian market participants, closely watching China's domestic rally, are evaluating its potential impact on the near-term market dynamics.

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