Morning Briefing - 09 Dec. 2024

CommoPlast

Morning Briefing

09 December 2024

Brent: $71.12 (- $0.97)

WTI: $67.20 (- $1.10)

Naphtha CFR Japan: $622 (- $2)

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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Vietnam's domestic homo-PP market maintained a stable to slightly firmer trend over the past week, supported by reduced availability of locally produced materials and the depreciation of the Vietnamese Dong. Transactions remained subdued as buyers have already secured the essential quantities. However, concerns persist over the potential impact of continued currency fluctuations in the near term.

Several market participants reported that their respective banks provided guidance projecting further depreciation of the Dong against the US dollar. A weaker local currency typically drives up import costs, exerting upward pressure on domestic prices.

"We have a narrow window of 10 to 15 days to capitalize on demand ahead of Lunar New Year preparations. However, we remain cautious about the market outlook for January," commented a local distributor.

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China's domestic LLDPE film market has surged to its highest levels since June 2022, driven by tighter supply resulting from several local plant shutdowns and stable demand from the agricultural film and flexible packaging sectors. However, market participants have raised concerns about the sustainability of this upward trend as key production facilities are set to resume operations.

Fujian Refinery's two 450,000-ton/year LLDPE units and Sinopec-SK Wuhan's 300,000-ton/year LLDPE unit are expected to come back online by December 8, potentially easing the current supply constraints.

The rally in the LLDPE film market has also created spillover effects on the LDPE film sector. However, optimism in both markets has started to wane with the anticipated improvement in local supply conditions.

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