Morning Briefing - 11 December 2024

CommoPlast

Morning Briefing

11 December 2024

Brent: $72.19 (+ $0.05)

WTI: $68.59 (+ $0.22)

Naphtha CFR Japan: + $5

Ethylene CFR NEA: Stable

Ethylene CFR SEA: Stable

Propylene FOB Korea: + $5

Propylene CFR China: Stable

*Data represent closing prices of the previous trading day 

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The five-week rally in China's local LLDPE film market has failed to provide any positive spillover effects to the peer LDPE film market, which has now entered a three-week decline streak. On a weekly basis, the upper end of the LDPE price range recorded a marginal drop of CNY 50/ton, while the average monthly prices have seen a sharper decline of approximately CNY 125/ton. This trend highlights the increasing pressure from improving local supply conditions and waning demand from the agricultural film sector.

Despite these headwinds, the LDPE film market’s decline has remained relatively moderate, supported by steady demand from the packaging industry. However, industry insiders express growing concerns over the near-term outlook. The anticipated reduction in industrial packaging demand, potentially linked to the impending US government policy changes, could further exacerbate downward pressures in the coming weeks.

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The Southeast Asian homo-PP market has shown signs of softening, with Indonesia leading this trend as regional and international suppliers adopt lower pricing strategies for the second consecutive week.

Indonesian buyers of homo-PP have exhibited limited urgency in replenishing stocks, despite the typically higher demand expected ahead of Ramadan. This cautious approach stems from multiple factors: sluggish downstream demand, sufficient existing inventories, concerns about a potential influx of Chinese materials once shipping costs stabilize, and fluctuating exchange rates. These challenges have collectively discouraged buyers from engaging in significant restocking activity.

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