Morning Briefing - 16 December 2024

CommoPlast

Morning Briefing

16 December 2024

Brent: $74.49 (+ $1.08)

WTI: $71.29 (+ $1.27)

Naphtha CFR Japan: - $3

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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In an unexpected move, Middle Eastern suppliers lowered import LLDPE film offers to China during the week ending 13 December 2024. This decision came despite strong upstream ethylene costs and a six-week rally in the domestic market. Industry sources attributed the price cuts to year-end destocking efforts, currency exchange challenges, and an uncertain market outlook for January.

On a positive note, the $15-25/ton price reductions spurred strong buying interest, particularly among Chinese traders eager to replenish stocks after weeks of robust local sales that had significantly reduced inventory levels.

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A leading Malaysian producer has halted operations at one of its two naphtha crackers, citing weak production margins amid a prolonged downturn in the Asian petrochemicals market. The affected cracker, with an annual ethylene production capacity of 430,000 tons, is expected to remain offline until market conditions improve.

Although the producer has not disclosed the operational status of its downstream PP and PE units, market speculation suggests a complete shutdown of several production lines throughout the first quarter of 2025. If confirmed, these disruptions could further tighten regional supply, particularly as other facilities have already scheduled maintenance overhauls for 1Q2025.

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