Morning Briefing - 19 December 2024

CommoPlast

Morning Briefing

19 December 2024

Brent: $73.39 (+ $0.20)

WTI: $70.58 (+ $0.50)

Naphtha CFR Japan: + $2

Ethylene CFR NEA: Stable

Ethylene CFR SEA: Stable

Propylene FOB Korea: + $10

Propylene CFR China: + $5

*Data represent closing prices of the previous trading day 

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The Indonesian homo-PP import market has encountered fresh challenges following a sharp depreciation of the Rupiah against the US dollar, exceeding the 16,000-per-dollar threshold for the first time since early August 2024. This currency fluctuation has significantly dampened purchasing sentiment, further exacerbated by elevated buyer inventory levels.

A leading Malaysian producer maintained its previous week's offers for homo-PP yarn and injection but introduced a $10/ton discount for volume purchases, which effectively lowered the market floor pricing. Despite this incentive, market activity remained subdued as buyers largely refrained from making new commitments, opting instead to await greater currency stability.

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The local HDPE film market in China has maintained a stable trend for the fourth consecutive week, despite undergoing frequent price adjustments. However, market participants remain cautious, anticipating potential disruptions due to an expected increase in supply in the coming month.

In addition to the anticipated arrival of previously procured US cargoes between late January and early February, Shandong Yulong, a major domestic producer, has recently commenced operations at a 300,000 tons/year standalone HDPE unit and a 500,000 tons/year HDPE/LLDPE swing unit. Industry observers are closely monitoring the operational stability of these facilities to assess their timeline for commercial production and the subsequent impact on the local market.

Speculation within the market suggests that Shandong Yulong may prioritize LLDPE production at its swing unit, given the comparatively stronger demand for this grade.

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