Morning Briefing - 03 Jan. 2025

CommoPlast

Morning Briefing

03 January 2024

Brent: $75.93 (+ $1.29)

WTI: $73.13 (+ $1.41)

Naphtha CFR Japan: + $1

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 

www.commoplast.com     

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China shattered its PP export record in 2024, surpassing the 2-million-ton milestone for the first time in its history. Between January and November alone, exports reached an impressive 2.2 million tons, with market analysts predicting an additional 200,000 tons from December.

This achievement highlights the remarkable resilience of China's PP export sector despite formidable challenges to global trade, such as escalating trade protectionism, volatile freight costs, and the spectre of intensifying tensions between China and the US. 

The momentum is expected to persist in 2025, in line with the exponential growth of local production. CommoPlast reported earlier that eight new production facilities are slated to commence operations between November 2024 and late 2025. These additions are expected to bolster annual production capacity by 5.45 million tons.

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China's LDPE market has slipped for five consecutive weeks, falling below the critical CNY10,000/ton threshold due to sluggish demand conditions. Market sources expected the current downtrend to persist throughout January, with local supply set to improve further, in line with the arrival of previously purchased parcels and new plants starting up.

At the moment, spot LDPE film carries a premium of CNY 1,450/ton ($198/ton) over LLDPE film, down significantly from the cyclical peak of CNY 2,425/ton ($332/ton) recorded in early October 2024. Many expect this gap to narrow to a more palatable CNY600/ton ($82/ton) and hope this could rejuvenate some degree of market activity.

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