Morning Briefing - 14 Jan. 2025
CommoPlast
Morning Briefing
14 January 2025
Brent: $81.01 (+ $1.25)
WTI: $78.82 (+ $2.25)
Naphtha CFR Japan: + $18
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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China's oil market is set to encounter substantial turbulence following the decision by Shandong Port Group—a critical gateway for sanctioned crude oil—to prohibit US-blacklisted vessels from accessing three major ports under its jurisdiction: Qingdao, Rizhao, and Yantai. This policy is expected to significantly disrupt the inflow of heavily discounted oil shipments from Venezuela, Russia, and Iran.
The move has triggered apprehension among independent Chinese refineries, which rely on these discounted supplies to maintain competitive production costs. Analysts warn that the policy could intensify financial pressures on these refineries, potentially undermining their profitability and competitiveness. The ripple effects are already being felt in downstream petrochemical markets, where domestic and international stakeholders are bracing for an escalation in production costs.
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The Chinese LLDPE domestic market has been on a two-week downtrend, shedding CNY300/ton ($41) since December 30, 2025. This marks a stark reversal from the earlier nine-week surge, during which prices soared to a 30-month high.
The primary headwind for the sector lies in the burgeoning supply outlook. Increased domestic production, coupled with expected import arrivals from the Middle East and the United States, has stoked fears of market saturation. These concerns are further exacerbated by the looming risk of inventory build-ups as the Lunar New Year holiday draws near, traditionally a period of subdued industrial activity.
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