Morning Briefing - 05 Feb. 2025
CommoPlast
Morning Briefing
05 February 2025
Brent: $76.20 (+ $0.24)
WTI: $72.70 (- $0.46)
Naphtha CFR Japan: (- $4)
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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The Chinese government has announced retaliatory tariffs in response to the latest US import restrictions, imposing a 15% tariff on US coal and LNG and a 10% tariff on crude oil. However, analysts view these measures as largely symbolic, given China’s minimal dependence on US supplies of these commodities.
Of greater concern to market participants is the potential fallout for LPG (propane and butane), which plays a critical role in China’s petrochemical sector. As the world’s largest propane importer, China remains heavily reliant on US exports—the world’s largest propane supplier. According to Kpler data, China imported approximately 17.8 million tons of propane from the US in 2024 – about 57% of China’s total imports. With a wave of new PDH plants coming online, any adjustment in import duties on propane could significantly impact production costs for PDH operators, potentially affecting downstream markets.
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The Indonesian PP and PE markets continued their downward trajectory, despite the sharp depreciation of the Rupiah against the US dollar—an economic shift that would typically bolster domestic commodity prices. Compared to the previous week, offers for most PP and PE grades in the distribution market declined by IDR 200,000/ton ($12/ton), with homo-PP injection registering a sharper drop of IDR 500,000/ton ($30/ton).
A heavy influx of imported parcels amid a stubbornly sluggish demand condition was blamed for the downswing. While a number of transactions have been concluded, a large segment of the market remains on the sidelines, anticipating further import arrivals that could exert additional downward pressure on prices.
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