Morning Briefing - 16 May 2022
CommoPlast
Morning Briefing
16 May 2022
Brent: $111.55 (+ $4.10）
WTI: $110.49 (+ $4.36）
Naphtha CFR Japan: $923 (+ $9)
Ethylene CFR NEA: $1170 (Stable)
Ethylene CFR SEA: $1220 (Stable)
Propylene FOB Korea: $1130 (Stable)
Propylene CFR China: $1095 (Stable)
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International benchmarks for crude oil surge another 4% on Friday, 13 May 2022, fanning by reports of China might be easing lockdown as Shanghai entered the second day without any new community infection cases. Meanwhile, German is drafting a plan to ban the import of Russian oil, further straining the already tight global supply.
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The Southeast Asian PP and PE market did not respond positively to the surging energy complex. Lacking end-product orders due to weak consumption encouraged manufacturers to adopt a cautious stance when it comes to restockings. Omani homo-PP yarn and injection fell to $1250-1270/ton CIF Southeast Asia (depending on the market), ushering expectations of a possibility that import offers might fall below the $1250/ton threshold.
Meanwhile, Saudi LLDPE film was concluded at $1300/ton CIF Vietnam on the final trading day of the week – an $80/ton below the initial price list. Despite the claim that the price was meant as compensation for buyers, who bought at higher prices previously, Vietnamese customers are just not confident enough to scout the market for cargoes.
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Asian market participants in the PVC sectors expect another round of price reduction ahead as demand across the region remains soft. The sharp depreciation of the Chinese Yuan against the US dollar encouraged export-oriented sellers here to aggressively take advantage of the situation. Export offers for carbide-based PVC have fallen below the $1200/ton threshold (FOB China) at the time of this report.
In India, a major local producer activated a price protection scheme amid the heavy influx of previously purchased Chinese cargoes. Meanwhile, the spot offers in the local market softened substantially, which almost guarantee a fall in June shipment offers from overseas suppliers.
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