Morning Briefing - 31 May 2022
CommoPlast
Morning Briefing
31 May 2022
Brent: $121.67 (+ $2.24）
WTI: Holiday
Naphtha CFR Japan: $873 (- $9)
Ethylene CFR NEA: $1050 (Stable)
Ethylene CFR SEA: $1150 (Stable)
Propylene FOB Korea: $1030 (Stable)
Propylene CFR China: $1010 (Stable)
*data represent closing prices of the previous trading day
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Malaysian customers reportedly received fresh June PP and PE offers from a key local producer with sharp reductions from the previous month, which is very much in line with the market expectations, considering the persistent downtrend in the import ground.
The Malaysian polyolefin market is expected to face heightened competition in the coming month as PrefChem successfully restarted its 1.2 million tons/year ethylene cracker in Johor, paving way for the downstream PP and PE plants to come back after more than two years of shutdown. According to sources close to the producer, off-grade PP cargoes might become available as early as the beginning of June.
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Shanghai is set to reopen on 1 June following two months of strict lockdown and the municipal government has also announced various economic support measures to spur growth including unconditional resumption of manufacturing sector, accelerating approval of construction projects, and tax rebates. However, traders just don’t immediately buy into the good news.
A mediocre rebound in futures trading and a stable local PP and PE market are not what market participants expected. “The biggest question is how quickly the demand can come back? Shanghai might start to reopen on 1 June, but it might take weeks or even months until the city could restore the pre-lockdown economic activity levels. Many converters might find themselves facing manpower shortage,” a trader added.
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