Morning Briefing - 1 June 2022
CommoPlast
Morning Briefing
1 June 2022
Brent: $122.84 (+ $1.17）
WTI: $114.67 (-)
Naphtha CFR Japan: $881 (+ $8)
Ethylene CFR NEA: $1050 (Stable)
Ethylene CFR SEA: $1150 (Stable)
Propylene FOB Korea: $1030 (Stable)
Propylene CFR China: $1025 (+ $15)
*Data represent closing prices of the previous trading day
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Chinese suppliers started to latch on to the positive sentiment associated with the Shanghai reopening and the multi trillion Yuan stimulus package. However, the cautious stance remains in place, reflected in the mediocre increases in both futures and spot market this week. Traders are watching out for further development with hawk eyes. Several of these traders have expressed a lack of interest in the export ground, preferring to meet the reviving domestic demand instead.
Overseas suppliers started to adopt a firmer stance on spot cargoes to China, with South Korean HDPE film jumped $20/ton to $1140/ton based on CFR China terms. Middle Eastern PP suppliers are more enthusiastic, lifting homo-PP to $1110-1120/ton. New offers unavoidably face stiff resistance, for now.
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Entering the second trading day of the week, import homo-PP offers remain scarce across the Southeast Asian region. Some South Korean sellers are even absent totally, claiming to have sold out all June allocations. From the buyer’s viewpoint, sellers are taking a step back to assess the China reopening situation and how much they can leverage the bullish market outlook.
A regional market participant added, “In the worst-case scenario that demand in China fails to pick up quickly, suppliers have already depleted their stocks. In the coming days, it is all about testing the market responses. The market might have found the bottom, but how sustainable is the uptrend, we would have to wait and see.”
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