Morning Briefing - 8 June 2022
CommoPlast
Morning Briefing
8 June 2022
Brent: $120.57 (+ $1.06）
WTI: $119.41 (+ $0.91)
Naphtha CFR Japan: $852 (- $16)
Ethylene CFR NEA: $1050 (Stable)
Ethylene CFR SEA: $1150 (Stable)
Propylene FOB Korea: $1030 (Stable)
Propylene CFR China: $1025 (Stable)
*Data represent closing prices of the previous trading day
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Trading activities in the domestic PP and PE market in China remain mediocre despite both Shanghai and Beijing continuing to ease the COVID-19 containment measures. Growingly, market participants lose hope for a ‘V-shape’ rebound.
The urban unemployment rate rose to 6.1% in April, the highest level since February 2022. Consumers, who have lost a lion’s share of their incomes in the recent lockdown and the crackdown on the technology and property sector, might keep their wallets under ‘quarantine’, too. The Chinese government restrains from handing out cash to drive consumer spending recovery, and instead, stays focused on businesses and infrastructure. As a result, the strength of the recovery would be impeded for the fact that consumer spending was the primary driver of China’s economic growth in the first quarter.
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Following the rebound in other polyolefins grades, Indian customers started to see higher import PVC offers from several international sellers ahead of the new price announcement for July loading from a key Taiwanese producer.
While import offers are galloping higher, demand condition remains mediocre in India this week amid the monsoon season. Besides, the local market is bloated with Chinese cargoes purchased previously. Data from the Chinese Customs Department showed in the first four months of 2022, China exported nearly 195,000 tons of PVC resin to India, with April figures hitting a record high at 99,061 tons.
Nevertheless, Indian buyers do not expect the Taiwanese maker to adopt aggressive pricing strategies for July citing the comfortable local availability, and risks of stiff resistance, especially when the real demand in China slows to pick up.
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