Morning Briefing - 9 June 2022
CommoPlast
Morning Briefing
09 June 2022
Brent: $123.58 (+ $3.01）
WTI: $122.11 (+ $2.70)
Naphtha CFR Japan: $828 (- $24)
Ethylene CFR NEA: $1050 (Stable)
Ethylene CFR SEA: $1150 (Stable)
Propylene FOB Korea: $1030 (Stable)
Propylene CFR China: $1030 (+ $5)
*Data represent closing prices of the previous trading day
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Overseas suppliers started to introduce larger increases on import homo-PP offers to Vietnam this week with Thailand and Indian cargoes jumping $40/ton while Russian parcels gain $30/ton from the previous week.
Initial responses from the market toward the new price lists are inevitably disappointing, which again, is not completely out of expectations. The fact is customers have made some replenishments. Besides, many small-scale converters are forced to stop production as they can no longer compete in the international market [for finished goods] following the skyrocketing shipping costs.
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Players in the PET bottle sector might be puzzled this week as export PET offers from several key Chinese suppliers jumped up to $100/ton. Like other sectors, Chinese PET suppliers are motivated to hold on to the limited stocks on hand following the reopening of Shanghai and Beijing which is expected to bolster domestic demand. And again, cost factors play an important role.
Apparently, PTA price based on CFR China has hit the highest levels since September 2018, pushed up by the multi-year high PX costs. According to industry sources, petrochemical plants prefer to direct mixed xylenes outputs into gasoline blending for better margins, reducing the availability that goes to producing PX. Compared to a month ago, PX price in Asia rose nearly 23% to $1484/ton CFR Taiwan as of 7 June.
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The fire broke out at one of the ethylene tanks belonging to Sinopec Maoming Petrochemical in Guangzhou, China which forced the company to declare an emergency shutdown at three petrochemical units might not have a major impact on the market, according to sources. These units shall be able to come back within a week.
- Cracker No. 2: 850,000 tons/year
- LDPE No. 2: 250,000 tons/year
- PP No. 3: 200,000 tons/year
Four other units that were taken offline at the beginning of May for scheduled maintenance shall restart once the producer completed the safety inspections following the fire. These lines were initially planned to come back this week.
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