Morning Briefing - 21 June 2022
CommoPlast
Morning Briefing
21 June 2022
Brent: $114.13 (+ $1.01）
WTI: Holiday
Naphtha CFR Japan: $814 (- $26)
Ethylene CFR NEA: $990 (Stable)
Ethylene CFR SEA: $1100 (Stable)
Propylene FOB Korea: $1025 (Stable)
Propylene CFR China: $1030 (Stable)
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An explosion that occurred at Sinopec Shanghai Petrochemical last Saturday that forced the company to take several PP and PE units offline does not seem to have any impact on the domestic spot PP and PE market in China. On the first trading day of the week, spot offers for both grades fell another CNY50-100/ton, putting those who bought late last week in a rather uncomfortable condition.
As reported earlier, Chinese buyers rushed back to the market late Friday last week to make purchases after seven consecutive sessions of declines, betting on an upturn as Beijing managed to put the recent flare-up of COVID-19 cases under control.
Meanwhile, Zhongjing Petrochemical offered another $15/ton discount on export homo-PP offers to $1180/ton FOB China terms. The producer also delayed the startup at the new 1.2 million tons/year PP plant to the second half of July from the initial plan in June. There are no official explanations for the decision, however, market players speculated that the unfavourable market condition at the moment could be one of the causes.
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The Southeast Asian homo-PP market rather diverges. While the weak demand, comfortable supply, and the depreciation of the Indonesian Rupiah are pressing import offers to Indonesia lower; Vietnamese buyers reported stable to firmer prices from overseas sellers at the start of the week. Regardless of the price trend differential, one thing in common the market has is the weak buying interest.
Register to read more about the struggling Southeast Asian homo-PP market here.
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A key Saudi Arabia producer opens July PE shipment offers to Vietnam with $60/ton reductions from the previous month, a development, that market players do not regard as a surprise.
The Vietnamese PE market has been growingly competitive in recent weeks amid the heavy influx of attractive South Korean HDPE film cargoes and the persistent presence of re-export LLDPE film from China. At the time of this report, several bids are observed in the range of $1180-1200/ton for HDPE film and $1240-1260/ton for LLDPE film with the same term. The market is waiting for feedback from the supplier.
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