Aug 17, 2022 11:43 p.m.

Morning Briefing - 23 June 2022

CommoPlast CommoPlast Asia Sdn Bhd
While key PP and LLDPE contracts on Dalian Commodity Exchange extended the bear run to the tenth consecutive day, trading sentiment in the domestic ground shows signs of improvement. Apparently, buyers here are more interested in spot homo-PP and HDPE than LLDPE film at the moment.
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Morning Briefing

23 June 2022

 

Brent:  $111.74 (- $2.91

WTI: $106.19 (-$3.33)

 

Naphtha CFR Japan: $771 (- $50)

 

Ethylene CFR NEA: $980 (- $10)

Ethylene CFR SEA: $1100 (Stable

 

Propylene FOB Korea: $1010 (- $10)

Propylene CFR China: $1015 (- $10

 

www.commoplast.com     

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A day after the Taiwanese major announced the July PVC shipment offers with $90/ton reductions, market responses across the Asia region remained sluggish. Converters in Vietnam, Malaysia, and India are complaining about weak end-product demand, from which many are operating at reduced rates.

Meanwhile, in Southeast Asia, Chinese suppliers are not the only aggressive sellers. Regional producers introduced $110-135/ton reductions on July cargoes, sending the latest offers below the $1200/ton threshold to Malaysia, with duty advantages.

There have been speculations that the Taiwanese major might have to concede to additional price cuts in order to deplete the stocks given the fact that the maker was not able to completely sell out the previous month’s allocations. The market is on a watch-out.

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While key PP and LLDPE contracts on Dalian Commodity Exchange extended the bear run to the tenth consecutive day, trading sentiment in the domestic ground shows signs of improvement. Apparently, buyers here are more interested in spot homo-PP and HDPE than LLDPE film at the moment.

CommoPlast Price Index showed that over the past two weeks, the average LLDPE film traded in the local ground fell about CNY330/ton while the average HDPE film dropped merely CNY100/ton. Weak demand from both the packaging and the agricultural film sector during the off-peak season in May and June is attributed to the slumping of LLDPE and LDPE film prices.

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In a notification letter to customers on 21 June 2022, GS Caltex Corporation informed about an unexpected mechanical issue at its HDPE plant, which forced the company to stop operation at one of the lines that produce the blow moulding grade.

The shutdown duration is unclear as the company will need time to procure and change the broken part. GS Caltex, therefore, is ‘unable to deliver the TR571 cargoes for June 2022 shipment’, the notification letter added.

The 500,000 tons/year HDPE plant is a 50-50 joint venture between GS Energy Corp. and Chevron Corp that started up in June 2021. 

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