Morning Briefing - 03 June 2026

CommoPlast

Morning Briefing

03 June 2026

Brent: $96.00 (+ $1.02)

WTI: $93.76 (+ $1.60)

Naphtha CFR Japan: á

Ethylene CFR NEA: Stable

Ethylene CFR SEA: Stable

Propylene FOB Korea: â

Propylene CFR China: â

*Data represent closing prices of the previous trading day

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Naphtha sheds war premium as supply routes reopen

The naphtha market is steadily unwinding the supply fears that dominated trading during the Strait of Hormuz disruption. What began as a supply-driven rally is now reversing as Middle Eastern export flows recover and shipping routes normalise. ADNOC's resumption of naphtha exports via Sohar has restored a critical supply channel into Asia, easing concerns over feedstock availability and accelerating the erosion of the geopolitical premium embedded in prices.

Earlier in the Hormuz’s blockade, petrochemical margins have forced run cuts and triggered force majeures across parts of Asia's downstream production chain. The International Energy Agency expects global naphtha demand to decline by 80,000 bpd to 7.1 million bpd this year, reinforcing expectations of a looser market balance.

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Indonesia's polyolefin market enters a market-share rebuilding phase

Indonesian producers cut PP and PE prices for a ninth consecutive time this week, highlighting a shift from margin protection to market-share rebuilding as competition from imports intensifies. The repeated reductions underscore growing pressure on domestic suppliers to win back customers despite weakening profitability and increasingly challenging market conditions.

The cuts come amid sluggish seasonal demand, lower converter operating rates and persistent hand-to-mouth buying. With buyers showing little urgency to replenish inventories and demand failing to respond to lower prices, the market remains constrained by weak consumption and expectations of rising supply availability. As a result, Indonesia's polyolefin sector is likely to remain under pressure in the near term, with aggressive producer pricing doing little to alter the prevailing bearish sentiment.

Read full story:

Indonesian PP and PE markets extend slide as domestic major deepens price cuts

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