Morning Briefing - 7 September 2022
CommoPlast
Morning Briefing
07 September 2022
Brent: $92.83 (- $2.91）
WTI: $86.88 ( - )
Naphtha CFR Japan: $675 (+ $9)
Ethylene CFR NEA: $1000 (Stable)
Ethylene CFR SEA: $1000 (Stable)
Propylene FOB Korea: $860 (Stable)
Propylene CFR China: $875 (Stable)
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For the second trading day in a row, trading sentiment in China remained surprisingly strong. Local suppliers claimed to have achieved a satisfactory number of transactions for homo-PP, HDPE film, and LLDPE film at CNY50-100/ton higher than the previous session, while spot LDPE film jumped as much as CNY150/ton.
The total PP and PE stocks at Sinopec and CNPC’s warehouses digested 50,000 tons in a single trading day, to 650,000 tons as of 6 September 2022.
Overseas suppliers immediately responded to the development, with two Middle Eastern producers implementing a $20/ton hike on import PE cargoes. Apparently, Chinese buyers are more willing to secure import HDPE cargoes while citing the emergence of a new supply for LLDPE film as a potential downside risk to this segment.
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While acknowledging the fact that the regional PP and PE markets have reached the bottom, Southeast Asian buyers continue to adopt a rather calm stance. There are no signs of customers rushing back to the market to secure additional cargoes before prices firm up.
“Because we are having comfortable stocks on hand, and it is still unclear if the uptrend would be sustainable. China’s Zero-COVID policy is still in place. This, in fact, is the biggest risk factor in the pricing trend. Besides, end-product businesses have not improved, yet” a regional buyer added.
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