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CommoPlast

Morning Briefing

19 June 2023

Brent:  $76.61 (+ $0.94)

WTI: $71.78 (+ $1.16)

Naphtha CFR Japan: $540 (+ $9)

Ethylene CFR NEA: $715 (Stable)

Ethylene CFR SEA: $730 (Stable)

Propylene FOB Korea: $700 (Stable)

Propylene CFR China: $735 (Stable)

*Data represent closing prices of the previous trading day

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The Chinese PP, PE, and PVC markets witnessed some upticks in trading sentiment on the final trading day of the previous week after the National Development and Reform Commission announced six steps to boost growth, including accelerating the 102 major infrastructure projects and modernising the industrial sector.

Minor increases in local prices were reported, however, sources continued to question the sustainability of any potential rebound citing the ‘targeted and moderate’ impact governmental infrastructure projects have on the overall economy. 

Major International banks started cutting China's GDP forecasts as the government has limited options to boost economic growth.

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Thanks to the stabilising local PVC market in China and strong buying activities among Indian customers, it is believed that the Asian PVC market might have hit the cyclical bottom and is likely to track a stable to firmer trend in July. 

An increasing number of South Korean and Southeast Asian producers prefer to divert the allocations to the Indian market, where margins are much better. 

Looking forward, Asian PVC buyers expect the market to rise by $20-30/ton albeit with a cautious stance to monitor the macroeconomic development. 

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