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CommoPlast

Morning Briefing

29 July 2024

Brent: $81.13 (- $1.24)

WTI: $77.16 (- $1.12)

Naphtha CFR Japan: + $7

Ethylene CFR NEA: + $3

Ethylene CFR SEA: Stable

Propylene FOB Korea: Stable

Propylene CFR China: Stable

*Data represent closing prices of the previous trading day 

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The downtrend in the Chinese LDPE film market accelerated late last week with transactions for Middle Eastern cargoes concluded below the $1100/ton threshold for the first time since May 2024. 

At least another Saudi Arabian producer conceded to a $70/ton reduction on spot LDPE film offers to China, yet, buyers showed no real interest in proceeding with purchases. 

This bearish trajectory in China is starting to ripple through the nearby Southeast Asian region, souring trading sentiment. Buyers, already bracing for a downtrend, are further disheartened by the influx of re-export parcels from China this week. Confidence in the near-term outlook has been severely eroded, leading to a significant decline in replenishment activities.

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Meanwhile, Chinese PVC market participants reacted negatively to the absence of substantial support policies following the Third Plenum meeting. Domestic spot offers for both carbide and ethylene-based PVC dropped by CNY50-150/ton from the previous week, reaching levels significantly lower than imports.

Chinese suppliers are increasingly diverting cargo to the export market to offset the persistently weak domestic demand. Buyers in Southeast Asia reported concluding deals for Chinese PVC cargoes at lower prices than the previous week, underscoring the fragmented market movement.

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China 

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