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CommoPlast

Morning Briefing

02 August 2024

Brent: $79.52 (- $1.32)

WTI: $76.31 (- $1.60)

Naphtha CFR Japan: + $15

Ethylene CFR NEA: Stable

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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With the rebound in futures contracts on the Dalian Commodity Exchange, Chinese suppliers have increased export homo-PP offers by $5-20 per ton, bringing prices to $970 per ton FOB China. Despite this adjustment, market responses have been predictably sluggish, as more attractive cargoes are available elsewhere in Asia.

This week, Indonesia and China stand out as the only major Asian markets experiencing increased buying activities. In stark contrast, other Asian markets continue to soften.

India, for instance, is facing a downturn. A major local producer has slashed domestic PP and HDPE offers by INR 2,000 per ton, and LLDPE and LDPE prices by INR 3,000 per ton. The ongoing monsoon season is dampening demand, although there is cautious optimism that preparations for the festive season will spark an uptick in the coming weeks.

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In related plant status news, Ulsan Polypropylene Co Ltd (UPP), a joint venture between PolyMirae and SK Advanced, is planning a maintenance shutdown of its PP units this August. This would be the second major overhaul of 2024, following a previous shutdown from late November 2023 to mid-January 2024.

The PP plant, which boasts an annual capacity of 400,000 tons, is expected to remain offline for 30 days, however, sources close to the company indicate that this period could extend to 45 days if market conditions remain weak. 

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