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Morning Briefing - 05 September 2024In China, renewed concerns over LDPE supply have prompted buyers to return to the market for additional replenishments. Market participants are increasingly worried about a potential squeeze in spot availability next month, as domestic production disruptions coincide with reduced import arrivals. |
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CommoPlast
Morning Briefing
05 September 2024
Brent: $72.70 (- $1.05)
WTI: $69.20 (- $1.14)
Naphtha CFR Japan: - $18
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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International crude oil benchmarks have continued to slide since the start of the week, as weak economic data from China and the United States — the world's largest oil consumers — amplified fears of a demand slowdown. Both Brent and WTI have erased all gains made earlier this year, hitting their lowest levels since December 2023.
The sharp downturn in crude prices has injected a sense of caution into the Asian petrochemical market, prompting regional buyers to pause new purchases while assessing potential market directions in the near term. Despite the bearish energy complex, most PP and PE sellers have refrained from cutting prices, though their ability to implement fresh increases remains temporarily constrained.
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In China, renewed concerns over LDPE supply have prompted buyers to return to the market for additional replenishments. The surge in buying activity follows reports that Sinopec Yanshan Petrochemical has switched its 200,000 tons/year plant in Beijing from LDPE to EVA production this week. Compounding these concerns, Zhejiang Petrochemical was forced to shut its 400,000 tons/year LDPE unit in late August due to technical issues, with no timeline given for its restart.
Market participants are increasingly worried about a potential squeeze in spot availability next month, as domestic production disruptions coincide with reduced import arrivals.
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