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Morning Briefing - 12 November 2024In China, spot offers for PP and PE were reduced by CNY 50/ton, mirroring weakened futures markets and a declining energy sector. Meanwhile, in Southeast Asia, industry players are facing mounting challenges, including rising shipping costs, depreciating local currencies, and declining production rates among converters, all of which continue to strain market conditions. |
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CommoPlast
Morning Briefing
12 November 2024
Brent: $71.83 (- $2.04)
WTI: $68.04 (- $2.34)
Naphtha CFR Japan: - $7
Ethylene CFR NEA: Stable
Ethylene CFR SEA: Stable
Propylene FOB Korea: - $5
Propylene CFR China: - $5
*Data represent closing prices of the previous trading day
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A major Chinese PET producer has cut export offers by $20/ton, landing prices below $800/ton FOB China for the first time this year. This adjustment follows weeks of low demand amid a seasonal downturn that led to higher local inventory. The start-up of a new plant with an annual capacity of 600,000 tons added to the sales pressure.
Although the producer aims to boost demand with these price cuts, they remain vigilant about offsetting factors. Recently, increased freight costs and weak exchange rates have raised the cost of imports in Southeast Asia, creating questions about the price cuts’ potential effectiveness.
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Following the conclusion of the National People’s Congress (NPC), the Asian polyolefin markets remain subdued. As an anticipated fiscal stimulus failed to materialise, market participants now expect to continue facing the realities of demand-supply dynamics.
In China, spot offers for PP and PE were reduced by CNY 50/ton, mirroring weakened futures markets and a declining energy sector. Meanwhile, in Southeast Asia, industry players are facing mounting challenges, including rising shipping costs, depreciating local currencies, and declining production rates among converters, all of which continue to strain market conditions.
Looking forward, optimism is cautiously pinned on the Lunar New Year demand to inject some short-term support. However, players are skeptical about the potential impact of China’s $1.4 trillion debt swap plan, which may only influence local and international trade in the longer term, leaving short-term relief increasingly uncertain.
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