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Morning Briefing - 16 Jan. 2025In an effort to assess near-term demand dynamics in the Chinese PE sector, CommoPlast surveyed 150 converters across the flexible packaging and agricultural film industries to gauge their operational plans as the Lunar New Year approaches. |
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CommoPlast
Morning Briefing
16 January 2025
Brent: $82.03 (+ $2.11)
WTI: $80.04 (+ $2.54)
Naphtha CFR Japan: + $1
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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In an effort to assess near-term demand dynamics in the Chinese PE sector, CommoPlast surveyed 150 converters across the flexible packaging and agricultural film industries to gauge their operational plans as the Lunar New Year approaches.
The findings reveal that only 10% of agricultural film converters and 20% of packaging converters intend to maintain operations during the holiday period, albeit at reduced rates due to a significant decline in end-product orders compared to the previous year. Notably, 40-50% of respondents have already ceased or plan to halt production by January 19, 2025.
This sharp contraction in activity add into the growing pessimism among market participants regarding pre-holiday replenishment activities. Trading sentiment in the Chinese PE sector has been weakening over the past couple of weeks as buyers retreated to the sideline, anticipating the emergence of new supply.
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A major Vietnamese PP supplier to Indonesia has firmed up offers to Indonesia by $5/ton, supported by a bullish crude sector and reduced regional production. Both Brent and WTI benchmarks broke past the $80/ton threshold as of the present trading day, lifting the crude sector near a six-month high.
Purchasing activity remained subdued, however, as buyers continued to express concerns over the Rupiah’s persistent decline, ample inventory levels, and weak end-product demand. This week, the Rupiah depreciated further against the US dollar to IDR16,131/USD, representing an almost 1% drop from the prior week.
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