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Morning Briefing - 06 Feb. 2025Trading activity in China’s local PP and PE markets remained sluggish post-Lunar New Year, as participants grappled with escalating US-China trade tensions and an unexpectedly rapid rise in domestic inventories. During the weeklong break, CNPC and Sinopec’s combined stock surged over the critical 800,000-ton threshold |
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CommoPlast
Morning Briefing
06 February 2025
Brent: $74.61 (- $1.59)
WTI: $71.03 (- $1.67)
Naphtha CFR Japan: (+ $13)
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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Trading activity in China’s local PP and PE markets remained sluggish post-Lunar New Year, as participants grappled with escalating US-China trade tensions and an unexpectedly rapid rise in domestic inventories. During the weeklong break, CNPC and Sinopec’s combined stock surged over the critical 800,000-ton threshold, defying earlier expectations of a more modest buildup.
The cautious sentiment weighed on homo-PP and LLDPE spot offers, nudging them down by CNY50/ton. However, suppliers resisted deeper cuts, opting to monitor for further potential shifts in China’s policies on US imports. Additionally, the lack of overseas supply also created pockets of export opportunities for Chinese suppliers, which may compensate for the lethargic domestic demand.
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The Chinese PET bottle market resumed trading on a weaker note following the holiday, catching many market participants off guard. Despite multiple planned shutdowns that were expected to tighten near-term supply, export offers declined by $5-15/ton compared to pre-holiday levels.
Market sources attribute the unexpected downturn primarily to the depreciation of the Yuan against the US dollar, which allowed Chinese exporters more flexibility in price adjustments. Coupled with the lower shipping costs, sellers were cautiously optimistic that overseas buyers would step in for fresh replenishment ahead of the summer demand season.
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