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Morning Briefing - 28 Feb. 2025The brief rally in China’s PP and PE markets last week proved short-lived, as spot offers for most grades remained stagnant. Market sentiment continued to be weighed down by a sluggish Dalian Commodity Exchange and month-end destocking efforts. |
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CommoPlast
Morning Briefing
28 February 2025
Brent: $74.04 (á $1.51)
WTI: $70.35 (á $1.73)
Naphtha CFR Japan: â $4
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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China’s PP and PE markets stagnate
The brief rally in China’s PP and PE markets last week proved short-lived, as spot offers for most grades remained stagnant. Market sentiment continued to be weighed down by a sluggish Dalian Commodity Exchange and month-end destocking efforts.
Among the various grades, LLDPE film remained the weakest performer in both demand and pricing, as excessive local inventories—driven by a wave of recent plant startups—continued to pressure the market.
Despite these challenges, some sellers maintained cautious optimism, citing potential near-term price support from scheduled plant shutdowns between February and June. Over the second quarter, the PP sector is expected to bear the most significant production losses, estimated at more than 600,000 tons. HDPE and LDPE markets are also projected to experience notable reductions, with each expected to see losses exceeding 100,000 tons.
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Additional Hikes in Local homo-PP Market
In Indonesia, local traders raised homo-PP offers by an additional IDR 200,000–400,000/ton, disregarding the stable pricing guidance set by a major domestic producer earlier in the week. This marks the second consecutive week of price increases, driven by improved sales earlier this month as the previous price reductions temporarily revived buying interest.
However, the latest hikes faced strong resistance from buyers, who scaled back purchases in anticipation of the upcoming Ramadan holidays. With reportedly sufficient inventories, buyers remained reluctant to commit to fresh purchases, opting instead to wait for potential price corrections.
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