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Morning Briefing - 24 Feb. 2026Southeast Asia’s polyolefin markets are currently navigating a tug-of-war between ambitious producer targets and stark demand realities. |
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CommoPlast
Morning Briefing
24 February 2026
Brent: $71.49 (- $0.27)
WTI: $66.31 (- $0.17)
Naphtha CFR Japan: $614 (+ $3)
Ethylene CFR NEA: $705 (Stable)
Ethylene CFR SEA: $685 (Stable)
Propylene FOB Korea: $790 (Stable)
Propylene CFR China: $835 (Stable)
*Data represent closing prices of the previous trading day
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Indonesian producer pushed PP higher but converters resist amid fading Ramadan demand
Indonesia’s polymer market opened the week with firmer producer intentions but limited downstream follow-through, as a major domestic supplier raised PP offers while rolling over PE effective 21 February. The upward revision was attributed to tighter regional supply, though buying appetite remained muted amid fading Ramadan-Raya demand.
PP faced the most visible resistance as distributors largely held prices unchanged, citing difficulty in passing higher resin costs to contract customers, while converters prioritised destocking. Buyers increasingly turned to imports, where competitive parity capped domestic upside. The availability of attractively priced imports continues to anchor market expectations and limit producers’ ability to implement sustained increases. Regional production outages are also providing underlying support, but without a meaningful rebound in downstream consumption, broader price gains appear constrained in the near term.
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High utilisation at LSP reshapes regional polyolefin supply dynamics
Vietnam’s Long Son Petrochemical (LSP) has resumed a dominant position in Southeast Asia’s polyolefin market, operating at roughly 90% capacity following a 10-month shutdown that ended in mid-August 2025. While defending market share through aggressive run rates amid soft demand, the ramp-up heavily influenced parent SCG Chemicals' financials. The company reported a Q4 loss exacerbated by restart-related depreciation, but successfully returned to a full-year net profit in 2025. This turnaround reversed a severe 2024 deficit, driven by restructuring savings and reduced inventory drag, even as flat PE and weakening PP margins indicated that utilization has outpaced regional pricing power.
To further optimize its competitive position, LSP is advancing a $500 million ethane integration project targeted for startup before late 2027. By securing US ethane supply, the facility will be capable of utilizing up to 70% gas-based feedstock, significantly decoupling its production costs from naphtha volatility. In a regional market already grappling with structural oversupply, LSP’s sustained high operating rates combined with this impending structural cost advantage are positioned to exert prolonged pressure on Southeast Asian polyolefin balances, challenging competitors as broader demand recovery remains uneven.
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