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Morning Briefing - 27 Feb. 2026Arbitrage window cracks Southeast Asia’s PE firming narrative |
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CommoPlast
Morning Briefing
27 February 2026
Brent: $70.75 (- $0.10)
WTI: $65.21 (- $0.21)
Naphtha CFR Japan: (+ $17)
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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Arbitrage window cracks Southeast Asia’s PE firming narrative
A widening price gap has reopened arbitrage flows, disrupting Southeast Asia’s fragile PE rebound. A major Saudi producer priced March LLDPE and LDPE $90-120/ton lower into China than Vietnam, a spread sufficient to cover freight and enable re-exports.
Those volumes are now resurfacing in Vietnam, allowing Chinese traders to undercut benchmarks while preserving margin. The additional supply strengthens buyers’ leverage against $950/ton-plus offers and could potentially cap further gains. Unless regional pricing is realigned, Southeast Asia risks becoming a steady outlet for surplus Chinese material, limiting any sustained upside.
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Shortages underpin Malaysia’s PP and PE second consecutive hike
Malaysia’s top producer raised PP and PE prices for the second consecutive month largely in line with market expectations, with PE grades up by MYR 50-100/ton and PP grades by MYR 100-130/ton, reflecting ongoing domestic supply tightness across select grades. Buyers have generally absorbed the increases, as limited availability continues to shape procurement decisions.
The company’s production schedule remains somewhat fluid, with certain lines offline for maintenance or operational reasons. These disruptions have delayed deliveries, with several local customers still expecting residual February cargoes to arrive over the coming week. Even as some operations resume, the overall supply outlook remains flimsy. Domestic buyers are likely to prioritise securing prompt volumes over negotiating on price, supporting a firm market tone well into March.
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