Morning Briefing - 09 May 2025
CommoPlast
Morning Briefing
09 May 2025
Brent: $62.84 (á $1.72)
WTI: $59.91 (á $1.84)
Naphtha CFR Japan: â $8
Ethylene CFR NEA: â $10
Ethylene CFR SEA: Stable
Propylene FOB Korea: â $10
Propylene CFR China: â $5
*Data represent closing prices of the previous trading day
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Shipping Bottleneck
According to Bloomberg data, the number of cargo vessels departing Chinese ports bound for the United States has dropped sharply—from a peak of 73 in mid-April to just 47. Despite this significant decline in demand, freight rates have held firm, largely due to decisive capacity management by carriers. Operators have responded swiftly with widespread blank sailings and service suspensions, effectively tightening supply to match reduced volumes.
However, two key risks are emerging for the petrochemical sector.
Firstly, any diplomatic breakthrough between the US and China that results in eased trade restrictions could trigger a swift rebound in freight demand. A surge of this nature would likely strain vessel availability and drive spot rates sharply higher, potentially introducing significant cost volatility for exporters and importers alike.
Secondly, the sustained reduction in vessel arrivals may contribute to a tightening of shipping equipment—particularly containers—at US ports. Market participants have warned that this could lead to rising outbound freight costs from the US. For US-origin PE, this presents a critical threat: higher logistics costs could undermine its competitive edge in global markets. Furthermore, extended transit times and potential shipment delays would add to the logistical uncertainty facing exporters.
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Middle Eastern LLDPE film showed restrained reductions in Malaysia
Import offers for Middle Eastern LLDPE film to Malaysia posted only modest declines this week, with at least two producers reducing their price lists by a measured $20/ton from previous levels. Market sources attributed the limited nature of the price cuts to persistent supply constraints within the domestic market, which have lent some support to import values despite broader regional softness.
“However, the price gap between Malaysia and other Southeast Asian markets remains too wide to justify purchases at current levels,” one converter remarked. “We’ve yet to submit any firm bids—our buying indications are below the $950/ton mark on a CIF basis.”
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