Morning Briefing - 05 June 2025
CommoPlast
Morning Briefing
05 June 2025
Brent: $64.86 (â $0.77)
WTI: $62.85 (â $0.56)
Naphtha CFR Japan: á $1
Ethylene CFR NEA: Stable
Ethylene CFR SEA: Stable
Propylene FOB Korea: Stable
Propylene CFR China: Stable
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Malaysian PE Market Under Pressure on Macroeconomic Uncertainties
The Malaysian PE market is grappling with mounting pressure as macroeconomic uncertainties weigh heavily on sentiment. June price reductions from two major local producers have done little to lift the market, which remains subdued due to a combination of lacklustre demand, rising supply projections, and ongoing concerns over trade negotiations with the United States.
Market participants report that downstream manufacturers, particularly in the packaging sector, are currently operating at just 60–70% of capacity, with no immediate plans for significant restocking.
Adding to the cautious outlook is the anticipated restart of the PrefChem mega complex, slated for the second half of June. The plant, which has been offline since earlier this year, contributed to recent supply tightness in certain PE grades. Its return is expected to ease those constraints but could further pressure domestic prices amid already weak demand.
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Heightened Feedstock Security Risks
Heightened regulatory scrutiny from the United States has triggered fresh concerns over feedstock security for global petrochemical players, particularly in China. According to media reports, US authorities have formally issued notices requiring ethane exporters to obtain export licences — a move aimed at strengthening national export controls.
Enterprise Products Partners LP disclosed that US regulators intend to deny licences for three planned ethane cargoes bound for China, totalling 2.2 million barrels.
This development is set to disrupt trade flows, forcing US producers of ethane to seek alternative markets. For China, which depends heavily on US-sourced ethane for petrochemical production as well as for heating and cooking, the move threatens to inflate costs and strain supply chains.
Reflecting market anxieties, key LLDPE futures on the Dalian Commodity Exchange rebounded at the opening on 5 June, driven by mounting fears over feedstock availability for domestic petrochemical plants.
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