Morning Briefing - 16 June 2025
CommoPlast
Morning Briefing
16 June 2025
Brent: $74.23 (á $4.87)
WTI: $72.98 (á $4.94)
Naphtha CFR Japan: á $36
Ethylene CFR NEA: á $10
Ethylene CFR SEA: Stable
Propylene FOB Korea: á $10
Propylene CFR China: á $8
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Asian Market Axiously Monitoring Middle Eastern Tensions
The Asian polyolefin market, which has remained largely subdued in recent weeks due to global trade policy uncertainties, is now facing renewed volatility. The sharp escalation in military exchanges between Israel and Iran has raised fears of a broader regional conflict in the Middle East, pushing crude oil prices to multi-month highs and reigniting concerns over potential ramifications for the polyolefin sector.
In China, major producers and trading houses have opted to withdraw all spot PP and PE offers, anticipating near-term price increases driven by surging energy costs and the risk of shipping disruptions. Shipping lines have flagged heightened war risks in the Strait of Hormuz and are reportedly preparing to raise insurance premiums. This has triggered expectations of higher export prices from Middle Eastern suppliers and potentially longer shipment lead times.
A similar sentiment has taken hold in Vietnam, where several trading houses have suspended new price quotations. Others have lifted spot PP and PE offers by VND 300,000–400,000/ton ($11–15/ton) on a day-on-day basis. Vietnam’s reliance on PE imports from the Middle East has left market participants particularly anxious over the possibility of supply disruptions.
Despite the initial price uptick, market players remain cautious. Many believe that the sustainability of any upward momentum in the regional PP and PE markets will hinge on the duration and severity of the Middle East conflict. Additionally, uncertainty surrounding the upcoming expiry of the US tariff moratorium, as well as regulatory changes in Malaysia and Vietnam, could dampen the market’s ability to absorb sharp price increases in the immediate term.
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