Morning Briefing - 03 Jul. 2025
CommoPlast
Morning Briefing
03 July 2025
Brent: $69.11 (á $2.00)
WTI: $67.45 (á $2.00)
Naphtha CFR Japan: á $2
Ethylene CFR NEA: Stable
Ethylene CFR SEA: Stable
Propylene FOB Korea: Stable
Propylene CFR China: Stable
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Chinese PP Producers Trimmed Export Offers Amid Weakened Demand
Chinese PP producers have continued lowering export offers this week in a bid to stimulate tepid overseas buying interest, as domestic demand shows further signs of softening.
According to the latest data from CommoPlast, offers for homo-PP yarn and injection currently stand at $880–900/ton FOB China, with additional volume-based discounts available.
However, response from international buyers—especially in Southeast Asia—has been notably muted. Market sentiment in the region remains clouded by growing supply pressure and lingering uncertainty over US trade policy developments.
Back home, spot homo-PP prices in China have resumed their downward trajectory, ending a three-week uptrend that was largely driven by geopolitical tensions in the Middle East. That said, the price correction has been mostly limited to the upper end of the range, with the lower bound still holding firm above the psychologically important CNY 7,000/ton mark.
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Vietnamese Market Participants Braced for VAT Cuts
The Vietnamese government has officially enacted a Value Added Tax (VAT) reduction from 10% to 8%, effective from 1 July 2025 through 31 December 2026, in a move designed to stimulate domestic consumption and support economic recovery over the next 18 months.
While the new policy initially sparked confusion, authorities have since clarified that polyolefins are eligible for the reduced VAT rate. However, industry players now face a different kind of friction at the commercial level.
According to several trading houses, many buyers are demanding a 2% discount on existing inventories to reflect the VAT adjustment—even though the affected stock had already been taxed at the original 10% rate. “This is not workable for us,” a trader explained. “We’re holding PP and PE offers steady for now, as the current cargoes were already subject to the previous VAT. Price revisions will only apply to new inventory going forward.”
On the contrary, some local traders are beginning to slash prices to reflect the tax relief, creating a fragmented and cautious sentiment across the Vietnamese polyolefin market.
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