Morning Briefing - 08 October 2024Although local traders have not yet reacted to the latest price list issued by the producer, market sources suggest that significant upward pressure is building due to the weakening exchange rate, rising crude oil prices, and growing bullish sentiment in China. |
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CommoPlast
Morning Briefing
08 October 2024
Brent: $80.93 (+ $2.88)
WTI: $77.14 (+$2.67)
Naphtha CFR Japan: + $28
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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The local PP and PE markets in Indonesia saw marginal price increases at the start of the week, driven by the depreciation of the Indonesian Rupiah against the US dollar and a cautiously optimistic regional outlook.
According to Oanda data, the Rupiah has depreciated by approximately 3.3% since early October 2024, falling to 15,640 against the dollar as of 7 October. This currency depreciation typically exerts upward pressure on commodity prices denominated in Rupiah.
Although local traders have not yet reacted to the latest price list issued by the producer, market sources suggest that significant upward pressure is building due to the weakening exchange rate, rising crude oil prices, and growing bullish sentiment in China.
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The Asian naphtha market experienced a sharp rebound over the past week, largely driven by surging crude oil prices. However, trading sentiment in the downstream market remains relatively soft, putting naphtha cracking operators in a challenging position of margin erosion.
Naphtha, a critical feedstock for the Asian petrochemical industry, typically mirrors crude oil price movements. Since early October, Brent crude futures have surged over 11%, fueled by concerns over escalating geopolitical tensions in the Middle East and their potential impact on global oil supply. In response, spot naphtha prices climbed by 7.3%.
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