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Watch: Market Movers, Feb 27-Mar 3: Bearish polyethylene & polypropylene outlook, potential policy changes in Japan & China

What’s keeping LNG traders busy as China’s peak demand season ends? Why does the outlookfor polyethylene and polypropylene seem bearish? And what would spur discussions of new trade routes for ethanol and sugar markets? Editor Abache Abreu looks at this and other factors that could drive commodity markets this week.

Join our conversations on Twitter - use #PlattsMarketMovers and connect with us.


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Video Transcript


Market Movers, Feb 27-Mar 3: Bearish polyethylene and polypropylene outlook, potential policy changes in Japan and China

By Abache Abreu, Senior Editor, Oil News and Analysis, Asia

Welcome to Platts Market Movers, your quick look at what the week ahead holds for the Asian commodity markets.



Highlights: China's peak demand season for LNG ends, outlook for polyethylene and polypropylene, and the buzz at the sugar conference in Bangkok

This week:

  • find out what’s keeping LNG traders busy as China’s peak demand season ends
  • why the outlook seems bearish for polyethylene and polypropylene
  • and what will dominate market discussions at the sugar conference in Bangkok.


But first, in oil - the focus is on China. Import and export data are out. With a narrow Brent/Dubai Crude EFS spread, and lower output from the Middle East, traders had been expecting a rise in imports from the Atlantic. Volumes from North America did rise, but this was more than offset by a drop in imports from the UK.


The question is: Are North American imports here to stay and give Chinese refiners an extra supply source?


Also in China, market players will continue to monitor potential policy changes on coal production. Analysts estimate an output cut of at least 65 million tons for this year if output restrictions are introduced.


More on policy changes -- this time in Japan, where METI is holding a meeting today which is expected to throw some light on the country’s changing refining regulations.



China's peak winter demand for LNG ends


Moving on to gas, LNG traders are closely watching Sinopec. The Chinese buyer was heard to be marketing volumes from the Australia Pacific LNG plant, as China's peak winter demand comes to an end.


The news comes amid a ramp-up in production globally, including Sabine Pass in the US Gulf.



Polyethylene and polypropylene inventories at multi-year highs


Speaking about oversupply, the near term outlook seems bearish for polyethylene and polypropylene, with inventories hitting multi-year highs.


Meanwhile, PVC demand is expected to remain robust and peak by April, driven by India's push to further develop infrastructure.



Market players could be looking at new trade routes after China’s hike in ethanol import duties


In the agriculture markets, China’s hike in ethanol import duties is expected to spur discussions of new trade routes during an ethanol and sugar conference in Bangkok this week.


On wheat, Southeast Asian millers are eying competitive prices for Black Sea material. Buying decisions will depend on: one, the strength of the Russian ruble, and two, freight rates.



Will Malaysia lift or extend its ban on bauxite exports?


Moving on to metals, Malaysia’s ban on bauxite exports is due to end in mid-March, after being extended several times since January last year. There are mixed expectations on whether the ban will be extended yet again.


What do you think, is Malaysia ready to resume bauxite exports next month?


Join our conversations on Twitter with the hashtag PlattsMarketMovers. Thanks for kicking off your Monday with us, and have a great week ahead.