Market sources shared with SSESSMENTS.COM on Asia polymers market reactions following the US crude oil price crashes below zero for the first time ever in history. Following the supply glut due to the lockdowns and travel restrictions amid the Coronavirus pandemic, the U.S crude oil price settlement has crashed below zero for the first time in history. On Monday, April 20, the US crude oil futures for May settled at minus $37.63 per barrel. Oil supply continues to pile up while trading activities remain scarce, hence, the storage capacity is full.
Due to the current situation, SSESSMENTS.COM’s team noted that market players are showing different reactions. Some players prefer the wait-and-see stance to monitor the market movement further. Meanwhile, a Vietnamese trader lowered import PET Bottle offers of Indonesia origin twice within a day (April 21), with a total reduction of $30/ton from a week earlier as triggered by the crashes in crude oil prices. Regarding the situation, other sources opined that it would not give an immediate impact on the market as the prices are on the futures market.
As the news of crude oil prices crashed below zero came out, a marketing arm of a Middle Eastern producer informed SSESSMENTS.COM that a lot of customers are contacting the company asking for a price compensation as procurements were made at a higher price previously. Sources also added that buy ideas from Indonesian and Malaysian buyers for LDPE Film also dropped by $20/ton from the previous week following the plunge in crude oil prices. While in the China market, the offers for local and import PE cargoes across all grades were adjusted down following the recent drop in crude oil prices. Click here to read the complete story on China PE.
Market participants also reported to SSESSMENTS.COM that rumours have it ethylene price has broken $300/ton threshold with the current price as of April 21 recording in the range of $200-plus/ton. In view of the significant drop in the upstream market, a Malaysian converter is anticipating PE offers to reach $600/ton towards the end of April and gradually drop to $400-500/ton. An Indonesian trader also expressed a similar view stating that crude oil trend will remain bearish and with global lockdown as well as difficulty faced by producers to sell cargoes, polymer prices are likely to decline further.
In the days to come, market players opined that the international price trend would be in a downward trajectory following the crude oil prices slump. Other sources also expressed an opinion to SSESSMENTS.COM on the possibility for Brent crude oil prices to drop significantly trailing the U.S West Texas Intermediate (WTI).
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NewsSSESSMENTS: China PE Market Reacts To Record Lows US Crude Oil Prices
