Economic Outlook

Week ending 03/11/23

Commodities
Crude Oil Prices
Extended Supply
Supply tightness by tightness by Saudi
Weak Demand
Saudi Arabia Arabia
100.000 War
96.550
95.000
Weak
Demand

90.000

85.000

84.890

80.000

75.000

70.000

Brent
Time Charter
• Tanker owners are familiar with
geopolitical doubts and know that
during such periods, charterers are
willing to pay higher rates to secure
tonnage for oil transportation
LR, SVR and RFR for Brent Crude Oil
Weekly Price Performance

Result

 Oil prices are now back to levels before the Hamas attacked Israel on October 7th, as concerns the conflict in the Middle East
would disrupt supply eased. At the same time, the demand outlook remains gloomy, with the ISM Services PMI for the US falling
more than anticipated while in China, the biggest importer, manufacturing fell back into contraction and the services sector grew
only slightly faster. Also, US crude stockpiles rose for a second week. Meanwhile, Saudi Arabia is expected to reconfirm the
extension of its voluntary oil-output cut of 1 million barrels per day through December. -1.19%

US natural gas futures traded around $3.5/MMBtu, as investors balance increased gas production and milder weather
against record gas flows to LNG export facilities. Natural gas production rose to 106.1 bcfd so far in November,
surpassing a record high of 104.2 bcfd in October. Looking ahead, meteorologists anticipate a shift to warmer-than-
normal weather from November 4-17. Meanwhile, gas flows to US LNG export facilities rose to an average of 14.8 bcfd
so far in November, up from 13.7 bcfd in October and a record 14.0 bcfd in April. At the same time, exports to Mexico
have been falling from September’s record, although there are expectations of an increase when New Fortress Energy's - 4.11%
Natural Gas plant starts exporting liquefied natural gas. The latest EIA report showed US utilities injected 79 bcf of gas into storage
last week, broadly in line with expectations. For the week, natural gas prices in the US are 1.6% higher, extending a
nearly 7% gain in the previous period.
Asian Petrochemicals: LDPE
The Asian LDPE market was down:

• Asian markets slow due to weak demand.

• Sources said there had been many export offers from the US and India to Southeast Asia and China, pressuring prices down.

• Capacity additions in China, India and the US were expected to add polymer supply to global export markets, when already

thin demand has prompted many producers to reduce output.

• LDPE used to be more expensive than HDPE due to its higher selling prices stemming from increased production costs and

snug supply previously, as many producers switched to making ethyl vinyl acetate as LDPE had higher margins. However,

EVA markets were also seeing a surplus these days.

• In South Asia, market participants said not much had changed since last week, with local prices low and supply ample.
Asian Petrochemicals: LLDPE
The Asian LLDPE market was down:

• The Asian LLDPE market was heard to have been down on weak demand.

• China PE prices were at a low level last seen in June this year, data by S&P Global Commodity Insights showed.

• The weakened Chinese yuan against the US dollar — the highest since November 2022 — was hurting imports.

• Consumers do not want to spend after seeing a pause in the Chinese economy due to the ailing property market.

• China’s housing market sales showed little sign of revival and is key for the economic growth outlook as it accounts for

about 20% of the country’s gross domestic product after including related industries.
Asian Petrochemicals: HDPE
The Asian HDPE market was down:

• Demand has been weak in Asia, with market participants citing a sluggish economic recovery in China as one of the key

reasons pressuring prices.

• Chinese state-owned oil giant Sinopec has signed a sale and purchase agreement to buy a 30% stake in a 1.25 million

mt/year polyethylene facility in Karabatan, Kazakhstan, near the Tengiz field (Atyrau region), state-owned KazMunaiGas

(KMG) said.
 CFR South East Asia
$1,150.00

$1,100.00

$1,050.00

$1,031.00
$1,000.00 $991.00

$971.00
$950.00

$931.00
$900.00

$850.00

LDPE G-P LLDPE Metallocene HDPE FILM HDPE BLMDG HDPE INJ
 China Domestic EXW
1297.8
1290.8
1262.8
$1,250.00 1262.8
1241.8 1234.8
1192.8
1192.8
1178.8
$1,150.00 1178.8 1150.8
1150.8

1094.8
$1,050.00 1059.8
1059.8
1059.8

$950.00

855.4
841.4
$850.00 826 826
848.4
813.4 812 812

$750.00
6/10/2023 13/10/23 20/10/23 3/11/2023

LDPE LLDPE HDPE FILM PP RAFFIA PVC ethylene PVC carbide

Petrochemical Crack-Spread
Economic News
 United States Fed Funds Interest Rate
• policymakers' dual focus on
returning inflation to the 2%
target while avoiding excessive
monetary tightening.
 ISM Manufacturing PMI The ISM Services PMI
The ISM Manufacturing PMI slipped to 46.7 in October of 2023 from the 10-
month high of 49 in the previous month, well below expectations of 49,
• The ISM Services PMI fell to 51.8 in October 2023,
pointing to the eleventh consecutive contraction in the US manufacturing the lowest in five months, and way below forecasts
sector. of 53
United States Non Farm Payrolls

• The US economy added 150K

jobs in October 2023, about half
of a downwardly revised 297K in
September, and below market
forecasts of 180K.
China NBS Manufacturing PMI
• The official NBS Manufacturing PMI in China unexpectedly fell to
49.5 in October 2023 from 50.2 in September, missing market
forecasts of 50.2 which highlighted that economic recovery in the
nation remained fragile with more support measures from the
government needed
China Caixin Manufacturing PMI
• The Caixin China General Manufacturing PMI fell to 49.5 in
October 2023 from 50.6 in September, missing market forecasts
of 50.8
Euro Area GDP Growth Rate
• The Euro Area economy shrank 0.1% on quarter in the three
months to September 2023, worse than market forecasts of a flat
reading and following an upwardly revised 0.2% rise in the
second quarter, preliminary estimates showed.
• The GDP in the Eurozone edged up a meagre 0.1% year-
on-year in the third quarter of 2023, the weakest reading
since the contractions in 2021, and below forecasts of
0.2%, preliminary figures showed. GDP Annual Growth
Rate in Euro Area averaged 1.58 percent from 1995 until
2023
 Euro Area Inflation Rate
• The inflation rate in the Euro Area declined to
2.9% year-on-year in October 2023, reaching
its lowest level since July 2021 and falling
slightly below the market consensus of 3.1%,
as a preliminary estimate showed.
• Russia's unemployment rate remained stable
at a historic low of 3% in September 2023, in
line with market expectations. The historically
low reading comes with Russia's economy
struggling through a severe worker shortage
due to the war in Ukraine, mobilization, and
emigration
India Manufacturing PMI

• The S&P Global India Manufacturing PMI

unexpectedly dropped to 55.5 in October 2023
from 57.5, missing market consensus of 57.7.
Saudi Arabia GDP Annual Growth Rate

• the economy of Saudi Arabia contracted by 4.5% year-on-

year in the third quarter of 2023, reversing a 1.2% growth
in the previous three-month period, preliminary
estimates showed. This marked the first contraction since
the first quarter of 2021
Turkey Inflation Rate

• The annual inflation rate in Turkey slowed slightly

for the first time in 4 months to 61.4% in October
2023, from 61.5% in the previous month, and
below market forecasts of 62.1%, due to the
diminishing impact of the lira's significant
depreciation over the summer and the tax
increases following the election
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