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Despite a strong surge in the energy complex, Dalian Commodity Exchange remains relatively soft throughout the morning session. September delivery contract for LLDPE continue to shred CNY25/ton ($4/ton) from the previous session to CNY9535/ton ($1290/ton without VAT). There are almost no changes in PP contract, closing at CNY9260/ton ($1253/ton without VAT).   

The stiff resistance and weakened futures trading have encouraged local traders to introduce CNY50/ton ($8/ton) discount on spot PP and PE cargoes. At the time this report is published, spot homo-PP in Eastern China has reached CNY9200-9300/ton ($1245-1259/ton without VAT), EXW China, cash equivalent in Eastern China.

In Northern China, spot LLDPE film is traded at CNY9650-9800/ton ($1306-1326/ton without VAT) with the same payment and delivery term.    

No major changes in term of spot offers are expected as tight supply and strong upstream costs continue to support the sentiment. In the meantime, customers are slowing down replenishment activities as prices have surged beyond acceptance levels, which are eating into profit margins.