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The local PP and PE market in China return to the downward slope after a brief rebound due to a confluent of factor including falling energy complex and futures market, and persistently weak demand. 

Data from CommoPlast showed that the average price for domestic homo-PP yarn, LLDPE and LDPE film based on EXW China fell about $20-25/ton from last week with homo-PP yarn is at the new low for 2019. Meanwhile, HDPE film prices dropped approximately $15/ton.  

Futures contracts for September delivery on Dalian Commodity Exchange fell three consecutive sessions since the beginning of the week to multi-year low levels and hurts sentiment in the spot ground. Buyers refrain from making large replenishment despite the fact that the market is off for Dragon Boat Festival on 7 June 2019. 

“We were expecting to see pre-holiday replenishment activities, however, customers remain very reluctant to purchase beyond the immediate need. Negotiation is very fierce,” a trader said. 

The effect of the escalated trade war with the USA started to take shape and it is informed that many converters in the PE packaging are lowering operating rate amid the lack of end product orders. Meanwhile, the spreading African swine fever that killed more than 17 million pigs in the country has hit the animal feed industry badly. 

“The near term market outlook remains very bearish. June is the off-peak season and we are looking forward to the third quarter when demand normally picks up,” a trader commented. 

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China