Holiday mood intensifies in China's PP, PE market

It is less than week before the Lunar New Year officially start and most Chinese players have started leaving their desks to return hometown. Trading activities are diminishing in a faster rate than expected despite all suppliers’ effort to boost the number of deal.

A trader in Ningxia is struggling to find buyers for 400 tons of material the source is having on hand. The trader commented, “We decided to hold the cargoes for post holiday because there is no truck available at the moment for delivery.” It is reported that most logistic companies have announced today as final working day before the holidays and would only resume operation on 3 February 2017.

Besides, discussing with several traders, who are active in both spot and futures market, it is found that many are engaging in pre-selling cargoes for post-holiday delivery in order to secure a safe cash flow after heavy speculation on futures market previously. A source informed, “We are offering homo-PP at CNY200-300/ton ($29-44/ton) lower than market level in the past few days, however, our buyers are not very enthusiastic as most have entered the holiday mood.”

The remaining traders in the market are raising concern over the supply condition in the post holiday period as domestic inventories are piling up in addition to the arrival of imported cargoes, which cause port congestion this week. Hope for healthy replenishment activities in the second half of February remain strong.