China Morning Snapshot: 22 February 2018

Dalian Commodity Exchange opens the first trading day after the week-long Lunar New Year holiday on relatively soft notes. May delivery contract for LLDPE ended the first half of the trading session gaining only CNY65/ton ($10/ton) at CNY9570/ton ($1288/ton without VAT). On the other hand, PP contract loses CNY11/ton ($2/ton), reaching CNY9299/ton ($1252/ton without VAT).

There are very limited trading activities in domestic spot market. While there are no price adjustments from producer’s side, traders are offering CNY50-100/ton ($8-15/ton) discount to entice buying interest. Homo-PP in Eastern China stands in the range CNY‎‎‎9150-9300/ton ($‎‎1232-1252/ton without VAT). In Northern China, LLDPE film traded at CNY9450-9550/ton ($‎‎1272-1285/ton without VAT), all based on EXW China, cash equivalent.    

Many players are still on holidays, including logistics companies, which depict a slow market sentiment for the remaining of the week. It is reported that total PP and PE inventories at major domestic producers’ warehouses surged to approximate 1.08 million tons as of 22 February 2018 – much lower than the same period last year. Traders therefore are not seeing any drastic price cuts in the near term given the moderate inventories pressure at suppliers’ side.