China Morning Snapshot: 28 February 2018

PP and LLDPE futures ended the volatile morning session on a soft note. May delivery contract for PP loses CNY14/ton ($2/ton) to CNY9160/ton ($1237/ton without VAT) while LLDPE closed at CNY9485/ton ($1281/ton without VAT), a reduction of CNY10/ton ($2/ton).   

There has not been any major movement in domestic spot market, while the overall sentiment hold relatively steady. Traders in Eastern China continue to offer CNY50/ton ($8/ton) cuts on homo-PP cargoes, to CNY‎‎‎9000-9100/ton ($‎‎1215-1229/ton without VAT), EXW China, cash equivalent – which is more competitive than import materials at the moment.

In Northern China, local LLDPE film offers remain mostly stable at CNY9300-9500/ton ($‎‎1256-1283/ton without VAT), though traders are willing to negotiate with serious buyers.

Purchasing activities are not high, yet total PP and PE inventories at domestic producers’ warehouses fell nearly 70,000 tons to approximate 920,000 tons. Traders are claiming that such situation take place due to the monthly allocations are due to collect, and that cargoes are simply being transferred from producers to traders’ warehouses.

“There are some inventories pressure, however we think the condition is manageable as we have pre-sold some quantity for March delivery. Buyers might return fully after the Chap Goh Mei, hence we do expect to see better buying interest in the coming week,” a trader said.