China Morning Snapshot: 12 March 2018

Futures market on Dalian Commodity Exchange opens the first trading day of the week on relatively firm notes, however, unable to sustain the trend by the end of the morning session. PP contract slipped CNY95/ton ($15/ton) to CNY8894/ton ($1201/ton without VAT) while LLDPE decreased CNY115/ton ($18/ton) to CNY9200/ton ($1242/ton without VAT). 

The weak trend in spot ground continues to take place, as bearish futures trading shy away arbitrage buyers. Spot homo-PP in Eastern China area fell another CNY100/ton ($16/ton) from last Friday to CNY‎‎‎8750-8900/ton ($‎‎1181-1202/ton without VAT), EXW China, cash equivalent.

LLDPE film in Northern China faces a similar situation, traded in the range CNY9150-9400/ton ($‎‎1235-1269/ton without VAT), with the same term, a CNY50/ton ($8/ton) decreased.    

Total PP and PE inventories at domestic major producers’ warehouses surged to 1.01 million tons as of 12 March 2018 thanks to the weekend. Sales pressure among traders is becoming clearer and many fear about possible additional price cuts in the coming days amid slower than expected demand condition.

“Arbitrage traders are depleting on hand cargoes at below existing market levels, making difficult for us to compete. In the meantime, we do hope to see better purchasing activities in the near term,” a trader said.