China Morning Snapshot: 13 March 2018

Futures market on Dalian Commodity Exchange remained soft throughout the morning session. PP contract reduced CNY18/ton ($3/ton) to CNY8908/ton ($1203/ton without VAT) while LLDPE decreased CNY15/ton ($2/ton) to CNY9210/ton ($1244/ton without VAT). 

Spot traders are attempting to hold PP and PE offers stable day on day, however, some are opening to CNY50-100/ton ($8-16/ton) discount to attract buying interest. Spot homo-PP in Eastern China stans at CNY‎‎‎8750-8900/ton ($‎‎1181-1202/ton without VAT), EXW China, cash equivalent, while LLDPE film in Northern China is traded at CNY9050-9400/ton ($‎‎1222-1269/ton without VAT), with the same term.

Total PP and PE inventories at major domestic producers’ warehouses fell 15,000 tons to approximate 990,000 tons as of 13 March 2018, which is much slower than usual. The overall demand condition remains light and with persistent inventories pressure, it is very likely that local suppliers might provide more discount in the near term. The market is watching out for potential impact on the import ground.