China Morning Snapshot: 23 March 2018

Affected by the outbreak trade war between USA and China, futures market on Dalian Commodity Exchange fell deep into the red-zone during the morning session. May contract for PP shred CNY184/ton ($29/ton) to close at CNY8593/ton ($1160/ton without VAT). LLDPE contract loses CNY135/ton ($21/ton) to CNY9205/ton ($1243/ton without VAT).

Sentiment in domestic market turned sour right after the news. However, thanks to stronger futures trade in the past two sessions, major domestic producers managed to digest nearly 30,000 tons of PP and PE inventories, bringing the total stock to approximate 900,000 tons as of 23 March 2018.

Nevertheless, spot traders are losing confidence in the near term, decided to implement larger price cut on both PP and PE parcels. A reduction of CNY100-200/ton ($16-32/ton) day-on-day is observed on homo-PP while LLDPE film down CNY50/ton ($8/ton).    

Spot homo-PP in Eastern China offered in the range of CNY‎‎‎8450-8600/ton ($‎‎1141-1161/ton without VAT).

Spot LLDPE film in Northern China at CNY9150-9350/ton ($‎‎1235-1262/ton without VAT), all based on EXW China, cash equivalent.