China Morning Snapshot: 09 April 2018

May delivery contract for both PP and PE on Dalian Commodity Exchange started to gain more strength this week, adding three digits in value throughout the morning session. PP ended the first half of the trading day at CNY147/ton ($23/ton) higher, at CNY8936/ton ($1211/ton without VAT). LLDPE added CNY120/ton ($19/ton) to CNY9320/ton ($1262/ton without VAT).

Thanks to stronger futures trading, sentiment in local ground remains healthy after the long weekend holiday. Spot homo-PP offered in Eastern China market jumped CNY100-150/ton ($16-24/ton) to CNY‎‎‎8800-8950/ton ($‎‎1192-1212/ton without VAT).

Meanwhile, LLDPE film traded in Northern China at CNY9300-9500/ton ($‎‎1260-1287/ton without VAT), up CNY50-100/ton ($8-16/ton) from last week, all based on EXW China, cash equivalent.
    

Most players have resumed working on Sunday, 8 April 2018, which saw a satisfactory number of deals for both PP and PE. Total inventories at Sinopec and CNPC’s warehouse rose to 900,000 tons on 7 April but quickly reduced to 870,000 tons as of this morning. “We have almost sold out the daily allocation. The sentiment is so active and we expect this trend to sustain throughout the week,” a trader said.

Local supply might tighten in the near term amid heavy maintenance shutdown schedule in April, however, many have expressed the concern on the on-going trade tension between the USA and China, which could potentially hamper end product export.