China Morning Snapshot – 02 May 2018

Dalian Commodity Exchange resumed trading on a strong note with September delivery contracts hit multi-weeks high levels. PP futures jumped CNY188/ton ($30/ton) to reach CNY9153/ton ($1230/ton without VAT). Meanwhile, LLDPE contract gained CNY110/ton ($17/ton) to reach CNY9390/ton ($1262/ton without VAT).   

Domestic spot PP and PE increased CNY100/ton ($16/ton) from the pre-holiday levels, which primarily supported by firmer futures trading and low inventory pressure among producers. Latest homo-PP offers in Eastern China reached CNY9000-9100/ton ($1209-1223/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China is traded in the range CNY9500-9700/ton ($1277-1304/ton without VAT) with the same payment and delivery term.  

Market is active on the first trading day after ChinaPlas Exhibition and the long weekend Labor Day holidays. However, most buyers are only checking on the latest offers instead of scouting for materials. Suppliers, on the other hand, show very optimistic expectation for the near term outlook citing the low inventories pressure.

“The number of real transaction is thin today, but the near-term demand prospect is rather bullish. Total PP and PE inventories at Sinopec and CNPC warehouses only reach 860,000 tons throughout the long weekend holidays and therefore we prefer to hold our offers steady for now,” a trader said.