China Morning Snapshot – 04 May 2018

Futures market remains relatively strong by the end of the morning session. September delivery contract for PP entered the break-time adding CNY20/ton ($3/ton) from the previous day to CNY9212/ton ($1240/ton without VAT). LLDPE contract also gained CNY70/ton ($11/ton) to reach CNY9505/ton ($1279/ton without VAT).    

Chinese buyers remain conservative about making fresh replenishment given comfortable on-hand inventories from the pre-holiday purchases. However, this condition has not prevented local suppliers from keeping firm stance on the spot cargoes.

In fact, latest offers for spot PP and PE signal CNY50/ton ($8/ton) hike day on day, bringing homo-PP prices to CNY9100-9250/ton ($1225-1245/ton without VAT), EXW China, cash equivalent in Eastern China.

In the Northern market, LLDPE film is offered in the range CNY9550-9750/ton ($1285-1312/ton without VAT) with the same payment and delivery term.  

“Buyers are resisting the continuous firming trend in recent weeks. In the meantime, we are not expecting domestic producers to commit to any large discount given the lack of inventories pressure. There are still a number of PP and PE plants entering maintenance shutdown this month, which might keep the market on the firm track,” a trader said, adding that he offered CNY20/ton ($3/ton) discount on spot homo-PP yarn and only can attract a few deals.