China Morning Snapshot – 09 May 2018

Dalian Commodity Exchange opened the trading day on a strong note, however, loses most of the gain by the end of the morning session. September delivery contract for PP only inched CNY16/ton ($3/ton) higher to CNY9249/ton ($1252/ton without VAT). Meanwhile, LLDPE contract added CNY20/ton ($3/ton) to reach CNY9550/ton ($1292/ton without VAT).

The firming trend in domestic spot market continues to take place as suppliers in Eastern China lifted homo-PP prices by another CNY50-100/ton ($8-16/ton) day on day to CNY9250-9300/ton ($1252-1259/ton without VAT), EXW China, cash equivalent in Eastern China.

The Northern market, on the other hand, remains largely stable with spot LLDPE film prices ranging CNY9650-9850/ton ($1306-1333/ton without VAT) with the same payment and delivery term.        

Chinese players are generally holding positive expectation on the near-term outlook considering the strong upstream costs and persistent supply tightness stemming from a series of maintenance shutdown in the country. Total PP and PE inventories at Sinopec and CNPC fell 25,000 to approximate 765,000 tons as of 9 May 2018, underlining the stable purchasing activities in the country.