China Morning Snapshot – 18 May 2018

Dalian Commodity Exchange opened on a firmer note and remained range-bound throughout the morning session. September delivery contract for PP ended the first half of the trading day gaining CNY66/ton ($10/ton) at CNY9202/ton ($1237/ton without VAT) while LLDPE increased CNY55/ton ($9/ton) at CNY9365/ton ($1259/ton without VAT).

Trading activities in domestic spot market hold soft though traders are offering up to CNY100/ton ($16/ton) discount on both PP and PE cargoes with hope to attract purchasing interest. “We might have to offer additional discount in the coming day if buyers remain reluctant to discuss deals. We are a bit concern about LLDPE film as a number of import cargoes are arriving the market, easing the supply concern,” a trader informed.

Total PP and PE inventories at Sinopec and CNPC warehouses fell 10,000 tons from the previous trading day to approximate 750,000 tons as of 18 May 2018. At the time this report is published, spot homo-PP in Eastern China is traded at CNY9150-9250/ton ($1230-1243/ton without VAT). Meanwhile, spot LLDPE film in Northern China stand at CNY9550-9700/ton ($1283-1304/ton without VAT).