China Morning Snapshot – 23 May 2018

Dalian Commodity Exchange tracked a weak trend throughout the morning session. September delivery contract for PP ended the first half of the trading day losing CNY91/ton ($14/ton) to CNY9212/ton ($1245/ton without VAT) while LLDPE decreased CNY50/ton ($8/ton) to CNY9320/ton ($1259/ton without VAT).

The weakness in futures trading continues casting a shadow on spot ground, especially the LLDPE film market, which again sees a CNY100/ton ($16/ton) reduction from the previous trading day to CNY9500-9600/ton ($1284-1297/ton without VAT).  

In contrast, the spot homo-PP market remained unaffected and latest offers in Eastern China hold steady at CNY9150-9250/ton ($1236-1250/ton without VAT), EXW China, cash equivalent.

There are multiple factors that could have a positive impact on the market including firm upstream costs, limited supply and delay in cargoes clearance; however, demand is not lending a hand. “We fear that more discount would emerge on the near term as suppliers rush to fulfil monthly target while futures market remains floppy,” a market source said.