China Morning Snapshot – 30 May 2018

Dalian Commodity Exchange remains on the stable to firmer track by the end of the morning session. September delivery contract for PP added only CNY38/ton ($6/ton) from the previous session to CNY9189/ton ($1232/ton without VAT). Meanwhile, LLDPE futures are unchanged at CNY9225/ton ($1237/ton without VAT).       

It appears that all effort to increase spot offers are ended in vain and though spot PP and PE prices remain stable today, traders are willing to negotiate with serious buyers. Demand for PE cargoes, especially LLDPE and LDPE film is reported to be weak, which continue putting pressure on suppliers despite surging upstream ethylene costs.

Spot LLDPE film traded in Northern China in the range CNY9350-9500/ton ($1254-1274/ton without VAT).

Spot homo-PP traded in Eastern China in the range CNY9050-9300/ton ($1213-1247/ton without VAT), EXW China, cash equivalent.   

“Supply is tight and upstream costs are high, however, supplier’s main objective is to keep only a safe level of inventories given the uncertainties on the demand prospect. And therefore, it is difficult to implement any large price increases,” a market source commented.