China Morning Snapshot – 31 May 2018

Dalian Commodity Exchange is mixed this morning. PP contract entered the break-time gaining CNY18/ton ($3/ton) to reach CNY9194/ton ($1236/ton without VAT). Meanwhile, LLDPE contract loses CNY5/ton ($1/ton) from the previous session to CNY9210/ton ($1239/ton without VAT).

There are two points that players are taking serious based on the futures trading results in the first half of the day. The first is that futures market has not found support to generate any strong rebound and the second; both PP and LLDPE futures are traded on the same par, signalling the weakness in LLDPE market.

Spot offers remain largely unchanged from the previous trading day at CNY9150-9250/ton ($1231-1244/ton without VAT) for homo-PP in Eastern China market. 

In Northern area, spot LLDPE film is traded in the range CNY9350-9500/ton ($1257-1278/ton without VAT).

Traders are portraying the disappointment with the sales results in recent days despite being open to negotiation with serious buyers. “We only managed to sell some quantity for PP today. Customers only source cargoes hand-to-mouth basis and therefore, it is difficult to introduce any hike though supply is tight,” a trader said.

Total PP and PE inventories at Sinopec and CNPC did not change from the previous trading day, remaining at 720,000 tons as of 31 May 2018.