China Morning Snapshot – 01 June 2018

Dalian Commodity Exchange regains some strength this morning, however, remain much below market expectation. Entering the break time, September delivery contract for PP added CNY81/ton ($13/ton) to CNY9279/ton ($1236/ton without VAT). LLDPE contract also increased CNY85/ton ($13/ton) to CNY9285/ton ($1239/ton without VAT).  

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).

Despite stronger futures trend, spot sentiment remains quiet approaching the weekend. Buyers are mostly on the wait and see position doubting the revival of futures market during this traditional slow season. Joining the wagon is several producers in Northern China area, who are actively offering incentives to LLDPE film buyers with hope to stimulate purchasing activities, however, no satisfying results were achieved.  Due to persistently weak demand, total PP and PE inventories at Sinopec and CNPC’s warehouses piled up 20,000 tons from the previous trading day, reaching 740,000 tons as of 01 June 2018.