China Morning Snapshot – 04 June 2018

The Dalian Commodity Exchange remains firm throughout the morning session. Entering the break-time, September delivery contract for PP added CNY67/ton ($10/ton) to CNY9311/ton ($1250/ton without VAT) while LLDPE contract increased CNY55/ton ($19/ton) to CNY9310/ton ($1250/ton without VAT).  

Sentiment in the domestic spot market has not improved in spite of the positive trading results on Dalian Commodity Exchange. Local traders attempted to hold spot PP and PE offers unchanged from last Friday and transactions once again are very disappointing.

“Buyers are still adopting a wait and see position leaving the market in a very sluggish condition. We are now open to negotiation with serious buyers with hope to deplete some cargoes this week,” a trader informed.

Total PP and PE inventories at Sinopec and CNPC’s warehouses rose 70,000 tons over the weekend to approximate 810,000 tons as of 4 June 2018. Market players fear that local inventories might continue to pile up if demand does not pick up.

At the time this report is published, spot homo-PP is traded in Eastern China in the range CNY9150-9250/ton ($1229-1242/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China stands at CNY9350-9500/ton ($1256-1276/ton without VAT) with the same term.