China Morning Snapshot – 08 June 2018

On Dalian Commodity Exchange, September delivery contract for PP is now traded above LLDPE despite both contracts remain strong throughout the first trading hours.  By the end of the morning session, PP contract reaches CNY9321/ton ($1256/ton without VAT) while LLDPE only achieves CNY9305/ton ($1253/ton without VAT).  

It is interesting that domestic traders started looking for competitive LDPE film cargoes citing a possibility of a rebound in the near term, considering the lack of Iranian material. In the meantime, demand for other grades remains mediocre.

Spot homo-PP in Eastern China sees CNY50/ton ($8/ton) increased to CNY9200-9300/ton ($1239-1253/ton without VAT), EXW China, cash equivalent.
Meanwhile, LLDPE film in Northern China is unchanged at CNY9300-9400/ton ($1253-1266/ton without VAT) with the same term. 

Total PP and PE inventories at Sinopec and CNPC’s warehouses fell 15,000 tons to approximate 695,000 tons as of 8 June 2018. “The lack of inventories pressure continue discouraging suppliers from conceding to large discount and with the current state of demand, we do not expect any major trend swing in the near term,” a market source said.