China Morning Snapshot – 19 June 2018

Dalian Commodity Exchange resumed trading after the Dragon Boat Festival on a rather soft note. PP contract for September delivery loses CNY106/ton ($16/ton) by the end of the morning session to CNY9156/ton (1224$/ton without VAT). LLDPE contract slipped CNY95/ton ($15/ton) to CNY9115/ton ($1218/ton without VAT) from last week.

Struggling with the persistently weak demand and low inventories pressure from local producers, traders continue offering another CNY50/ton ($8/ton) discount on both spot PP and PE to smoothen sales process.

Spot homo-PP in Eastern China reported at CNY9150-9300/ton ($1223-1243/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China at CNY9300-9350/ton ($1243-1250/ton without VAT) with the same term. 

“However, customers are not responding to the latest prices cuts. Market is more concern over the escalated trade war between China and the USA, and therefore, we have not been able to achieve any deal this morning,” a trader commented.

Total PP and PE inventories at Sinopec and CNPC warehouses rose 110,000 tons over the weekend to approximate 795,000 tons as of 19 June 2018. Sources are not expecting any major changes in the sentiment in the coming days.