China Morning Snapshot – 22 June 2018

Sentiment on Dalian Commodity Exchange remains pretty weak throughout the morning session. PP contract for September delivery loses CNY82/ton ($12/ton) by the end of the morning session to CNY9023/ton ($1197/ton without VAT) while LLDPE plunged CNY115/ton ($18/ton) to CNY8960/ton ($1188/ton without VAT).

At the time this report is published, spot homo-PP in Eastern China fell CNY100/ton ($60/ton) from previous trading day to CNY9050-9100/ton ($1200-1207/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China stayed stable to CNY50/ton ($8/ton) softer at CNY9150-9300/ton ($1214-1233/ton without VAT) with the same term.

The active discounts emerge in spot ground in the recent day are not sufficient to draw buyers back to the market given that PP and PE sectors are generally combating the traditional slow season. Total inventories at Sinopec and CNPC’s warehouses dropped 20,000 tons day-on-day to approximate 755,000 tons as of 22 June 2018. 

“We started to allocate more quantity to the export market, however, overseas buyers are not very receptive towards the current prices. We could only commit to larger discount if the domestic market continues to inch lower in the coming day,” a trader said.