China Morning Snapshot – 06 July 2018

Dalian Commodity Exchange for PP and LLDPE extended weak trend throughout the morning session. PP contract for September delivery reduced CNY55/ton ($8/ton) to CNY9113/ton ($1178/ton without VAT) while LLDPE decreased CNY45/ton ($7/ton) to CNY9150/ton ($1183/ton without VAT).

At the time this report is published, spot homo-PP in Eastern China at CNY50/ton ($8/ton) lower than yesterday at CNY9100-9250/ton ($1176-1196/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China reduced CNY50-100/ton ($8/ton) to CNY9200-9300/ton ($1189-1202/ton without VAT) with the same term.

As trade splash between China and the USA officially take place, Chinese players are taking a step back from the market to monitor further movement. Total PP and PE inventories at Sinopec and CNPC’s warehouses pile up 20,000 tons day-on-day to approximate 690,000 tons as of 6 July 2018. “Trading activities are totally stalled. We are waiting to see retaliation from the Chinese government and would end product business affected. The futures market is expected to fall further in the coming days,” a trader said.

** It is corrected that total inventories at Sinopec and CNPC’s warehouses on 5 July 2017 was at 670,000 tons.