China Morning Snapshot – 09 July 2018

Dalian Commodity Exchange for PP and LLDPE extended weak trend throughout the morning session. PP contract for September delivery reduced CNY3/ton ($0.5/ton) to CNY9100/ton ($1185/ton without VAT) while LLDPE decreased CNY15/ton ($2/ton) to CNY9140/ton ($1190/ton without VAT).

The weak sentiment in the futures market continues casting effect on the spot ground. At the time this report is published, spot homo-PP in Eastern China fell another CNY50/ton ($8/ton) from last Friday to CNY9100-9200/ton ($1185-1198/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China in contrast, gains CNY50/ton ($8/ton) to CNY9200-9350/ton ($1198-1218/ton without VAT) with the same term thanks to better purchasing interest from agricultural film sector.

Sentiment is weak this morning with trade splash between China and the USA remains in focus. Though the impact on the petrochemical industry has yet to form any clear shape, players are wary of the real actions on the second product lists – which consist of mostly crude oil, petrochemical and packaging products. 

“As a result, we continue to source material hand-to-mouth to avoid any price and inventories risks. Demand for our end product might only improve in August and until then, we prefer to stay on the side-line,” a PP woven bag converter said.