China Morning Snapshot – 11 July 2018

Dalian Commodity Exchange sustains the firming trend for the second day straight with September delivery contract for PP gained CNY43/ton ($6/ton) to CNY9236/ton ($1196/ton without VAT), while LLDPE increased CNY25/ton ($4/ton) to CNY9235/ton ($1195/ton without VAT). 

Spot homo-PP traded in Eastern China at stable to CNY50/ton ($8/ton) higher day-on-day, reaching CNY9200-9250/ton ($1191-1197/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China holds stable at CNY9250-9350/ton ($1197-1210/ton without VAT) with the same term.

Total PP and PE inventories at Sinopec and CNPC’s warehouses reduced 10,000 tons day-on-day to approximate 710,000 tons as of 11 July 2018. The trade conflict between China and the USA is entering a new height, stirring great concern among Chinese players. “Demand is very slow as converters refrain from keeping high inventories to avoid too much exposure to international trade tension,” a trader said.

In the meantime, local traders are putting strong effort to protect profit margins from the weakening local currency against the US dollar, which explained to the reluctance in cutting offers.