China Morning Snapshot – 12 July 2018

Dalian Commodity Exchange firmed up further throughout the morning session. PP futures gained CNY38/ton ($6/ton) to CNY9246/ton ($1191/ton without VAT) while LLDPE increased CNY15/ton ($2/ton) to CNY9240/ton ($1191/ton without VAT).

Thanks to the consistent recovery in the futures market, spot PP and PE continue to hike CNY50/ton ($8/ton) day on day, yet buyers are not very well receptive towards the increases, leading to the weak transaction. 

At the time this report is published, spot homo-PP in Eastern China stands at CNY9200-9300/ton ($1186-1198/ton without VAT), while spot LLDPE film Northern China reaches CNY9300-9350/ton ($1198-1205/ton without VAT), all based on EXW China, cash equivalent.

On the surface, the Dalian Commodity Exchange seems to immune from the on-going trade conflict between China and the USA, however, real demand in the country is not very strong at this point of time. “This is partially due to the off-peak season and also concern over the near-term outlook,” a market source said. As a result, a big question that players are putting on the market at the moment is that would the current firm trend sustain in the coming week?