China Morning Snapshot – 13 July 2018

Dalian Commodity Exchange reaches the highest level since 12 June 2018 this morning as both contracts for PP and LLDPE retain the firmness. September delivery contract for PP gained CNY51/ton ($8/ton) to CNY9309/ton ($1203/ton without VAT) by the break-time while LLDPE increased CNY65/ton ($10/ton) to CNY9315/ton ($1204/ton without VAT).  

Spot market is leveraging on the persistent recovery on Dalian Commodity Exchange with traders implemented addition CNY50/ton ($8/ton) hike on both PP and PE cargoes, however, buyers started complaining about the continuous price increment, resulted in slower trading activities.

Spot homo-PP traded in Eastern China in the range CNY9250-9350/ton ($1196-1208/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China stayed stable to CNY50/ton ($8/ton) higher at CNY9300-9400/ton ($1202-1215/ton without VAT) with the same term.

“Under the upward pressure resulted from stronger futures market and weakening Chinese Yuan against the US dollar, we have to lift local offers, however, sales started to drop as converters are unable to transfer the higher costs to end product prices,” a trader informed.

On the other hand, it appears that mulch film manufacturers in Northern China area might become more active entering the second half of the month as there have been reports that sales for LLDPE film in this area remain steady toward the weekend.