China Morning Snapshot – 24 August 2021

September delivery contracts on Dalian Commodity Extended the firming trend, registering three digits hike during the first half of the trading day. The strong sentiment has also boosted spot prices in the local ground.

Details on the spot and futures prices are shown in the following table:

Compared to the previous day, total PP and PE stocks in China fell 35,000 tons to 740,000 tons as of 24 August 2021.

Chinese suppliers decided to lift spot PP and PE offers slightly following the hike on the futures market, however, the price decision pushes buyers further to the side-line while closing the export opportunity window. 

“The new price list is to reflect the futures market situation, not really about the actual demand. Our customers are very reluctant because they do not have large margins to accommodate higher raw material costs. The uptrend might not have enough support to sustain in the coming days,” a trader commented. 

As the month-end approaches, sources expected sellers to offer discounts or be open to negotiation to deplete more on-hand cargoes. In the meantime, the short trading month of September opens up a brighter expectation for pre-holiday replenishments.