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The January 2026 contract PP and LLDPE futures on the Dalian Commodity Exchange traded within a narrow range on Tuesday, softening slightly toward the end of the morning session. This came on the back of second consecutive day of rally in the previous trading session. 

Total domestic inventory eased by 35,000 tons from the previous trading day to 735,000 tons as of 2 December.

Domestic producers raised PP and LLDPE prices in line with the stabilisation in futures, though buying interest remained limited. Sellers reported that many customers were still negotiating and reluctant to commit, reflecting cautious sentiment across the value chain.

A market participant noted that PP demand appeared slightly stronger than LLDPE on a needs-based basis, driven partly by firmer end-product margins among PP converters. By contrast, PE buyers remained concerned about potential supply pressure from upcoming import arrivals, especially with several non-US LLDPE cargoes recently reported below the $800/ton CFR China threshold.

Producers are also facing rising upstream ethylene costs, which market sources said have narrowed the scope for further discounts and contributed to a tentative price floor emerging across both PP and PE.

With year-end approaching, market players continued to prioritise risk management, aiming to avoid heavy month-end exposures. While both PP and PE show early signs of stabilisation, participants said confirmation of a sustained bottom would depend on clearer demand signals, import arrivals in December, and inventory behaviour over the coming week.

Written by: Kat Yun Yun

Edited by: Aiman Haikal

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China