China Morning Snapshot – 21 June 2018

Dalian Commodity Exchange remains range bound whereby PP contract poses weaker trend than LLDPE with PP contract for September delivery loses CNY6/ton ($1/ton) to CNY9137/ton ($1214/ton without VAT). LLDPE contract ended the morning session gaining CNY20/ton ($3/ton) at CNY9105/ton ($1209/ton without VAT).

At the time this report is published, spot homo-PP in Eastern China is stable at CNY9050-9200/ton ($1202-1222/ton without VAT), EXW China, cash equivalent.

Spot LLDPE film in Northern China stayed stable to CNY50/ton ($8/ton) softer at CNY9200-9300/ton ($1222-1235/ton without VAT) with the same term.

Total PP and PE inventories at Sinopec and CNPC’s warehouses decreased 20,000 tons at 775,000 tons as of 21 June 2018.

Overall market sentiment this morning remain weak, however it is claimed to be comparatively better than past two days. Traders are facing difficulties to conclude deals meanwhile struggling for achieving their sales target for the month as next week will be entering month-end period again. There are expectations that these few days local producers will try to deplete their cargoes before month end, however, inventory pressure on the traders section will be higher. Continuous depreciation of RMB also causing import offers to lost competitiveness against domestic market even though prices move softer recently.