A Chinese trader based in Qingdao revealed to SSESSMENTS.COM that a sudden drop in crude oil and futures prices has raised a huge concern among Chinese market players. Coming to the last trading day of the second week of June, Chinese converters retreated to the sidelines to see how everything plays out and to monitor the market development before taking the next decision.
Upstream, crude oil prices have been rallying on the back of an uptick in demand, coupled with record supply cuts, but gains were capped by a sudden jump in US inventories, the downbeat economic outlook from the Federal Reserve, and fears over a second wave of coronavirus cases. As such, crude oil prices recorded their biggest one-day loss in more than six weeks, dropped by more than 8% on Thursday, June 11. US West Texas Intermediate crude futures fell 8.2%, or $3.26, settling at $36.34 per barrel. International benchmark Brent crude edged down 7.7%, or $3.22, to trade at $38.51 per barrel. The recent drop, in turn, has sent futures prices spiralling downward. On June 12, SSESSMENTS.COM noted that September LLDPE futures prices on Dalian Commodity Exchange settled at CNY6,580/ton ($931/ton), posting a reduction of CNY80/ton ($11/ton) compared to Thursday’s settlement.
In the wake of a recent drop in crude oil and futures prices, the Qingdao-based trader revised down its local LLDPE Film C4 offers further from a day earlier. On Friday morning, the trader applied a price reduction of CNY50/ton ($7/ton) on local LLDPE Film C4 cargoes, while maintaining a stable offer level for localized Iranian HDPE Film and LDPE Film from Thursday’s level. The trader remains uncertain on pricing and demand outlook due to market volatility, SSESSMENTS.COM was informed.
