A local producer informed SSESSMENTS.COM that local PE and PP offers in China fluctuated over the week following the futures price movements. On the first two days of this week, local PE offers decreased by CNY100/ton ($14/ton) in general. While for PP, spot PP offers dropped between CNY100-200/ton ($14-28/ton) compared to last week. However, starting from Wednesday, offers for local PE and PP cargoes started to stabilize following the futures price movements. After a continuous decrease in the first two days of this week, futures prices captured stronger by Wednesday settlement. September 2020 PP prices in the Dalian Commodity Exchange increased by CNY53/ton ($7/ton) day on day, settling at CNY6,855/ton ($966/ton) by Wednesday (May 13) settlement. Likewise, September 2020 LLDPE prices in the Dalian Commodity Exchange increased by CNY30/ton ($4/ton) day on day, settling at CNY6,260/ton ($882/ton) by Wednesday (May 13) settlement. Since then, the futures prices remain firm.
Demand-wise, overall PE and PP sales at the producer’s end are quite satisfactory over the week. On the supply side, PP inventory in the domestic market is not ample as many coal-based plants are still producing fiber grades coupled with maintenance at several local producers’ PP plants. However, in March, traders booked big volumes of PP cargoes, which expected to arrive by the second half of May. As such, import PP prices might be under pressure due to ample supply. In contrast, the producer opined to SSESSMENTS.COM that domestic PP prices will only fluctuate at the current level.
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