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Local PP, PE prices cautiously up in China on higher futures

by ChemOrbis Editorial Team -
  • 16/05/2017 (12:17)
Players in China’s local PP and PE markets reported that prices have posted increases so far this week with support from higher futures markets. However, some players noted that they are hesitant about these recent hikes as the market sentiment is still weak.

On the Dalian Commodity Exchange, September LLDPE futures recorded a weekly increase of $52/ton on May 16 while September PP futures were $29/ton higher.

A Shanghai-based trader noted, “Local prices are inching up this week due to firmer futures prices. Although the number of inquiries has increased, the market sentiment is still cautious. We think this will be a short-lived rebound.”

Another trader commented, “Local prices increased given firmer futures market as well as higher offers from CNPC and Sinopec. Plus, several PP and PE plants are undergoing maintenances or planned to be shutdown, and this is also supporting prices. On top of that, we think local prices are displaying a rebound this week as they have dropped too much previously.”

A third trader said, “Particularly LLDPE futures rebounded this week mainly due to less supplies both in local and import markets. However, demand is expected to remain slow in the May-June period due to the low season. Therefore, we think that local prices are now rebounding after hitting the bottom without support from demand, although firmer futures and relatively reduced supplies justify the recent recovery to some extent. As for PP, we are not sure whether spot prices will continue to follow firmer futures either as demand is still weak.”

On the other hand, another trader expressed his positive expectations and opined, “We received slightly higher PP and LLDPE prices this week. As prices are expected to be stable or post increases due to maintenance shutdowns at PP and PE plants, we have decided to make some purchases now. We think that prices have already hit the bottom, they are likely to increase further in the near term.”
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