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As most Chinese players resumed working during the weekend, traders in the country have been reporting satisfactory trading activities. Indeed, buyers are replenishing material in anticipation of firmer prices in the near term, considering the current energy and futures markets. This has resulted in a reduction of domestic inventories at major producer’s warehouse by approximate 18% or 140,000 tons over the past two days, private data showed.

Local PP and PE market therefore has been escalating since buyers returned, accumulating a total increase of about CNY300/ton ($45/ton) since last Saturday. A trader in Xiamen informed, “We managed to sell very well in the past two days and we still receiving very good number of purchase inquiries today. Sentiment is firm thanks to the futures market and low inventories pressure from local producers. We think this condition might sustain throughout this week.”

Another converter added, “We purchased some quantity on Saturday and at the moment we have sufficient material for the next 15 days. We are monitoring further market development before deciding on additional quantity, while also giving ourselves time to attract more end product orders.” 

It is reported that the tightness in local LDPE film supply remains in place as the restart of major plant has yet to ease the condition. By the time this report is published, several traders in the country reportedly suspended all their offers with hope to achieve better prices in the next trading day.

Market players are also expressing their concern over the near term outlook, pointing to the fact that buyers might take a break from aggressive replenishment next week. For this, the question for the sustainability of the current trend is put under the limelight.