Chinese players: Falling futures prices affecting spot sentiment

In China, Dalian Commodity Exchange opens the new trading day with drastic reduction in the morning session with LLDPE futures plunged CNY270/t ($41/t) compared to yesterday while PP futures down CNY175/t ($27/t). Player reported that domestic producers are still maintaining their price list stable, however, in the distribution market, traders are giving discount of CNY50-100/t ($8-15/t) to entice demand.

A trader in Xiamen commented, “Futures prices dived lower although international crude oil prices recorded an impressive gain last night. This morning, we feel the market sentiment starts to shift as buyers have replenished sufficient cargoes last week and prefer to be on the wait and see stance. We think that the sales speed could deteriorate in the coming days.”

 Another trader in Zhejiang added, “We have reduced our offers for PP twice this morning with total CNY130-150/t ($20-23/t) compared to yesterday after seeing large drop in futures market. Our regular customers are hesitating to make purchase now as they are monitoring for further market development before making decision.”

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