Chinese players: Trade fell on inertia demand

After three consecutive days of strong buying interest, Chinese players reported seeing slower trading activities today, which many attributed to the psychological effect from falling energy and futures values.

Fresh price lists from local producers indicated another CNY50-100/ton ($8-16/ton) hike from yesterday, however, distributors find it difficult to close deals on the fourth trading session of the week. A trader in Guangdong offers regular homo-PP at CNY7150/ton ($925ton without VAT) EXW China, cash term said, “Our sales hit the peak on Monday, and we are free from inventories pressure at the moment. We have no plan to reduce prices in the near term albeit visible slow down in purchasing activities. In fact, we have not been able to achieve any sales today.”  

Another trader in Linyi added, “Our regular customers appear to have stocked up sufficiently, from which there is very limited number of purchase inquiries for LLDPE film today. Yet, we decided to hold firm on our prices following higher price lists from local producers.”

Players, however, are not expecting any downtrend in the near term based on justification that sellers have mostly depleted on hand inventories, freed them from sales pressure. Indeed, traders are looking at a more stable trend for the remaining of June.