The modest discount of CNY 30/ton on homo-PP has incentivized market participants to increase their purchasing activity. In contrast, LLDPE has shown stronger transactions than homo-PP, driven by expectations of reduced import arrivals, which are expected to tighten domestic supply.
With key PP and LLDPE contracts on the Dalian Commodity Exchange regaining some stabilization from the downswing in the previous trading day, Chinese bidders were more confident in participating in auctioning for coal-based cargoes on the Shenhua Auction Platform.
Iran has long been China’s largest supplier of LDPE. However, escalating geopolitical tensions in the Middle East now pose significant risks to this supply chain. Iran’s oil and gas infrastructure has become a potential target for military strikes, which could severely disrupt petrochemical output.