The reason for appropriate replenishment is that there is still support in the short term

The reason for appropriate replenishment is that there is still support in the short term.

First of all, there is profit margin given current low offers from suppliers, which means that traders have relatively low import cost. Taking LLDPE as an example, the current mainstream price is around $910-940/mt CFR, and some high prices are above $950/mt CFR. The supplier's selling price is basically lower than the current market price. It is heard that the Middle East near-term supply is about $880-890/mt. Compared with the market price, there is still a certain profit margin. The duty-free Thailand-origin LLDPE is offered at $950-960/mt, and except for the back-to-back offers, most offers are near $950-970/mt, there is still some arbitrage space.

Second, the current price difference between imported and domestic market is shrinking. Taking LLDPE as an example, from the mid-May, the price difference between imported and domestic sources is about 400-600yuan/mt, and the current price difference is basically controlled at around 100yuan/mt, and difference of some specification is even smaller. When this gap narrows down, import trading will be smoother.

Moreover, there is the benefits given by the macro environment. On the one hand, it was the first teleconference of between the top heads of China and the US on the evening of Jun 18th, which provided a buffer opportunity for the pre-existing Sino-US trade. On the other hand, most of the recent news about the international environment has boosted the market. Crude oil, exchange rate or commodities, they are all positive for the market.