[FREE] China Morning Snapshot – 19 October 2021

The futures market traded sluggishly throughout the morning session shrugging off the fact that more polyolefins plants are lowering operations rates amid the intensifying the Dual Control policies.

Details on the spot and futures prices are shown in the following table:

The stocks at Sinopec and CNPC’s warehouses fell 20,000 tons from the previous day to 820,000 tons as of 19 October 2021. (Correction: The total inventories were at 840,000 tons on 18 October 2021. The previous Snapshot reported at 850,000 tons.)

The domestic spot market seems struggling to find direction, trap between the weaker Dalian Commodity Exchange and the increasing number of MTO plants potentially cut production rates amid the Dual Control policies. Buyers prefer to buy only small quantities, waiting for additional discounts to emerge. At this rate, the pressure on the import market might soon materialize. 

“We continue to bet on the tightening local supply but bearing in mind that converters in Eastern China continue to operate at low rates, which constrict demand. There is no plan of a sharp reduction at the moment,” a trader added.