China Morning Snapshot – 21 December 2020

Both PP and LLDPE contracts on Dalian Commodity Exchange opened the trading day on a firm note, however, plunged into the negative territory toward the end of the morning session, following the energy complex. 

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

Total inventories at Sinopec and CNPC’s warehouses piled up 55,000 tons throughout the weekend to 665,000 tons as of 21 December 2020.

Players are rather concerned over the new COVID-19 strain found in Europe, which could trigger tighter lockdown in this market and restraint end-product demand. There have been market talks that end-product buyers in the EU are slowing down orders amid a bearish market outlook.

“We are still hoping for a pre-Lunar New Year replenishment round in the next couple of weeks before Chinese manufacturers wind down operating rates starting 10 January 2021. However, we do not expect any major upswing in terms of prices,” a trader added.