China Morning Snapshot – 06 January 2021

The May 2021 delivery contracts for PP and LLDPE once again slipped into the negative territory this morning regardless of the positive development in the crude oil market. 

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

Compared to the previous day, inventories at Sinopec and CNPC’s warehouses digested 30,000 tons to approximately 645,000 tons as of 6 January 2020. (Correction: The total stocks were at 675,000 tons on 5 January. The previous Snapshot reported at 670,000 tons.)

The falling futures market affected sentiment in the local ground negatively with spot prices retracted CNY50/ton ($8/ton) from the previous day while buyers slow down replenishment to wait for more discounts. 

The re-emergence of COVID-19 cases in Hubei province prompted stricter movement control that could reduce the demand for raw materials, especially when the Lunar New Year is just around the corner.

A number of manufacturers are encouraging employees not to travel this Lunar New Year to avoid the spread of the COVID-19 by giving numerous incentives including flexible holidays in the post-Spring break, local activities, and gifts.