China Morning Snapshot – 29 January 2021

Dalian Commodity Exchange for both PP and PE poses a stronger trend throughout the morning session and both contracts hit new highs since mid of Dec 2020. 

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

Total inventories at Sinopec and CNPC’s warehouses digested another 20,000 tons in the previous trading day to 460,000 tons as of 29 January 2021. 

Compared to the beginning of January 2021, the stocks have digested 34.8% (or 245,000 tons) to the historically low levels today thanks to the steady pre-holiday replenishment activities in the domestic market. 

It is reported that arbitrage traders are more active in scouting the cargoes this morning with the support from the firming Dalian Commodity Exchange. Meanwhile, manufacturers are not very active, as a number of these buyers are lowering operating rates to go off for the holidays. 

It appears that traders are also not carrying a high level of inventories, signaling the absence of supply pressure, especially with the expected smaller than usual import arrivals in the coming months.