China Morning Snapshot – 22 February 2021

Both PP and LLDPE contracts on Dalian Commodity Exchange concluded the first half of the trading day with significant increases compared to the previous trading session. 

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

Total inventories at Sinopec and CNPC’s warehouses reduced 5,000 tons from last Friday to 920,000 tons as of 22 February 2021. 

More manufacturers are returning to work this week to face drastic price hikes from both local and international suppliers. Sources said that buyers in Eastern and Northern China are less active in making purchases, however, sentiment in Southern China is rather strong. 

According to market sources, BOPP converters are still enjoying around CNY500/ton profit margins while packaging manufacturers are at breakeven at the current raw material prices. There have been market talks that converters are planning to lower operating rates to tackle the surging raw material costs, however, sellers are not too concerned citing the strong demand from overseas markets.