China Morning Snapshot – 02 March 2021

Both PP and LLDPE contracts on Dalian Commodity Exchange continue to fall on the second trading day of the week on the back of the weakening crude oil market and slower manufacturing activities in China.

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

Total inventories at Sinopec and CNPC’s warehouses piled up 10,000 tons day-on-day to 915,000 tons as of 02 March 2021. (Correction: Inventories were at 905,000 tons on 1 March 2021. The previous Snapshot reported at 930,000 tons.)

Trading activities in the local market throughout the morning session are soft. Sources said that local producers only become willing to lower prices after the pile-up in inventories in the previous day. 

Apparently, BOPP manufacturers are still active in making new purchases, though many are asking for forward shipments at slightly lower current spot prices. Meanwhile, woven bag makers remain in the negative margin territory at the moment.

On another note, Chinese suppliers reported a visible drop in inquiries from South American buyers this week, but Turkish customers continue to ask for cargoes. A trader reportedly sold 4000 tons of homo-PP yarn to Turkey at $1350/ton FOB China – stable from the previous week.