China plastics futures weaker on bearish sentiment, profit taking

28 September 2009 11:58  [Source: ICIS news]

SINGAPORE (ICIS news)--China’s polymer futures on the Dalian Commodity Exchange (DCE) were largely weaker on Monday due to profit-taking and sharply bearish sentiment, industry sources said.

The November polyvinyl chloride (PVC) contract fell by 2.4% to close at yuan (CNY) 6,290/tonne ($921/tonne), its lowest level since trading started in late May, according to data from the DCE.

Spot prices of carbide-based PVC in China were meanwhile assessed at CNY6,450-6,650/tonne ex-warehouse last Friday, according to ICIS CBI.

With futures values now below spot prices, bearish speculators who were long on November contracts were probably keen to liquidate their positions ahead of the China National holidays, leading to the sell-off, a PVC trader said.

The November LLDPE contact, the most traded contract on Monday, closed at CNY9,540/tonne, largely unchanged from the previous settlement price, according to DCE data.

However, January LLDPE futures, the second most traded contract on Monday, closed at CNY9,435/tonne, CNY120/tonne or about 1.3% lower from Friday’s settlement price, as investors took profit ahead of the China National holidays.

($1 = CNY6.83)

Additional reporting by Chow Bee Lin
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By: Ng Hun Wei
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