22 February 2010 10:12 [Source: ICIS news]
SINGAPORE (ICIS news)--Linear low density polyethylene (LLDPE) futures contracts traded on the Dalian Commodity Exchange (DCE) jumped 3% on Monday amid higher crude values and firmer physical polyethylene market in China, market players said.
The rise in values contradicted earlier expectations that China PE prices would collapse after the holidays, they said. The Chinese market was closed the whole of last week for the Lunar New Year celebrations.
"The market reopened at yuan (CNY) 12,300/tonne ($1,801/tonne) this morning, about 5% higher from the last settlement price before it closed for [the] Lunar New Year holidays. This is in line with the hike in international crude values," a south China-based futures broker said.
US crude was trading at above $80/bbl on Monday afternoon in Asia.
Many market players had expected the China futures market to open on a bearish note after the holidays as the local government had introduced further credit tightening measures just before the market closed for the holidays two weeks ago.
The most traded May contract closed at CNY12,095/tonne on Monday, CNY370/tonne or 3% higher from the previous settlement price of CNY11,725/tonne.
Local petrochemical major Sinopec raised its ex-works prices by around CNY200/tonne for different grades of PE on Sunday, in response to the recent surge in crude values, which boosted market sentiment, local traders said.
Trading in east China was cited at CNY11,600-11,800/tonne ex-warehouse, CNY50-400/tonne higher from two weeks ago, according to China chemicals market intelligence service ICIS Chemease.
($1 = CNY6.83)
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