07 June 2010 05:50 [Source: ICIS news]
SINGAPORE (ICIS news)--Trading in China’s linear low density polyethylene (LLDPE) and purified terephthalic acid (PTA) futures was stopped after they breached 4-5% down limit from the previous settlement on Monday morning due to a plunge in crude values and raised concerns on Europe’s debt issues, trader said.
“The futures market is under panic sentiment today (Monday) on the back of multiple negative news over the weekend,” said a source with futures brokerage Wanda Futures.
The steep fall in crude oil values stemmed from reasons including the eurozone debt crisis and a 3.15% fall in the Dow Jones Index, while the sharp decrease in the futures market was also due to the same reasons including China's stricter policy on property loans.
Trading of September LLDPE futures on the Dalian Commodity Exchange (DCE) was stopped right after it opened at 9:00am local time (01:00 GMT) after falling by 5% to yuan (CNY) 9,415/tonne ($1,378/tonne), according to data from the DCE.
Trading of September PTA futures on the Zhengzhou Commodity Exchange (ZCE) was also halted at around 11:00am (03:00 GMT) after falling by 4% to CNY7,090/tonne ($1,038/tonne), according do ZCE data.
According to the rules of the two exchanges trading is stopped when prices fall by 4% or 5% from the previous settlement price.
“We don’t know how to offer PTA today because buyers stayed away and are afraid to take any cargoes under the current market conditions,” a major Chinese PTA trader said.
“Market confidence is far more important than market itself,” another trader said.
PTA prices had fallen by $100/tonne (€84/tonne), or 10.5%, to $850-860/tonne CFR (cost and freight) China Main Port (CMP) in the last month amid bearish sentiment despite a sustained demand in the downstream textile industry, he added.
($1 = €0.84 )
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