05 November 2010 03:55 [Source: ICIS news]
(Adds details, traders comments after paragraph 3)
An overnight jump in Dow Jones Indexes by 1.96% spurred bullish sentiment, pushing PTA futures to hit the 6% cap set on daily swings in values in just two minutes of trade at the Zhengzhou Commodity Exchange, they said.
Driven by the spikes, offers for Chinese domestic spot PTA jumped to CNY9,500-9,600/tonne ex-warehouse, a sharp increase of CNY400-500/tonne from Thursday.
However, most market players were taken by surprise by the strong momentum in the PTA futures forcing them to wait for the market to calm down.
“We don’t know how to place our offer,” said a first-tier trader.
“It is risky to negotiating business today [Friday] as both buyers and sellers are restless,” added another trader.
The spike in futures spilled over to the downstream polyester industry resulting in pushing the spot prices of downstream polyester yarn as well.
“We closed offers for all our polyester yarn products today [Friday] and will wait for the raw material prices to stabilise,” said the largest polyester maker in
Several other polyester makers in
“Although such price jumps in both futures and spot markets are risky and unsustainable, but we don’t see sign of softness due to a strong support from PTA’s market fundamentals,” said a Chinese trader.
Monoethylene glycol (MEG), the co-feedstock for polyester, were heard traded at CNY8,400/tonne ex-tank, up by CNY300-400/tonne from Thursday, according to latest ICIS data.
Daily cap at the Zhengzhou Commodity Exchange increases by each successive day.
Trading was halted on Thursday after PTA futures went up by 4% and it was again stopped on Friday when futures exceeded the raised cap of 6% for the second day.
($1 = CNY6.66)
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