China LLDPE futures fall by 2.23% this week on poor economic outlook

01 September 2011 11:17  [Source: ICIS news]

SINGAPORE (ICIS)--China’s futures of linear low density polyethylene (LLDPE) on the Dalian Commodity Exchange (DCE) fell by 2.23% for the first time this week because of the uncertainty in the global economic outlook, local futures brokers said on Thursday.

The most actively traded contract for January 2012 was traded at yuan (CNY) 10,815/tonne ($1,695/tonne) on Thursday, down by CNY250/tonne or 2.23% lower from the settlement on 31 August at CNY11,065/tonne, the DCE data showed.

About 2.05m tonnes of LLDPE or 821,460 contracts were traded for delivery in January 2012, the data showed.

“The gloomy economic outlook is outweighing the bullish impact of the firm crude futures [on the market], which led [LLDPE] futures to decline,” a Zhejiang-based broker said.

WTI crude futures continued to hover at $89/bbl on Thursday from 31 August.

“On the whole, most futures products in China are down today,” a Ningbo-based broker said.

“We foresee this decline as temporary because the spot market seems to be holding [up] quite well.

“Furthermore, [LLDPE] inventories are still manageable. We cannot have the futures market to be deviating too much from the spot market,” the Ningbo-based broker added.

On Thursday, spot LLDPE film prices in China’s domestic market were discussed at about CNY10,400-10,600/tonne ex-bonded warehouse, according to data from ICIS.

($1 = CNY6.38)

Additional reporting by Moon Chen and Lizzie Yu

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By: Ong Sheau Ling
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