By Malini Hariharan
The weakness in Asian petrochemical markets is continuing with buyers taking cues from developments in the crude oil and stock markets.
In polymers, despite a slight rebound in polyethylene (PE) prices late last week the buying sentiment remained negative in China. The mood worsened today following a 5% fall in linear-low density PE (lldPE) futures on the Dalian Commodity Exchange (DCE).
Trading of September lldPE futures on the DCE was stopped right after it opened at 9:00am local time, reports ICIS news.
Purified terephthalic acid (PTA) futures also dropped by about 4% and trading of September contracts was halted on the Zhengzhou Commodity Exchange (ZCE) at around 11:00am.
"The futures market is under panic sentiment today on the back of multiple negative news over the weekend," said a source referring to falling crude values and also stock prices.
And not surprisingly, the physical market was quick to react. PTA prices fell to an eight-month low.
LldPE trading slowed to a trickle today, reports my colleague Bee Lin from ICIS pricing.
"The physical market has fallen into an uneasy silence as buyers are not interested to bid, and sellers are unsure what price to offer," said one trader.
Local producers and traders have so far refrained from lowering offers as they are not confident that this will be sufficient to draw buyers. But the question is how long can they hold on.