China petrochemical futures retreat on demand worries

SINGAPORE (ICIS)–China’s petrochemical futures tumbled on Wednesday morning as a lack of further economic stimulus measures from the government left investors worrying about demand.

At the end of the morning session, polyvinyl chloride (PVC), purified terephthalic acid (PTA) and paraxylene (PX) futures led the slump, with losses ranging from 2.4-3.5%.

Market sentiment was also weighed down by crude oil’s plunge overnight, in which both Brent and WTI benchmarks shed more than $3/bbl.

In physical markets, spot transactions were sluggish at most petrochemicals, including acetone, butadiene, acrylonitrile, propylene oxide, upon resumption of trade due to weak demand.

China had a week-long National Day holiday on 1-7 October.

Futures market gains in the previous session lost steam as market hopes for additional economic measures did not materialize.

In a briefing on 8 October, the National Development and Reform Commission (NDRC) – China’s top economic planner – provided no details on how to execute the aggressive measures announced in late September.

Market players were initially expecting the government to adopt further fiscal measures to arrest the slowdown of the world’s second-biggest economy.

($1 = CNY7.07)