China PP, PE and PET futures fall 6%, the daily limit; physical PP falls 1.3%

Polypropylene (PP) and linear low-density polyethylene (LLDPE) futures on the Dalian Commodity Exchange and bottle-grade PET (瓶片) futures on the Zhengzhou Commodity Exchange closed on Thursday, 5 November, locked at the 6% daily downside limit, according to TMTPost (钛媒体) and Sina Finance closing quotes. January 2027 PP (PP2701) ended at 9,544 yuan a tonne, against a previous settlement of 10,153 yuan; LLDPE (L2701) at 8,838 yuan, against 9,402. The 6% drop compares the close with the previous settlement; the day’s own settlement price was 9,841 yuan for PP and 9,106 yuan for LLDPE, about 3% below the day before.

In bottle-grade PET, the December contract (PR2612), the day’s highest-volume contract on Sina quotes, closed at 7,676 yuan (−6.0%), and January (PR2701) at 7,502 yuan (−6.0%). According to TMTPost, propylene, benzene, monoethylene glycol (MEG) and styrene contracts were also locked limit-down. On Sina quotes, PTA (TA2701) fell 5.9% to 5,986 yuan; paraxylene (PX2701) 6.5% to 8,416 yuan; and PVC (V2701) 2.6% to 4,962 yuan. On the Shanghai Futures Exchange, January fuel oil (FU2701) closed at 4,112 yuan, down 14.1% on the previous settlement, according to the exchange’s daily report.

Futures Daily (期货日报), republished by Xinhua’s financial portal, said the energy and chemicals complex “collapsed” again on Thursday after heavy falls on Tuesday and Wednesday. SDIC Futures (国投期货) chief chemicals analyst Pang Chunyan (庞春艳) told the paper the turning point was the result of the US midterm elections: the market began betting on US–Iran de-escalation, and the oil slump pressured the whole chain. She said olefins, which had been strong, were hit hardest: much of the PE and MEG supply comes from the Middle East, and de-escalation raises expectations that imports will return; at the same time, supply of naphtha, LPG and methanol is expected to grow, and Chinese PDH, cracker and MTO units have room to raise output. Futures broker 首创期货 (Shouchuang Futures), in a note carried by Sina, said Brent fell below US$100 and that Shanghai-traded SC crude fell more than 9% at one point during the day.

Physical PP and PET prices fell less. The 生意社 (100ppi) PP benchmark stood at 11,550 yuan a tonne on 5 November, against 11,700 the day before, a 1.3% drop by CSP’s calculation. At 11:05, consultancy 隆众资讯 said bottle-grade PET in east China closed at 8,280 yuan, down 380 yuan, with November cargo offers at 8,100–8,400 yuan, weak buying and a wait-and-see mood. Earlier in the morning, Everbright Futures (光大期货) said east China raffia-grade PP stood at 11,600 yuan on Wednesday and that, with little supply pressure in November, the physical-futures basis and the spread between contract months should stay high, with swings.

The drop follows a rising October for petrochemicals. According to the China Federation of Logistics and Purchasing (CFLP), cited by China News Service, paraxylene rose 11.4%, polypropylene 7.6% and fuel oil 7.2% in October from September, and the chemicals price index rose 4.9%. English-language market bulletin CommoPlast reported that the futures selloff dragged domestic spot prices and PP and PE export offers lower in quick succession.

The analysts quoted by Futures Daily do not see the move as settled. Zhou Qin (周琴) of Galaxy Futures (银河期货) said the adjustment prices in a Middle East de-escalation that has not yet happened, that the geopolitical risk premium may return and that high volatility should continue; she said industry players and traders should not blindly bet on further falls.

CSP take: for importers of resin, packaging, film, bottles and plastic goods, in any country, the day shows two things. First, futures fell far more than physical prices: by our calculation, using the January contract settlement (9,841), the gap to 生意社’s physical PP reached 1,709 yuan a tonne; in 生意社’s own day table, built on the close (9,544), the gap was 2,006 yuan. Second, the direction hinges on US–Iran talks that are still open. It makes sense to ask suppliers for revised, short-validity quotes and to watch whether physical prices follow futures over the coming days, rather than locking in large volumes at once. This reading is ours, not the sources’.