What is LLDPE?
Low Linear Density Polyethylene (LLDPE) is a linear polymer that can be made into LLDPE plastic and LLDPE tubing due to its higher tensile strength, higher impact, and higher puncture resistance.
As one of the most used raw materials for a variety of products, it is highly demanded and traded.
In line with the high demand for the product, on 2nd Sept, Dalian Commodity exchange (DCE) released LLDPE futures in the form of both futures and options for financial speculators, traders, and investors that are Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors.
The following article will cover key information about LLDPE futures:
LLDPE
Trading LLDPE futures with Dalian Commodity Exchange is an opportunity for profits as the exchange is known for its “incredible volatility”.
As of August, Independent Commodity Intelligence Services (ICID) had forecasted probable price fluctuations through a range of scenarios accessible through the following link, it is gathered that the annual average of CFR China C4 LLDPE price spread over CFR Japan naphtha was just $273/tonne in 2022 up until August.
On the other hand, based on other reports in September, Linear Low-Density Polyethylene: 4th Month data was reported at 8,192.000 RMB/Ton in Sep 2022. This records an increase from the previous number of 7,750.000 RMB/Ton for Aug 2022. China Settlement Price.
The changing patterns of the price spread and the price per ton for LLDPE are subjected to the assessment of professional traders. However, two main reasons stand out that may affect the industry soon.
1. Increased Demand
Some sources account for the price rise from stronger imports offered from overseas suppliers and improved buying trends in the region.
2. Decreased Demand
While demand has temporarily increased, ICIS also records that LLDPE confronts a loss of demand because, as science stands now, it is very hard to recycle.
Regardless, LLDPE provides a great venture opportunity for speculation or other trade purposes.
LLDPE futures from Dalian Commodity Exchange
Dalian Commodity Exchange offers a total of 21 futures, with the previously internationalized futures including iron ore futures, palm olein futures, and palm olein options.
The addition of LLDPE futures will allow traders to explore cross-arbitrage strategies, price discovery, and hedging opportunities. To develop the effectiveness of trade, the exchange continues to develop its processes in terms of approval mechanisms, integration of futures transactions, cash transactions, and strengthening of the link between future market industries.
LLDPE futures are also regularly updated in DCE’s information and search page. The page provides crucial information such as the most recent adjustments to price limits and trading margins during China’s National Day Holiday.
Why trade LLDPE with Orient Futures Singapore?
As an overseas intermediary, Orient Futures Singapore offers direct access to trading, clearing, and settlement from Chinese exchanges. More importantly, Orient Futures Singapore is backed by our parent company Shanghai Orient Futures which is a direct wholly owned subsidiary of Orient Securities.
Our comprehensive services and technological wealth entail customized service solutions for high-frequency customers in all scales of trade (professional investors, retail investors, institutional investors).
LLDPE contract specifications
The LLDPE Futures contract follows the following specifications:
The daily price limit range of the contract is 4% of last settlement price.
The contract for LLDPE Futures is at the trading unit of 5MT/Lot, with a minimum price fluctuation of 1CNY/MT.
Contract Months are on all 12 months from Monday to Friday, at these trading hours:
Trading Day
9:00am – 11:30pm/ 1:30pm – 3:00pm, Beijing Time, Monday to Friday, and other trading hours announced by DCE. (T-session)
At the final settlement, all open positions in the contract at the termination of trading must make a payment or receive payment in accordance with normal variation margin procedures based on a settlement price equal to the settlement price.
Market News
Based on a recent report by Argusmedia on 15 September 2021, LLDPE futures increased by 450 yuan/t or 5.3pc to close at Yn8,980/t ($1,139/t on an import parity basis).
The following graph is the market data statistics as indicated on DCE’s official website.
The forecast for the market by Marketwatch and the Linear Low-density Polyethylene (LLDPE) market report suggest that the 2022 development of Third-Party Replacement Strap for Linear Low-density Polyethylene(LLDPE) will have huge change from earlier year.
On a macro scale, in the next five years, mainland China, the United States, Southeast Asia, and India will all significantly increase their LLDPE capacity.
Start Trading with Orient Futures Singapore
Orient Futures Singapore provides institutional-grade access to the Dalian Commodity Exchange (DCE) as part of a comprehensive China market offering, supporting clients from onboarding through execution and beyond.
Through our integrated China exchange connectivity, clients may also access the Shanghai Futures Exchange (SHFE) for industrial and precious metals futures, the Shanghai International Energy Exchange (INE) for energy derivatives including crude oil, the Zhengzhou Commodity Exchange (ZCE) for agricultural and soft commodities, the Guangzhou Futures Exchange (GFEX) for emerging industrial products, and the China Financial Futures Exchange (CFFEX) for equity index derivatives. This unified access framework enables institutions to implement cross-exchange strategies spanning iron ore, petrochemicals, energy, metals, agriculture and financial futures.
Contact us to explore how DCE fits into your broader China market strategy and how coordinated participation across multiple mainland exchanges can enhance portfolio diversification and execution efficiency.
