BRIEF: China market remains calm on the first trading day of the year, but near-term outlook seems positive

The China market resumes working after the long weekend holiday on a rather calm note, however, traders are hopeful that converters would come back for replenishment before going off for Lunar New Year.

The May delivery contract for both LLDPE and PP on Dalian Commodity Exchange are soft during the first trading hours of the days. As a result, most buyers prefer to take a more conservative stance toward fresh purchases.

“This is very normal. We think the market would become more active toward the end of the week. These two weeks are very crucial given the stock preparation for the Lunar New Year,” a trader said.

Other sources said that the first two weeks of the month would be the best weeks and sentiment might gradually soften by the month end. 

The official data from the Chinese government showed a drop in the manufacturing purchasing managers index (PMI) to 49.4 in December, signaling the impact of the trade-war on the manufacturing sector.