Linear low density polyethylene futures traded on the Dalian Commodity Exchange in China jumped for the second consecutive day, and hit the daily gain limit at the end of the morning trading session.
At 11.30 a.m. local time (0330 GMT), the benchmark January futures traded at Yuan 9185/mt, up 5% day on day -- triggering the bourse's daily gain limit.
"The rebound is due to the [possible] easing of financing restrictions," said a Chinese trader.
While China has not officially announced easing of financial controls to curb inflation, several market participants believe that the central bank may reduce the reserve rate ratio for banks.
This has led to a bullish rally on the Chinese futures markets.
However, the bullish sentiment on futures was not supported in the spot market, market participants said.
"LLDPE futures are up, but people still don't want to buy," said a regional producer.
LLDPE November was offered at $1,160-1,180/mt CFR China for Middle East-origin cargoes, while ASEAN cargoes were offered at $1,250/mt CFR China.
ASEAN origin cargoes do not attract the 6.5% import tax to China under the ASEAN-China FTA.
