Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended April 19, 2010

20-Apr-10
CRUDE OIL The week of April 19, 2010 saw crude oil slightly down from 18 month high levels of US$87 a barrel all week. However, oil prices plunged by almost 3% on Friday on news that US securities regulators charged Goldman Sachs Group with fraud. After the Goldman Sachs fraud, disappointing earnings by some top companies and data showing that single-family home construction declined, crude oil fell to US$83.2 in New York and to US$85.9 on the ICE futures exchange. A strengthening US dollar and demand concerns also contributed to this week’s slight decline. The US Securities and Exchange Commission (SEC) charged Goldman Sachs for defrauding investors over subprime mortgage securities, alleging that the investment giant failed to disclose crucial information on its securities. Concerns over Greece debt problems resurfaced on reports that the size of the country's much-anticipated bond issue could shrink or get abandoned. NAPHTHA Naphtha prices continued on an uptrend rising past US$760/MT in Asia in the week of April 19, 2010. In line with oil prices that were robust for over half the week, naphtha prices continued to rise in Asia. Open-spec naphtha for May delivery settled at US$760/MT CFR Japan. ETHYLENE Ethylene prices continue on an uptrend, rising to US$1185/MT in Asia in the week of April 19, 2010 amid restricted avails. Asia is faced with limited supplies on maintenance turnarounds at several plants, and due to run rates that have been reduced to less than 70% at some other plants. An unexpected shutdown at a cracker in Japan has also compounded the supply situation. Sellers offers for May shipment hiked past US$1275/MT. PROPYLENE Propylene prices have spiked to US$1315/MT FOB Korea in the week of April 19, 2010 in Asia. This represents a US$40/ton increase for the week. Increased export opportunities to Latin America amid persistent production problems in Asia, specially in Japan, coupled with maintenance shutdowns have led to these hikes. Unexpected outages were seen at two of Mitsui Chemicals’ propylene plants in Japan with 420,000 tpa capacity on April 10-11. Nippon Oil’s 140,000 tpa propylene plant in South Korea is to be halted for 32 days of maintenance work during April-May, while its 260,000 tpa capacity propylene plant is to shut for an unexpected maintenance of 19 days due to a mechanical problem. Formosa has shut its 250,000 tpa propylene plant in Taiwan on this week for 40 days. EDC Robust naphtha and ethylene prices have propped up EDC prices to US$535/MT in Asia in the week of April 19, 2010. CFR offers for next month have been pegged at US$565/MT against buying intentions about 30-35 dollars lower. VCM Awaiting offers for next month, the VCM market lacked movement this week, stabilizing at US$850/MT in Asia in the week of April 19, 2010. STYRENE MONOMER Styrene Monomer prices have steadied at last week’s US$1275/MT in Asia in the week of April 19, 2010. May shipment offers have steadied at last weeks price levels as feedstock benzene prices have inched up past the 1000 dollar mark in the week. POLYMERS HDPE A recovery in buying sentiments in China have propped up HDPE prices to US$1255/MT in Asia in the week of April 19, 2010. After successful conclusion of CFR China deals at US$1255-1270/MT last week, sellers from Taiwan and South Korea are considering another price rise in line with rising upstream ethylene costs, propping up offers to the 1300 dollar mark. LDPE LDPE prices have firmed up to US$1475/MT in Asia in the week of April 19, 2010 in line with rising ethylene costs. A 20-25 dollar hike has been seen in offers for next month shipment. After successful conclusion of deals at US$1475/MT levels, cargoes from the Middle East were quoted about 10-25 dollars higher. LLDPE LLDPE prices have risen on growing demand from China to US$1345/MT in Asia in the week of April 19, 2010. May shipment deals have been concluded at these levels. POLYPROPYLENE Polypropylene prices have spiked to US$1345/MT in Asia in the week of April 19, 2010. Propylene supply constraints have taken a toll on the PP market as prices in China have moved up in the local and import markets on the back of the higher propylene costs and reduced stock levels with sellers. A firm outlook is expected over the short term as sellers’ offer levels firm up, propped by the bullish upstream market. Export opportunities to non Asian countries have also increased as PP from USA gets expensive. Major SE Asian producers had announced May homo-PP offers with US$20-40/ton increases over April, with deal conclusion reported at prices equal to their new offer levels. CFR China yarn/injection grade from China were sold at US$1355/MT levels, even as key producers mull a hike in line with feedstock upstream propylene cost. POLYVINYL CHLORIDE PVC prices have moved up to US$1035/MT in Asia on increased offers from sellers in line with rising feedstock costs. May shipment offers were hiked by producers in Japan to US$1050/MT, an about ten dollars lower from Taiwan. Sellers in China offered May shipment-975/MT FOB CMP for carbide based resin and at US$975-990/MT FOB for ethylene based resin. However, demand continues to be lackluster, with the market outlook weak despite higher ethylene feedstock costs and firmer prices in China’s domestic PVC market. Players in Thailand have just returned to the market following last week’s New Year holidays POLYSTYRENE Polystyrene prices have moved up to US$1385/MT in Asia in the week of April 19, 2010 as producers increase prices in a bid to cope with rising production margins. CFR China May shipment offers for GPPS were heard at US$1425/MT levels and about 100 dollars higher for HIPS. ABS A hike in ABS prices persist as they rise in line with butadiene and ACN. to US$1935/MT in Asia in the week of April 19, 2010. Most May shipment offers have been hiked to US$1945-1975/MT levels, while buying intentions have been heard at US$1925/MT levels. Few deals have been successfully concluded at these levels, and could push up offers.
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