Oil prices have risen in the week of April 26, 2010. At the end of the week, June Brent crude stood at US$87.5 while US light, sweet crude settled at US$85.4. Prices gained on Friday after US new home sales were reported to have unexpectedly jumped 27% in March along with gains in Asian equity markets. Jet fuel demand revived on withdrawal of the week-long flight ban that was imposed over most of Europe’s airspace along with a decline in the US dollar vs the Euro on Greece’s decision to ask the European Union and the International Monetary Fund (IMF) for financial aid as its debt crisis worsened. Oil prices were additionally pressurised by a decision of US Securities and Exchange Commission to file fraud charges against investment bank Goldman Sachs. As per the SEC, information about an investment product disclosed by Goldman Sachs was not correct and misled investors, resulting in losses of US$1 bln. Data released by the Energy Information Administration (EIA) showed a 1.9 mln barrel increase in US stockpiles, and a greater than expected rise in gasoline stocks and distillates.
Naphtha prices continue to rise in Asia in the week of April 26, 2010 to about US$775/MT in line with robust crude oil markets. H1-June open-spec naphtha rose to US$780/MT CFR Japan, while H2-May prices settled at US$765/MT
Restricted avails have pushed up ethylene prices to US$1260/MT in Asia in the week of April 26, 2010. Supplies have been tight as a number of Asian crackers are currently undergoing turnarounds. Spot prices have risen, with late April gains wiping out the losses recorded over March. Spot ethylene prices in Northeast Asia declined by US$70/ton over the month of March, but have gained US$120/ton from the beginning of April. At the end of the week, ethylene spot prices were heard at US$1260-1265/MT CFR Northeast Asia amid offers that were about 40-45 dollars higher. The sudden rise in ethylene prices poses problems for Asian PE producers. The past few weeks have posed challenges for Asian PE sellers and been difficult for deal conclusion as buying interest in Asia’s PE markets is generally too weak to support prices capable of covering producers theoretical costs based on spot ethylene values.
Propylene prices have inched down to US$1310/MT in Asia in the week of April 26, 2010 in line the accelerating plunge in US spot propylene prices in April. In the US, deals for RGP were concluded at about US$860/MT- a fall of 18% from a week earlier, and down 43% from a peak seen in the last week of March. Falling RGP indicates lower CGP and PGP contracts for May in USA.
Amid restricted avails and rising ethylene and naphtha costs, EDC prices have inched up in Asia to US$540/MT in the week of April 26, 2010. May shipment prices have been gauged at US$550/MT CFR Far East.
VCM prices moved up to US$860/MT in Asia in the week of April 26, 2010 in line with rising feedstock costs and steady downstream demand. CFR China offers for May shipment were heard at US$880/MT, while markets were gauged about twenty dollars lower. Similar offer levels were seen for April shipment at US$880/MT, with deals concluded about 25-30 dollars lower.
In line with falling feedstock benzene costs, Styrene Monomer prices have declined in Asia in the week of April 26, 2010. FOB Korea prices for May shipment have fallen to US$1265/MT as benzene prices descend by 5-10 dollars this week. FOB Korea deals for May shipment benzene have been heard at US$990/MT levels.
HDPE prices have soared to US$1310/MT in Asia in the week of April 26, 2010 in line with mounting costs of feedstock ethylene. CFR China selling intentions pegged at US$1325-1360/MT, met with buyers reluctance and CFR China deals were concluded at the levels of US$1300-1320/MT. The sudden rise in ethylene prices poses problems for Asian PE producers as Asia’s PE markets are generally too weak to support prices capable of covering producers theoretical costs based on spot ethylene values.
LDPE prices have climbed up to US$1485/MT in Asia in the week of April 26, 2010 in line with rising ethylene costs. CFR China selling intentions were pegged at US$1490-1500/MT levels, while CFR SE Asia offers from sellers in South Korea firmed to US$1590/MT on very limited avails. Market was lackluster and demand was stagnant in China’s domestic markets. Weak demand in Asia’s PE markets is incapable of supporting higher prices as producers raise offers in a bid to cover theoretical costs based on spot ethylene values.
LLDPE prices have mounted to US$1385/MT in Asia in the week of April 26, 2010 in line with rising feedstock costs. Sellers have hiked CFR China offers to US$1400/MT in a bid to cope with the sudden surge in feedstock ethylene values. Steady demand in China has propped up domestic prices by RMB 45-50/MT.
Polypropylene prices have spiked to US$1365/MT in Asia in the week of April 26, 2010 in line with high costs of feedstock propylene. Despite unchanged demand, regional producers in Southeast Asia have announced higher offers. Prices have been propped by squeezed margins as a result of high propylene feedstock costs. Buyers are purchasing on a hand to mouth basis as they expect to see lower prices emerging over the next few months with the onslaught of new capacity additions. However, as sellers hike offers, the outlook for PP remains firmer over the next few weeks, and buyers do not plan to build up any stocks for now in anticipation of lower prices over the medium term.
PVC prices have steadied at last week’s US$1035/MT in Asia, amid monotonous demand on the buyer’s side, and restricted availability amid high ethylene costs on the seller’s side. CFR China May shipment offers were hiked to US$1035-1050/MT as ethylene prices jumped and supplies were increasingly restrained. Cargoes from USA were offered about 10-15 dollars cheaper and met with deal conclusion at US$1010/MT levels.
Polystyrene (General Purpose) prices have moved up to US$1395/MT in Asia in the week of April 26, 2010. Robust market sentiments firmed May shipment CFR China prices of GPPS grade to US$1400/MT as CFR China offers from Taiwan and South Korea rose to US$1425/MT levels , and those for HIPS climbed past US$1515/MT.
A hike in ABS prices persists as they climb to US$1945/MT amid increased costs of feedstocks butadiene and ACN. As sellers attempt to increase prices to cope with poor production margins, May shipment offers have been hiked by US$45-50/MT to levels of US$2000-2040/MT CFR China.