Crude oil rose to end the week of April 27, 2009 above US$51/barrel. Light sweet crude oil for June delivery increased to US$51.55, mainly on news of encouraging earnings from Ford (F), American Express and Microsoft that aroused hopes of improved energy demand, propped by a weakening US dollar that supports crude's hedge value. The dollar tumbled to a new multi-week low against the yen and an 11-day low against the euro and the franc. The Department of Energy (DoE) has reported a rise of 3.9 million barrels in the week ending April 17; marking the sixth consecutive weekly gain. Crude inventories in the United States are at the highest level since September 1990. Reserves of gasoline and distilled products, such as diesel and heating fuel, have been reported to have increased, stunning analyst expectations of declines.
Weakening demand from derivative markets has caused naphtha prices to dip marginally below US$450/MT in Asia in the week of April 27, 2009. Open-spec naphtha prices for H1-June delivery settled at US$446/MT CNF Japan.
Despite robust demand from downstream polyethylene markets, FOB Korea ethylene prices stabilized at US$690/MT as the supply scenario improved in Asia in the week of April 27, 2009. However, as supply improves, CFR prices in several parts of Asia are witnessing a downtrend, with CFR SE Asia price down revised as low as US$710/MT.
FOB Korea propylene prices improved to US$850/MT in Asia in the week of April 27, 2009 on optimistic downstream polypropylene market outlook and robust sentiments in the region.
As demand from derivative markets deteriorates, styrene monomer prices have taken a hit, plunging by almost 100 dollars. May/June shipment prices have fallen to US$890/MT FOB Korea in Asia in the week of April 27, 2009 on unenthusiastic demand, particularly from China. Few offers were heard at the 900 dollar mark, though most sellers abstained from quoting firm offers. May shipment feedstock benzene prices fell to US$610/MT, and a further fall was arrested by improved crude oil values during the week.
Anticipation of a supply shortfall from producers in the region has pushed up VCM prices to US$620/MT in Asia in the week of April 27, 2009. CFR China offers for May delivery from Japan were hiked to US$650/MT as Tosoh Corp plans to shutter its plant for a one month maintenance shutdown. Though buying intentions have been heard around US$620/MT, few deals were concluded as sellers estimate to gain from supply constraints.
EDC prices have increased to US$320/MT in Asia in the week of April 27, 2009, on the back of restricted supplies in the region and in line with robust downstream VCM and PVC markets. As demand firms along with supply constraints, CFR offers have been quoted at US$350/MT, while buying intentions continue to hover around 25-30 dollars lower.
Recovering from last week's fall, HDPE prices have strengthened to US$1165/MT in Asia in the week of April 27, 2009. Most offers for June shipment were heard at an elevated level for film and yarn grade. June shipment CFR China offer from Taiwan and South East Asia have been heard around US$1165-1175/MT, while deals were heard concluded about ten dollars lower. Interestingly, buying intentions for yarn grade remained pegged 20-30 dollars lower than offers pegged above US$1200/MT.
Restricted avails in the region have strengthened LDPE prices at US$1155/MT in Asia in the week of April 27, 2009. CFR May shipment cargoes were traded below US$1145/MT from Middle East, at US$1145/MT from Singapore and above US$1145/MT from South Korea. However, as supply constraints are expected to continue, deal conclusion could happen at higher levels.
LLDPE prices have risen to US$1145/MT in Asia in the week of April 27, 2009 due to a limited supply scenario in the region. The market is witnessing absence of firm offers from majority of sellers in the region.
As domestic polypropylene prices rise in China and market outlook strengthens amid restricted supplies, Asian prices have spiked to US$1095/MT in the week of April 27, 2009. The market awaits May offers from South Korea, while CFR China offers from Taiwan and Malaysia have been heard at US$1150/MT, and few deep-sea cargoes of yarn and injection grades for end of month shipment were quoted below US$1070/MT. As supplies tighten in the region, fresh offers are anticipated to be quoted above US$1100/MT CFR China.
May shipment PVC stabilized at US$725/MT in Asia in the week of April 27, 2009 even as domestic prices gained in China. Very few deals have been concluded in the week as sellers from South Korea and Japan have firmed up offers to US$750/MT on restricted avails, while most buyers are reluctant to accept these offers in anticipation of a price dip.
GPPS prices have plunged by over fifty dollars to US$1065/MT for GPPS and below US$1200/MT for HIPS in Asia in the week of April 27, 2009 in line with tumbling feedstock values and deteriorating demand from China. Buyers from China anticipate a further price fall as they wait in the sidelines. As buyer's resistance continues, few deals were heard concluded around 40-45 dollars lower than seller's offers quoted at US$1065-1070/MT.
As feedstock styrene collapses, and demand in the region, particularly from China, becomes unenthusiastic, ABS prices have plunged by almost fifty dollars to US$1445/MT. Most May shipment offers have tanked to hover around US$1450/MT CFR China, and fresh offers are expected to fall further.