Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended December 7, 2009

09-Dec-09
CRUDE OIL Oil prices have fallen in the week of December 7, 2009 to levels below US$76 under pressure from a stronger dollar which outweighed reaction from better-than-expected US jobs data. At the end of the week, crude futures in New York fell to US$75.4, while Brent crude fell to US$77.5 as the dollar rose against the yen and the euro, making dollar-denominated commodities like crude more expensive for holders of other currencies, thus pressurizing oil prices. Swollen US stockpiles and weak product demand in USA are also burdening prices in the short term. NAPHTHA Naphtha prices have ended the week of December 7, 2009 above US$725/MT. Mid week, open-spec naphtha reached a 14 month high at levels of US$750/MT CFR Japan. But prices have dipped to end the week at US$725/MT CFR Japan. Prices are expected to continue north amid short supplies and robust demand from the aromatics sector. ETHYLENE December shipment ethylene prices have rocketed to US$1100/MT in Asia in the week of December 7, 2009. FOB Korea prices continue to head north as supplies remain restricted and demand started to pick up as a new downstream plants came onstream in China and Singapore. As supplies from Iran continue to be limited, spot ethylene prices rose to 15 month highs above US$1150/MT CFR SEA basis on robust demand from downstream polyethylene and MEG makers. Ethylene supply woes persist in the region as a shutdown continues at Iran’s 1.32 mln tpa cracker at Iran’s Jam Petrochemical, and also at Siam Cement’s 800,000 tpa cracker. PROPYLENE Weaker demand from downstream polypropylene markets have pulled down propylene prices in Asia to US$1100/MT in the week of December 7, 2009. EDC Rising feedstock costs have escalated production costs for EDC makers. As a result EDC prices have spiked to US$455/MT in Asia in the week of December 7, 2009. Prices continue to rise amid strong ethylene prices, strengthening downstream PVC prices and stringent supplies. Few deals were concluded from Taiwan at levels of US$475/MT CFR China, an indication that prices could continue north. VCM VCM prices have climbed up to US$720/MT in Asia in the week of December 7, 2009, amid rising input costs and supply constraints. Offers have spiked to near US$750/MT CFR SE Asia. CFR China offers for end of month shipment hover around US$730/MT, with deals concluded a tad lower. Supply scenario is expected to ease as Tosoh’s 400,000 tpa no.3 plant was restarted in Japan after an 8 week maintenance shutdown. STYRENE MONOMER Propelled by buoyant buyer’s demand, Styrene Monomer prices have spiked by over 50 dollars to US$1150/MT in Asia in the week of December 7, 2009. Rising costs of feedstock benzene also added to the price pressures. Increasing by almost fifty dollars on robust demand, FOB Korea benzene prices spiked past US$950/MT. January offers for SM were heard at US$1150/MT with deal conclusion about ten dollars lower. Prices are expected to continue strong as benzene continues to be offered at higher levels. POLYMERS HDPE Lackluster market activity has relaxed HDPE prices to US$1275/MT in Asia in the week of December 7, 2009. End of month CFR China deals for film grade were concluded at US$1250/MT from Saudi Arabia and about 20 dollars higher from South Korea. CFR China offers for yarn grade from South Korea were heard at the 1300 dollar mark, but awaits deal conclusion. CFR China deals for blow molding grade were concluded at US$1265/MT from South Korea and about 30 dollars lower from the Middle East. Though selling ideas have moved up with rising feedstock ethylene prices, markets have moderated as buyers await offers. LDPE LDPE prices moderated to US$1415/MT in Asia in the week of December 7, 2009, amid lackluster markets. Subdued market outlook persisted in the absence of offers from sellers. CFR China deals for European cargoes were concluded at US$1320/MT. With a 50 dollar increase in feedstock ethylene prices, selling ideas are being heard at higher levels, but have toned down as the markets await offers. LLDPE Like the other polyethylenes, quiet markets have softened LLDPE prices to US$1320/MT in wait of sellers’ offers. Deteriorating domestic prices in China have pulled down CFR China prices by about ten dollars this week. As feedstock ethylene prices escalated in the week, selling indications are being heard at higher levels. CFR China selling interest for next month was heard at US$1350/MT levels from South Korea. However, the markets await deal conclusion and have softened in the interim. POLYPROPYLENE Lackluster polypropylene markets have stagnated at last weeks’ US$1185/MT in Asia in the week of December 7, 2009. Market has been subdued as it awaits next month shipment offers as most key players have concluded deals for the month. Demand in polypropylene markets has been relatively unenthusiastic as compared to the other propylene derivatives. As propylene prices escalated in the past few weeks, PP traded with sizeable negative margins due to inability of producers to recover production costs. As propylene prices have dipped this week, the market awaits a correction in PP prices. Deals for this month were concluded from South Korea for yarn/injection grades at US$1150-1200/MT CFR China and above the 1200 dollar mark from the Middle East. POLY VINYL CHLORIDE PVC prices inched up to US$905/MT in Asia in the week of December 7, 2009 as the markets await offers for next month. Despite lack of movement in the PVC markets of Asia, an optimistic outlook pushed up prices amid buoyant feedstock prices. Most deals for December were concluded below the US$900 mark. Few offers from the Far East have already started moving in the direction of the feedstock costs, hinting a possible price increase in Asia. Local PVC producers in China have increased offers by about 10-15 dollars/ton on restricted supplies amid increased input costs. POLYSTYRENE GPPS prices have escalated above US$1210/MT in Asia in the week of December 7, 2009 in line with rocket high SM values. As most deals for the month have been concluded in Asia, offers for next month shipment rose to US$1230/MT levels. Increased input costs have propped up HIPS prices above US$1300/MT. CFR China offers fro HIPS have been heard at US$1310-1340/MT. ABS ABS prices have risen to US$1510/MT in Asia in the week of December 7, 2009. Prices have moved up in line with rising costs of feedstock SM, butadiene and ACN. Sellers have propped up offers above US$1525/MT, but buyers prefer to wait and watch. With successful deal conclusion at US$1500-1525/MT CFR China, buying ideas are mounting, despite buyers’ reluctance.
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