Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended July 20, 2009

CRUDE OIL Falling weekly inventories, healthy pace of economic growth in China and healthier Q2-09 company results helped boost investor optimism, pushing up oil prices past US$64 a barrel in Asia. Better than expected earnings from Goldman Sachs Group Inc., Intel Corp. and JPMorgan Chase & Co. alleviated some investor doubts about the chances of a US economic recovery this year. Oil futures have pushed past US$63 a barrel in the week of July 20, 2009. NAPHTHA Naphtha prices saw a marginal movement to US$555/MT in Asia in the week of July 20, 2009 as crude oil market outlook turned robust. However, increasing supplies in the region have started to pull down premiums on August naphtha in Asia. Supplies have increased from Saudi Aramco due to higher output of crude, as well as Kuwait Petroleum Corp. as its delayed aromatics plant comes onstream. ETHYLENE Ethylene markets have been subdued in Asia this week on muted demand and lack of deal conclusion. Prices have dipped to US$1005/MT in the week of July 20, 2009. Buying has been sluggish in China on an expected ease in supply after restart, post-maintenance, of Shanghai SECCO’s naphtha cracker. SECCO has expanded ethylene production capacity to 1.09 mln tpa. After a 50-day shutdown for maintenance and expansion, the plant produced its first batch of products this week. PROPYLENE As restricted supplies continue, propylene prices continue to strengthen to US$1000/MT in Asia in the week of July 20, 2009. Sudden shutdowns at European crackers in France, Italy, Sweden and Norway have impacted propylene supply in Asia. Borealis has declared force majeure on olefins output at its 625,000 tpa Stenungsund Swedish cracker after an unexpected shutdown. Frances’ Total has also had an unexpected shutdown due to an explosion at its 320,000 tpa cracker at Carling-Saint-Avold, France. The expected supply shortage due to the cracker outages, has resulted in offers at higher spot prices, despite muted demand and lack of deal conclusion. CFR China offers from South Korea have been heard at around US$1100, with buying intention pegged about fifty dollars lower. STYRENE MONOMER As demand from derivative markets wanes, most buyers of Styrene Monomer have put stockpiling on hold. Pessimistic buying sentiments have stagnated SM prices at US$1060/MT in Asia in the week of July 20, 2009, despite a 75 dollar hike in the week in benzene prices to US$860/MT FOB Korea. EDC EDC prices rose under the dual influence of restricted availability in the region as well as improving sentiments in downstream PVC. EDC prices have increased to US$485/MT in Asia in the week of July 20, 2009, against offers pegged about 20 dollars higher. Run rates at many Chloro alkali plants across the continent, that had been reduced, have not been raised due to feeble demand for caustic soda. VCM As input EDC as well as derivative PVC market sentiments continue to be buoyant, VCM prices have moved up to US$725/MT. CFR offers for August shipment have been hiked to US$755/MT levels. POLYMERS HDPE Bearish market sentiments have pulled down HDPE prices to US$1270/MT in Asia in the week of July 20, 2009. After successful conclusion of deals for August shipment film grade at the 1300 dollar mark and blow molding grades at US$1275/MT, fresh offers were increased. CFR China August shipment offers were heard at above US$1300/MT in line with healthier ethylene costs. LDPE As the supply scenario continues to be stringent, LDPE prices have increased to US$1275/MT CFR China in Asia in the week of July 20, 2009. Offers have been hiked past the 1300 dollar mark. LLDPE Limited deal conclusion has steadied LLDPE prices at US$1245/MT in Asia in the week of July 20, 2009. CFR China offers from South Korea and Taiwan were heard at US$1260-1270/MT, even as buying intentions remained pegged about 10-15 dollars lower. POLYPROPYLENE Polypropylene prices have gained strength in the week of July 20, 2009, rising to US$1155/MT in Asia. Most CFR China August shipment offers for yarn grade were heard at US$1150-1175/MT, at about US$1145-1160/MT for injection grade. POLY VINYL CHLORIDE Key producers increased offers for August shipment in line with stronger oil prices, propping up PVC prices to US$920/MT in Asia in the week of June 20, 2009. Thai and Taiwanese PVC makers have offered August shipment material at US$925-940/MT CFR China. GPPS Lackluster demand from China has depressed GPPS prices to US$1155/MT in Asia in the week of June 20, 2009. Buyers anticipate a price correction as more plants come onstream in the region, hence are delaying buying decision. August shipment CFR China offers have been brought down by about 25-30 dollars to range below US$1200/MT. Buying intentions were gauged much lower as buyers resistance persisted. CFR China prices were assessed at US$1155/MT for GPPS and at US$1235/MT for HIPS. ABS Lackluster demand from China amid weakening costs of inputs ACN and SM have pulled down ABS prices to US$1395/MT in Asia in the week of July 20, 2009. Offers from South Korea and Taiwan hovered between between US$1425-1440/MT was met with buying intentions about 20-30 dollars lower.
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