Yo-yoing oil prices have ended the week of November 1, 2010 a tad higher than last week. Oil for December delivery rose to US$81.96 on the Nymex, while Brent crude for December settlement rose to US$83.36 a barrel on ICE Futures Europe exchange. Speculations of another round of credit-easing measures by the US Federal Reserve to help spur growth in the country has pushed oil prices up and pulled the dollar down. A fresh new round of large-scale asset purchases, or quantitative easing is expected to be announced in a meeting schedule this week. The dollar dropped for a third day against the Euro, reaching US$1.3997 per euro. A weaker US currency increases the appeal of commodities as an alternative investment. October saw manufacturing in China expand at the fastest pace in six months, implying that economic growth is withstanding cooling efforts by the government.
Naphtha prices have ended the week of November 1, 2010 at US$770/MT CFR Japan. Robust industry demand led Asian naphtha prices to recover to a three-session high midweek, while cracks rebounded from a near two-week low to reach their highest in a week. Amid ample supplies, sentiments have been boosted as South Korea's Honam Petrochemical and Samsung Total, and Japan’s Exxon and Tosoh seek cargoes for December. Despite ample supplies, crack values are likely to be range bound in the current high levels in the short-term, because strong petrochemical margins are supporting high cracker runs. This has prompted SK Energy to revive a 200,000 tpa cracker after a two-year shutdown. The cracker is expected to resume operations next month. Abu Dhabi National Oil Co. (ADNOC) may offer naphtha to buyers in Asia for delivery from January through December 2011. This may be several dollars more than the price agreed by Kuwait for December-November 2011 delivery.
Despite robust derivative demand, ethylene prices in Asia have dipped to US$1030/MT in the week of November 1, 2010. Market outlook and sentiments have become pessimistic on sluggish demand amid improved supplies.
As end user demand deteriorates, propylene prices have dipped to US$1115/MT in Asia in the week of November 1, 2010. Demand continues to be lackluster amid healthy supplies from producers.
Despite stagnant derivative markets and falling ethylene values, EDC prices continue to rise. Prices have inched up to US$570/MT in Asia in the week of November 1, 2010 amid restricted avails. Offers have been increased to the six hundred dollar mark against buying interest pegged about fifty dollars lower.
VCM prices have risen to US$885/MT in Asia in the week of November 1, 2010 amid tight supplies. Offers have been maintained at the 900 dollar mark as feedstock values move up.
As feedstock benzene prices dip, and derivative demand deteriorates, styrene monomer prices have reduced to US$1230/MT in Asia in the week of November 1, 2010. Sentiments and outlook in feedstock benzene markets remain pessimistic, as prices drop to US$930/MT for next month shipment.
Amid limited deal conclusion, and lackluster markets, HDPE prices have stagnated at US$1275/MT in Asia in the week of November 1, 2010. Few deals for material from the Middle East were concluded at US$1250/MT mark, but most CFR China offers for November were indicated above the 1300 dollar mark.
Amid restricted avails, LDPE prices rose to US$1580/MT in Asia in the week of November 1, 2010. Most CFR China November shipment deals were concluded at these levels. Few small deals from Middle East were concluded above the 1600 dollar level. In addition to this ongoing general tightness, shutdowns on the part of several Southeast Asian LDPE suppliers have intensified the regional shortage.
LLDPE prices have firmed to US$1325/MT in Asia in the week of November 1, 2010. CFR China deal for material from Taiwan was concluded for November shipment at US$1350/MT levels. LLDPE film is being used as a substitute for LDPE film and has benefited from the shortage of LDPE film.
Bullish markets have propped up PP prices to US$1375/MT in Asia in the week of November 1, 2010. In Southeast Asia, tight supply along with strong demand from China has helped push spot PP prices higher. Though selling intentions continue to rise, restart of some PP plants in the region is expected to ease the current supply concerns. The increases have come despite fluctuating crude oil prices, hesitant demand in China as a result of the Chinese Central Bank’s recent decision to raise interest rates, along with the lower spot propylene costs, which have been posting gradual decreases since the middle of October in Asia (total decrease of US$55/ton since then), as per Chemorbis. Limited PP availability for overseas cargoes was cited as the main reason for sellers’ initial hike announcements.
As most November shipment deals have been concluded at these levels, PVC prices have stabilized at US$1000/MT in Asia in the week of November 1, 2010. Players in India report that PVC offers in the import and domestic market are moving lower this week owing to lackluster buying interest from converters, as per Chemorbis. Converters are expecting to see some additional price declines in the days ahead as their customers because of sufficient end product stocks with the customer, who are showing little interest in making new purchases at the present. While traders acknowledged that demand is relatively sluggish at the present, one trader said that they remain hopeful that demand will begin to pick up following the Diwali holidays in early November.
Amid raised offers from sellers, polystyrene prices have remained high in Asia in the week of November 1, 2010. Few November shipment CFR China deals for GPPS were concluded at US$1375/MT levels, while deals for HIPS were concluded at US$1450/MT levels.
As sellers raise offers, ABS prices have spiked past US$2055/MT in Asia in the week of November 1, 2010. November shipment ABS offers have been hiked to near all time highs past US$2100/MT.