Crude oil prices ended the week of November 2, 2009 at US$77 a barrel on the Nymex on bearish economic data that upset confidence about a potential recovery in energy demand. In London, Brent crude settled at US$75.20 a barrel. Weaker consumer sentiments in USA for the month of October and a 0.5% dip in consumer spending in September served as a reminder that the economy is still struggling despite the previous day’s optimism about Q3-growth in USA. Higher equities and a weaker dollar have pushed crude prices up 9% in October as investors looked to wider economic data for signs of economic recovery and a potential rise in energy demand.
Naphtha prices have ended the week of November 2, 2009 on a subdued note of US$688/MT CFR Japan. Prices had spiked earlier in the week but ended the week lower on concerns of potential recovery of global economies and subsequently in energy demand. H1-December price indications were pegged a tad below US$690/MT CFR Japan.
Demand for short delivery has sustained prices of ethylene at US$900/MT in Asia in the week of November 2, 2009. Despite a fall in crude oil values, ethylene prices have remained healthy on a boost in spot demand caused by a hold up in shipment of cargoes from the Middle East. Sellers from South Korea have quoted FOB Korea offers above US$900/MT for end of month shipment.
Shrouded by supply concerns, propylene prices mounted to US$1015/MT in Asia in the week of November 2, 2009. Supply concerns abound in the region on possible shutdowns or run rate cuts by producers in Japan, Taiwan, South Korea. Formosa’s No1 and No 2 crackers could get shuttered for about 4 weeks, and in Indonesia, poor margins has compelled Chandra Asri to consider a run rate cuts at its 306,000 tpa plant. Buying intentions in the region, particularly from China lingered at the thousand dollar mark, whereas, November shipment FOB Korea offers from sellers from South Korea were heard about fifty dollars higher.
Despite stagnant derivative prices, EDC prices have returned to an uptrend, rising to US$345/MT in Asia in the week of November 2, 2009. This uptrend has been triggered by restricted avails in the region as deep-sea cargoes started drying up. CFR China buying intentions perked up to US$335/MT in response to sellers CFR offers raised to US$370/MT as the deluge of deep sea cargoes dwindled.
VCM prices approached US$680/MT in Asia in the week of November 2, 2009 for November shipment, strengthening on restricted availability in the region. Downstream demand was seen stabilizing in the week, with offers mounting to levels slightly below US$700/MT.
Sluggish feedstock ethylene and benzene markets have pulled down Styrene Monomer prices in Asia to US$990/MT in the week of November 2, 2009. As crude oil and feedstock market outlook turns bearish, demand for SM has become lackluster with limited deal conclusion, pulling down December offers. Benzene prices dipped to US$985/MT in line with falling crude oil prices as well as subdued demand from buyers in the region.
Robust demand has propped up HDPE prices to US$1220/MT in Asia in the week of November 2, 2009. CFR China deals for yarn/injection grades were concluded at US$1200/MT levels. CFR China deals for November shipment for film grade HDPE from Taiwan and South Korea were concluded between US$1210-1230/MT in response to offers ranging from US$1225-1245/MT.
As supply tightens in the region, November LDPE prices have moved up to US$1265/MT in Asia in the week of November 2, 2009. Typical CFR China offers range from US$1245 to a tad below the 1300 dollar mark. As the supply scenario tightens, few sellers from South Korea have raised November shipment CFR offers to US$1340-1345/MT to South East Asia.
The price hike in LLDPE prices persists in Asia on supply concerns in the region. Prices rose to US$1240/MT in the week of November 2, 2009. Most CFR China offers for November skirted around US$1250/MT from sellers in Asia as well as the Middle East. Cargoes for end November from USA traded at US$1240/MT CFR China. Favourable natural gas prices in USA have resulted in ethylene being offered at a sharp discount, resulting in a wide gap in prices in USA and Asia/Europe. Hence, PE offers from USA have been very competitive. Falling ethane values, an ease in the supply scenario and lack of buying enthusiasm pulled down ethylene prices in USA to less than US$700/MT. Demand in Asia seems to be minimalist on uncertainty about future market direction.
Polypropylene prices in Asia stagnated at US$1125/MT due to lack of deal conclusion despite November offers. Sellers from Taiwan and South Korea have hiked November offers for yarn/injection grades to levels of US$1140-1150/MT CFR China. CFR China deals for cargoes from Middle East have been concluded below the 1100 dollar mark. Buyers prefer to adopt a wait and watch stand in expectation of a supply glut in the region from several plants across Middle East and China. Al-Waha Petrochemical Co. in Dubai has announced start up at its new complex, which includes a 450000 tpa polypropylene (PP) plant. Yanbu National Petrochemical (YANSAB)’s 400,000 tpa polypropylene plant that was started up in July and shuttered in the next month, is ready for restart. 3 PP plants are scheduled for start up in China- Panjin Petrochemical with capacity to produce 250,000 tpa, Jinxi Petrochemical, part of CNPC, with capacity of 150,000 tpa and Da Tang Inner Mongolia with capacity to produce 460,000 tpa.
POLY VINYL CHLORIDE
Polyvinyl Chloride prices have stabilized at US$845/MT in Asia in the week of November 2, 2009 on weak buying sentiments in the region, particularly from China. Unenthusiastic buying sentiments have kept offers for November at US$860/MT from Thai and Taiwanese sellers. Few CFR China deals were concluded for Japanese cargoes at US$840/MT. Prices for November are estimated to be softer on sluggish buying on a seasonal downturn in PVC demand in China. PVC pipe makers are compelled to reduce operating rates or shut down their plants completely in winter as demand wanes. Also exports from USA are conventionally higher towards yearend in an effort to lower inventory levels.
Despite limited deal conclusion and weakening SM values, CFR China GPPS prices have inched up to US$1145/MT in Asia in the week of November 2, 2009 on raised offers. November deals have been settled at US$1140/MT CFR China levels by sellers from South Korea for November 4, 2009, while the market awaits offers for next month. Offers raised by sellers from Taiwan indicate an uptrend. However, as the high demand season in China has come to a close, buying interest is beginning to wane. The slow demand season points to a slight pessimism in market outlook and could trigger a price reconciliation by sellers. CFR prices for HIPS were evaluated at about US$1225-1240/MT.
Rising feedstock ACN and butadiene values have pushed up CFR China prices in Asia to US$1455/MT in the week of November 2, 2009. After successful deal conclusion at levels of US$1250/MT CFR China, sellers have hiked offers by about ten dollars, while a South Korean producer has increased November offers to about US$1475/MT CFR China.