Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended November 23, 2009

24-Nov-09
CRUDE OIL Oil prices ended the week of November 23, 2009 above US$78 a barrel, as tensions mounted between Iran and the Western countries. Mid week, oil prices in New York stood at US$76.7, while London's Brent North Sea crude settled at US$77.2. Oil prices saw a marginal dip mid week amid a strengthening dollar and concerns over sustainable economic recovery. Fresh economic data from USA this week did not ease recovery concerns as it showed slightly hotter-than-expected reading of prices at the consumer level, a smaller-than-expected increase in industrial production, unexpected declines in housing starts and building permits and a jobless claims report that failed to drop below the 500,000 mark as expected. Oil investors tracked the global stock and foreign exchange markets, as shares continued to give up gains in Asia, Europe and USA on corporate and economic recovery worries. In Japan, investors were worried that persistently falling consumer prices could threaten economic recovery. NAPHTHA Naphtha prices have risen by over 25 dollars, past US$710/MT in Asia in the week of November 23, 2009. In the month of November alone , naphtha prices have gained over US$50/MT, rising past US$710/MT CFR Japan, to reach 2009-highs this week. Possible causes could be firming naphtha prices in Europe and support from ethylene prices in Asia that have increased by over US$115/MT in the month. Open-spec prices for H2-December delivery rose to over US$710/MT CFR Japan. ETHYLENE Ethylene prices have mounted to US$1040/MT in Asia in the week of November 23, 2009. Spot ethylene prices are at their highest level since mid-July, and are estimated to be rising on robust demand from China as well as limited avails in the region on reduced supplies from Iran, the largest Middle East supplier of ethylene to Asia. Throughout 2009, Iran’s crackers have been running at 50-60% run rates due to lack of gas feedstock and a recent sudden shutdown of Marun Petrochemical’s 1.1 mln tpa cracker. Ethylene exports from Iran have plunged in 2009 to about 450,000 tons from levels less than 700,000 tons in 2008. Offers for December shipment were pegged above US$1055/MT FOB Korea. The Asian markets are yet to feel the impact of the new polymer capacities in the Middle East. PROPYLENE Propylene prices have spiked by about 45-50 dollars to US$1085/MT in Asia in the week of November 23, 2009 on buoyant derivative market outlook amid inadequate sellers offers. Spot propylene prices have risen by over US$55/MT this month, mainly due to low levels of inventory in Asia. EDC EDC prices have gained marginally to rise to US$400/MT in Asia in the week of November 23, 2009 amid optimistic ethylene market outlook and firming prices of derivatives PVC and VCM. CFR China offers have spiked past US$420/MT levels, while buyers have expressed an interest about 20-25 dollars lower. VCM VCM prices have steadied at US$695/MT in Asia in the week of November 23, 2009 as the market awaits offers for next month. Despite absence of December offers so far, it is estimated that sellers will hike offers as the market outlook is viewed as buoyant in line with robust derivative PVC demand amid restricted avails. STYRENE MONOMER Styrene Monomer prices have spiked past the 1100 dollar mark to US$1105/MT in Asia in the week of November 23, 2009. H2 December FOB Korea offers have mounted by over 5 dollars on restricted avails due to supply concerns raised by plant outages and rising feedstock costs. FOB Korea benzene prices have also seen a sharp jump past US$900/MT this week. Polymers HDPE Persistently rising HDPE prices in Asia spiked past US$1255/MT in Asia in the week of November 23, 2009. CFR China offers for film grade from the Middle East were heard at US$1255-1270/MT levels, while film grade from Taiwan and South Korea was heard offered about 20 dollars higher. High prices were supported by optimistic ethylene prices and market outlook, coupled with healthy demand. Deals for next month for film grade have been heard concluded at around US$1255-1260/MT CFR China. Prices are under pressure on supply constraints in Thailand and Malaysia. Also affecting supplies is the planned shutdown for expansion of Haldia Petrochemicals’ PE plant in India that has met with trade union problems and has come to a standstill within a few days of commencement. Supplies could get balanced shortly as end of month, Thailand's PTT Chemical is scheduled to bring onstream its 300,000 tpa HDPE plant at Map Ta Phut, and by end of next month- Sinopec Tianjin plant with similar HDPE capacity is expected to come onstream. LDPE LDPE prices climbed sharply to US$1395/MT in Asia in the week of November 23, 2009 on supply constraints amid robust demand in the region, particularly from China. Demand from China’s agriculture and packaging sectors continues to be healthy. Most CFR China offers for next month drove past US$1400-1415/MT from the Middle East and past US$1450/MT from South Korea. Market outlook continues to be upbeat on rising feedstock costs. LLDPE Healthy demand from China amid tight avails has bolstered LLDPE prices to US$ 1300/MT in Asia in the week of November 23, 2009. After successful conclusion of deals at these levels, offers for next month shipment have been hiked by about 30-50 dollars. The market could get a respite in prices as Sinopec Tiajin gets its 300,000 tpa plant onstream by end of December. POLYPROPYLENE Polypropylene prices inched up to US$1155/MT in Asia in the week of November 23, 2009 in line with rising propylene values. Rising input costs amid firm buying sentiments have been witnessed in China’s polypropylene markets, however, sentiments have been damp in Southeast Asia. Very few deals were heard concluded as the market awaits offers from South Korean sellers. Deficient stockpiles have kept South Korean sellers from giving firm offers for next month shipment. Few CFR China offers for yarn/injection grade were heard at US$1180/MT from South Korea as well as Taiwan. POLY VINYL CHLORIDE Polyvinyl Chloride prices mounted to US$885/MT in Asia in the week of November 23, 2009 on escalating feedstock values and yet another price hike in domestic markets of China. As the market outlook continues to be optimistic, December shipment FOB offers were hiked by Chinese PVC producers for exports, while CFR China offers from Taiwan and Thailand were increased to US$875/MT, while those from Japan were hiked by another 20 dollars. POLYSTYRENE As feedstock SM and benzene values intensify, GPPS prices have inched past US$1170/MT in Asia in the week of November 23, 2009. December shipment CFR China offers were increased to US$1175-1195/MT levels, with deal conclusion heard about 20 dollars lower. HIPS prices also moved north in line with rising input costs. ABS In line with rising feedstock costs, ABS prices have risen to US$1465/MT in Asia in the week of November 23, 2009 December shipment offers were hiked from South Korea to hover below US$1500/MT and about 20 dollars higher from Taiwan.
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