Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended October 18, 2010

19-Oct-10
CRUDE OIL Crude oil ended the week of October 18, 2010, lower than the past week. Crude for November delivery fell by almost one and a half dollar to US$81.2 on the Nymex. Brent crude for December dipped to US$82.4 on the ICE Futures exchange in London. Crude oil prices have tanked to their lowest level in two weeks as the dollar strengthens. The Dollar Index, which tracks the US currency against 6 of its major peers, rebounded from a 10 month low after technical indicators suggested further declines would be difficult to sustain. Declines were seen in the dollar, a day ago, after US Federal Reserve Chairman said additional monetary stimulus may be warranted. Rising retail sales in USA in the month of September have eased consumer concerns. NAPHTHA Despite weakening oil prices, naphtha prices in Asia have moved up to US$765/MT in Asia in the week of October 18, 2010, as markets resume activity and demand revives after a long break. Open-spec prices for H1-November delivery closed a tad above US$765/MT CFR Japan. An on-time restart was seen at Idemitsu Kosan’s 256,000 tpa naphtha cracker at Tokuyama plant that was shut since Sept. 6. About 55,000 tons of naphtha sailed to the West from Saudi Arabia, likely from Rabigh and Yanbu, mostly due to high supplies in the region. Demand has picked up in Europe, affected by a port strike in France which has paralysed the country’s oil refining industry. The French strike is definitely boosting sentiment, but that is driven by a panic reaction rather than short supplies. ETHYLENE As limited transactions were concluded this week, ethylene prices have stagnated at US$1135/MT in Asia in the week of October 18, 2010. As sentiments in derivative Polyethylene and MEG markets picked up, sellers mulled a hike in offer prices. They were, however, unsuccessful because Asian demand was not seen strong enough to absorb the increases. PROPYLENE Amid robust downstream PP market outlook and demand, propylene prices spiked to US$1170/MT in Asia in the week of October 18, 2010. EDC As PVC market outlook turns bullish, EDC prices have spiked up to US$555/MT in Asia in the week of October 18, 2010. Sellers quoted CFR China offers at an elevated US$575-595/MT. VCM As EDC continues to move north, and PVC market sentiments and outlook strengthen, a firm trend in VCM prices persists. VCM prices pushed up to US$865/MT CFR China. STYRENE MONOMER As feedstock naphtha and benzene prices rise, Styrene Monomer prices have moved north to US$1275/MT in Asia in the week of October 18, 2010- few deals were heard concluded at these levels. November shipment FOB Korea offers were heard at US$1280-1285/MT, as benzene prices rose to US$960/MT levels. POLYMERS HDPE HDPE prices have spiked up to US$1255/MT in Asia in the week of October 18, 2010 as demand strengthens amid restricted supplies. After successful conclusion of deals at US$1255-1260/MT levels, CFR China offers for November shipment were heard from a South East Asian producer about twenty dollars higher. An uptrend is expected in the next few weeks as a deal for November was conclude for Taiwanese cargoes at the 1300 dollar mark. LDPE As China returned to markets with renewed vigour after the National Day Holiday, LDPE prices spiked to US$1525/MT in Asia in the week of October 18, 2010. Buyers have attributed rising demand to tight supplies within the region as well as the ongoing price increases in Asian markets, as per Chemorbis. Chinese buyers are showing healthy demand for LDPE film, with some Southeast Asian sellers electing to allocate their supplies to China rather than the regional market. Globally, LDPE supply remains limited as new LDPE capacities are not coming up at the same rate as HDPE and LLDPE. In addition to this ongoing general tightness, shutdowns on the part of several Southeast Asian LDPE suppliers have intensified its regional shortage. Titan Petrochemical shut a 230,000 tpa LDPE plant in Malaysia for three weeks last week for maintenance shutdown. Although Thai PTT has recently begun commercial operations at its new 300,000 tpa LDPE plant, players commented that another domestic LDPE film producer is not currently offering any material to the market. LDPE prices are rising at a faster rate than HDPE or LLDPE film prices. LLDPE After return to the markets post-National Holidays, strong demand from China has propelled LLDPE prices to US$1295/MT in Asia in the week of October 18, 2010. After successful conclusion of few deals for November at US$1320/MT, offers from South Korean producers have risen to US$1345/MT levels. POLYPROPYLENE Strong demand from China, post-National holidays, has pushed up PP prices to US$1325/MT in Asia in the week of October 18, 2010. Market sentiments and outlook continue to be robust. H1-November shipment, CFR China deals were concluded by South Korean and Middle Eastern sellers at US$1365/MT levels, and for Indian yarn/injection grades at around US$1325/MT levels. POLYVINYL CHLORIDE Amid robust demand , particularly from China, PVC prices strengthened to US$1000/MT in Asia in the week of October 18, 2010. PVC sellers in Southeast Asia report that their offers are meeting with significantly better demand. Converters have become more active in reaction to normal demand for end products requiring them to replenish their stocks. While demand from the construction sector is still sluggish, converters in the automotive sector are seeing better demand for their end products. Most buyers have revised sell ideas higher this week in response to improved demand from their customer. POLYSTYRENE Amid rising input costs, polystyrene prices have strengthened in Asia in the week of October 18, 2010. GPPS has shot up to US$1305/MT. As feedstock values rise and costs of production move up, CFR China November shipment offers have been heard at the US$1400 mark, and at US$1500 for HIPS. Prices continued with their firm trend in global markets including China, Southeast Asia, Turkey and Egypt, as per Chemorbis. Several styrene shutdowns in Asia have affected availability and prices in the monomer and polymer markets. PS prices see support from tight supplies as well as better demand in China- some converters have raised their operating rates by 10%. The current increasing trend is anticipated to remain in place although players comment that the pace of increases will not be as rapid as last week. ABS ABS prices have increased to US$2005/MT in Asia in the week of October 18, 2010, as oil, naphtha and other feedstock costs rise. Offers have been heard at US$2050/MT CFR China.
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