Crude oil prices have moved up to end the week of October 25, 2010 at US$81.7 on the Nymex while Brent crude for December traded at US$83.4 on the ICE Futures Europe exchange. An on going strike in France is expected to lead to a rise in French demand for imported fuel. A widespread refinery and port strike in France has exhausted supplies in the Europe. Nationwide strikes over pension reforms have spread to France’s 12 oil refineries, adding to the impact of a multi-week strike at the country’s largest oil port, Fos-Lavera. Concerns that a tropical storm could gain strength and move toward Mexican oil fields. The markets are rife with speculation that slowing fuel demand will lead to a rise in inventories in USA.
Naphtha prices dipped to US$765/MT in Asia in the week of October 25, 2010. Mid week, after dipping below US$650/MT, Asian naphtha prices recovered, while cracks eased as demand for H2-November cargoes tailed off. Demand from South Korea for November cargoes is almost over, making the markets weaker as sellers still have cargoes. Some parcels from Saudi Arabia were moved to the West last week to help ease the high supplies in Asia. India’s Reliance has scheduled a shutdown of a crude distillation unit (CDU) for maintenance at its 660,000 bpd refinery in for around a month. RIL is expected to reduce its naphtha exports as it may have to re-divert parcels streaming from its newer 580,000 bpd refinery to plug the production gap to meet domestic demand.
Ethylene prices have plunged to US$1070/MT in Asia in the week of October 25, 2010, as demand in Asia turned sluggish. Market outlook and sentiments have become pessimistic on sluggish demand amid improved supplies.
Propylene prices have dropped to US$1130/MT in Asia in the week of October 25, 2010 on lackluster demand amid healthy supplies form producers.
Amid jaded demand, EDC prices have stagnated at US$555/MT in Asia in the week of October 25, 2010. As the market sentiments dulled, very little activity was seen in the region. Offers were heard at US$575-595/MT, while bids remained pegged at last weeks’ levels.
Amid raised offers from sellers, VCM prices have moved up to US$875/MT in Asia in the week of October 25, 2010. Offers have been heard at the nine hundred dollar mark, while buying interest remains pegged about fifty dollars lower. The markets await deal conclusion for November shipment.
As feedstock naphtha and benzene prices dip, SM prices have fallen to US$1245/MT in Asia in the week of October 25, 2010. November shipment offers were reduced to US$1260-1265/MT levels, but buying intention remained dull. Markets were lackluster as buyers were unwilling to purchase fresh cargoes. Sentiments in feedstock benzene market were soft due to bearish aromatics market sentiments. Benzene offers were heard at US$975/MT levels, while bids were pegged almost 20-25 dollars lower.
Moving up to US$1275/MT, HDPE prices in Asia have remained strong in the week of October 25, 2010. November shipment CFR China offers for film grade from Taiwan and South Korea were heard at US$1315-1320/MT levels. Rising import prices as well as a firm trend in the Chinese PE market have also lent support to the upward trend in the region’s local markets.
As tight supplies persisted, LDPE prices have moved up to US$1565/MT in Asia in the week of October 25, 2010. December shipment offers from Middle East were heard just below 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. Shutdown at Titan Petrochemicals’ 230,000 tpa LDPE plant in Malaysia for three weeks, as well as lack of offers from a Thai film producer is adding to market tightness. In addition to ongoing plant issues, converters commented that the recent floods in Vietnam and Thailand have disrupted operations at plants in flood-affected areas as well as led to some transportation bottlenecks. Rising import prices as well as a firm trend in the Chinese PE market have also lent support to the upward trend in the region’s local markets.
As supply tightness persists, LLDPE prices continue to rise in Asia, rising to US$1315/MT in the week of October 25, 2010. Offers from Asian producers have been pegged at US$1350/MT. LLDPE film is being used as a substitute for LDPE film and has benefited from the shortage of LDPE film. Rising import prices as well as a firm trend in the Chinese PE market have also lent support to the upward trend in the region’s local markets.
Optimistic market outlook and trend has propped up PP prices to US$1355/MT in Asia in the week of October 25, 2010. CFR China offers for few grades were heard at US$1365-1380/MT levels.
PVC prices have stabilized at US$1000/MT in Asia in the week of October 25, 2010. Despite fresh November shipment offers at the thousand dollar mark from Thailand and Taiwan, prices saw very little movement. Japane’s Taiyo quoted November CFR China offers at US$1000/MT CFR China, while Shinetsu issued its offers at US$1010/MT. In line with sellers’ earlier hike targets, November PVC offers were announced with monthly increases to China this week. A Taiwanese producer reported lack of any sales pressure at the moment while holding normal inventory levels. At the start of the week, sellers reported to be receiving a good number of inquiries from customers.
Despite lackluster demand, major suppliers maintained GPPS offers for November at last week’s US$1305/MT CFR China in the week of October 25, 2010. Sellers are unwilling to reduce offers due to high feedstock cost pressure. Offers for HIPS were heard at US$1500/MT CFR China for November.
ABS offers stagnated at last week’s US$2005/MT in Asia in the week of October 25, 2010, amid lackluster transactions. Under high feedstock pressure, sellers kept November CFR China offers at US$2075/MT despite buying intention pegged at the two thousand mark.