Crude oil prices have ended the week of December 22, 2008 at new lows of US$33.8 in New York, mainly pushed down by lackluster demand. Earlier in the week, OPEC's biggest output cut in more than a decade failed to stop a price drop as recession sapped demand. Despite an announcement by OPEC of a record production cut of 2.2 mln bpd, oil prices have collapsed below US$40 for the first time since the summer of 2004. More economic data being released points to a long and severe recession globally. It was previously thought that China and other developing countries are impervious to a global recession, but recent happenings prove otherwise. US gasoline inventories continued to rise, on a major pullback by American motorists.
Customarily naphtha prices move in tandem with crude oil prices. But despite the drastic drop in crude oil values during the week, naphtha prices barely moved in Asia in the week of December 22, 2008. The strength in Asian naphtha prices was derived from strong prices in Europe. Open-spec naphtha for H2 January delivery closed at almost the same values as last week at US$310/MT CNF Japan.
Ethylene prices witnessed a quantum leap of almost hundred dollars to US$530/MT CFR China as buying sentiments improved in Asia in the week of December 22, 2008. Improving downstream polyethylene demand has moved up January shipment offers as producer deals were concluded at US$535/MT FOB Korea.
Propylene prices strengthened to US$475/MT FOB Korea/ 540/MT CFR China, in Asia in the week of December 22, 2008 as downstream polypropylene demand showed signs of recovery.
Styrene Monomer prices persevered at US$550/MT FOB Korea/590/MT CFR China in the week of December 22, 2008 in Asia on the back of restricted supplies. Prices were maintained despite a drop in upstream benzene values to US$310/MT FOB Korea in line with falling crude oil prices.
As downstream PVC demand picked up in China, VCM prices in Asia also turned optimistic, rising to US$500/MT CFR China for January. As sentiments buoyed up, sellers offers pushed above US$500/MT CFR SE Asia, even as buying intentions in South East Asia propped up to US$475/MT.
Improving upstream ethylene markets and recovering downstream VCM and PVC markets have bettered sentiments for EDC in Asia in the week of December 22, 2008. Buoyant market sentiments have propped up EDC prices to US$125/MT CFR China in Asia this week. January offers from Taiwan have been heard at US$150/MT though buying interest from China remains pegged a tad lower because of expected arrival of cheap deep-sea cargoes from USA being offered below US$120/MT.
Market sentiments have lifted in Asia, pulling up HDPE prices to US$855/MT in the week of December 22, 2008. Producer offers for January were heard from South Korea, Thailand as well as Malaysia at US$840-880/MTCFR China.
Deals for select US cargoes were concluded at US$850-875/MT CFR China, and buying intentions from Chinese players hovered at lows of US$855/MT. This has however, not succeeded in dampening offers from Asian producers. Limited availabilities in the region has prompted key South Korean players to raise CFR China offers for next month to over US$925/MT.
In an unusual move, despite the arrival of lower priced cargoes from USA key Asian producers have hiked offers in the week of December 22, 2008. CFR China offers from South Korea have been hiked upto US$900/MT on inadequate supplies in the region. Buying intentions were pegged lower as CFR SE Asia deals were concluded at US$875/MT.
Stockpiles are beginning to decline with Chinese producers, propping up polypropylene prices in the domestic markets. As a result, despite a lull in market activities, CFR China deals have been concluded at firmed up levels of US$785/MT. This has led to an increase in CFR China offers from South Korea to US$805/MT.
PVC prices stagnated at US$620/MT in Asia in the week of December 22, 2008 on damp buying interest. As domestic prices continue to head north in China, most sellers have offered material for January at US$630-655/MT despite lackluster buyers' sentiments. Select January shipment CFR China deals were heard concluded at US$625/MT, exhausting all offers for the month.
Perception by traders that the polystyrene markets of Asia have bottomed out has stirred buyers to perk up buying. As a result, GPPS prices have elevated to US$715/MT CFR China, as key sellers in South Korea and Taiwan raise CFR China offers against buying intentions recovering to US$700/MT. HIPS prices have also bettered by about 15-20 dollars.
Persistently deteriorating input butadiene and ACN prices along with weakening demand in the continent have pushed ABS prices down to US$1085/MT CFR China. Sellers offers from Taiwan and South Korea have climbed down to US$1100/MT CFR China, but dampened buying interest have led to conclusion of deals at new depleted levels about fifty dollars lower.