Price trends of oil, feedstocks & commodity polymers for 23rd April 2007

SUMMARY Oil price increased to US $ 66/barrel in the week of 23rd April 2007. It is likely to remain around US $ 65/barrel in May 2007. Naphtha declined due to weaker demand of its derivatives. However, an increase in the price of oil could make the price higher in May 2007 . Ethylene & VCM increased in price due to higher price of oil along with good market for their derivatives. On the other hand styrene declined despite of higher feedstock prices. Propylene & EDC remained inactive. LDPE, LLDPE & PP remained flat due to weaker market conditions while HDPE, PVC, GPPS & ABS increased partly because of higher feedstock prices & also be some revival of market as well as tighter supplies. May 2007 could see increase in feedstocks & all commodity polymers. Oil price will determine the price trends in May 2007 because most of the commodity polymer markets are rather lukewarm. OIL Oil increased to US $ 66/barrel on Nymex & US $ 68/barrel on Brent in the week of 23rd April 2007. Oil appears to gain to some extent. It is quite likely that oil will continue to remain higher at the level of US $ 65/barrel in May 2007 NAPHTHA Naphtha declined to US $ 677/MT in the week of 23rd April 2007 partly due to lower price in oil in last few days of the previous week Also its derivatives appear to be quiet. No deals have been announced for May 2007 but the price is likely to go up due to hardening of oil. It may touch US $ 680-690/MT in May 2007. POLYMER FEEDSTOCKS ETHYLENE Ethylene price increased steeply to US $ 950/MT in the week of 23rd April 2007 due to strong demand from South Korea. The suppliers were also interested in increasing margins on ethylene production. Further increase is expected. It is quite possible that the price could touch US$1000/MTin May 2007. PROPYLENE Propylene price remained stable with a very small fluctuation around US $ 1100-1105/MT in the week of 23rd April 2007. It is expected to remain range bound around US $ 1100-1120/MT in May 2007. The supply seems to be getting tight. This could raise the price of propylene. Any increase in oil price would be further reflected in the increase in the price of propylene in May 2007. EDC The price of EDC continued to remain at US $ 400/MT in the week of 23rd April 2007. Increasing activity & demand of PVC in Asia could lead to increase in the price of EDC. It is quite possible that EDC could go up to US $ 410-420/MT in May 2007. VCM VCM price increased to US $ 770/MT due to increasing activity in PVC market. It is likely to go up to almost US $ 800/MT in May 2007. The supply situation is not improved yet & the supply is quite tight. STYRENE Last week's steep increase in price could not be sustained due to rather lackluster market conditions. As a result the price fell back to US $ 1290/MT in the week of 23rd April 2007. May 2007 may see some hardening due to higher price of oil, naphtha & benzene. It is quite possible that the price of styrene could reach US $ 1320/MT in May 2007. POLYMERS LDPE LDPE remained stable at US $1350/MT in the week of 23rd April 2007. Tight supplies keep the price stable However, the market appears to be lackluster. LDPE is likely to remain in a narrow range of US $ 1350-1360/MT in May 2007. LLDPE LLDPE continued to remain stagnant at US $ 1280/MT in the week of 23rd April 2007 as the demand from China was weak. It is likely to remain sideways around the same price in May 2007. HDPE A stronger demand of HDPE in non Asian region increased the price of HDPE marginally to US $1285/MT in the week of 23rd April 2007 Further price increase can not be ruled out. It is expected that the price in May 2007 could go up to US $ 1300/MT PP Thin transactions due to weaker demand in Asian countries kept the price of PP at US $ 1260-1270/MT in the week of 23rd April 2007. It is not likely to move upwards in May 2007 & remain at the same level of US $ 1260-1270/MT. PVC PVC continued to remain stronger due to good market in China on account of seasonal demand. The price reached US $ 920-930/MT in the week of 23rd April 2007. It is likely to remain harder in May 2007 & could go up to US $ 940/MT in May 2007. PS Higher styrene monomer price finally increased the price of GPPS beyond US$ 1410-1420/MT in the week of 23rd April 2007. It could rise due to higher naphtha, benzene & styrene monomer prices. Only market conditions could prevent a sharp increase. It could reach US $ 1420/MT at the most in May 2007. ABS Higher feedstock prices compelled the producers to raise the price of ABS to US $ 1600/MT in the week of 23rd April 2007. For May 2007 the price of US $ 1620-1630 can not be ruled out.