Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended April 20, 2009

CRUDE OIL Light sweet crude for May delivery ended the week of April 20, 2009, with a dip in New York prices to US$48.2 on the back of the strengthening dollar, weakening stock markets and listless US energy demand. Mid way through the week, prices fell to hover around US$50 as a government report showed that inventories in USA climbed to the highest level in almost 19 years on deteriorating demand. The rising US currency makes dollar-priced crude more expensive for foreign buyers and tends to dampen demand. The euro dropped to one month low against the dollar on rising speculation that the European Central Bank will cut interest rates next month in a bid to counter recession. NAPHTHA As crude oil prices dip below the US$50 mark, and downstream markets soften, naphtha prices in Asia have dipped to US$450/MT in the week of April 20, 2009. Dipping by over ten dollars, open-spec naphtha ended the week at US$450/MT CNF Japan for H2 May delivery. ETHYLENE Ethylene prices dropped to US$690/MT in Asia in the week of April 20, 2009 as derivative polyethylene demand weakened and market outlook turned bearish. Most buyers in the region, particularly from China, have adopted a wait and watch policy as polyethylene markets changed course this week after many uninterrupted weeks of rising prices. Many market players attribute the current rise in prices mainly to replenishing of inventories, viewed as short term demand. PROPYLENE FOB Korea propylene prices have dipped to US$845/MT in Asia in the week of April 20, 2009 mainly due to deterioration of derivative polypropylene demand and weakening downstream prices. Another factor influencing softening of prices is an influx of deep sea cargoes from Europe, Africa and USA. STYRENE MONOMER FOB Korea Styrene Monomer prices plummeted to US$995/MT in Asia in the week of April 20, 2009 primarily due to muted downstream demand. Even as next month offers continue to drop, buyers prefer to wait in the sidelines and very limited bids were heard. Feedstock benzene prices dropped to US$630/MT in line with falling feedstock costs and softening derivative demand. VCM VCM prices have increased to levels of US$600/MT on active downstream PVC demand in Asia in the week of April 20, 2009. As the market awaits offers from sellers and for exports as well, most supplier offers are estimated to increase. After successful conclusion of deals at around US$575, offers are expected to increase by 40-50 dollars on enthusiastic demand from China. EDC EDC prices rose past US$305/MT in Asia in the week of April 20, 2009, in tandem with robust prices of downstream VCM and rising PVC prices coupled with restricted supplies. As demand from China strengthens along with supply constraints, CFR China offers have been quoted at US$350/MT. POLYMERS HDPE HDPE prices have fallen to US$1135/MT in Asia in the week of April 20, 2009 after several consecutive weeks of an uptrend. After successful deal conclusion for May shipment at US$1145/MT CFR China, offers continue to hover at these levels. However they are met with buyer reluctance that has resulted in a price dip of about 10-15 dollars. As sentiment in China has altered recently, falling domestic prices have weakened demand, resulting in muted markets in Asia. Bids for yarn grade hover around US$1175/MT despite successful conclusion of deals for next month shipment above the 1200 dollar mark. Prices could witness a drastic dip on news of easing supply as PetroRabigh’s plant comes onstream in Saudi Arabia. LDPE LDPE prices stagnated at US$1145/MT in Asia in the week of April 20, 2009 as a lull prevails in the markets awaiting firm May shipment offers. As market outlook turns pessimistic on altered sentiments in China after successive weeks of price hike, CFR China buying interest is hovering around US$1150/MT, while few cargoes are being quoted about fifty dollars higher. As domestic prices weaken in China, interest in other parts has dwindled as buyers anticipate a price correction. LLDPE Absence of firm offers for May shipment have muted market sentiments and got down LLDPE prices to US$1105/MT in Asia in the week of April 20, 2009. After successful conclusion of CFR China deals at US$1125-1150/MT, buyers are conspicuous by their absence as they await a price correction that could witness a drastic dip on news of easing supply as PetroRabigh’s plant comes onstream in Saudi Arabia. POLYPROPYLENE As domestic polypropylene prices fall in China and market outlook weakens, Asian prices have dropped to US$1065/MT in the week of April 20, 2009. Unenthusiastic demand from Chinese processors has led to absence of several buyers from the market, triggering a dip in May shipment offers. Most CFR China offers for May shipment have dipped to US$1070/MT and few to as low as US$1040/MT, but deals fail to get concluded at these levels, as buying bids from China are being heard at US$1050/MT in the face of deteriorating demand. POLY VINYL CHLORIDE PVC prices have stabilized at last week’s US$725/MT in Asia in the week of April 20, 2009. Despite a fall in domestic prices in China, Asian prices have not faced much resistance from the Chinese buyers and have continued to be steady, mainly due to restricted supplies in the region. CFR China deals for May shipment by producer in Taiwan were concluded at US$725-730/MT, and from Thailand and Japan at about 10 dollars higher. GPPS GPPS prices have dropped down to US$1115/MT in Asia in the week of April 20, 2009 as weakening feedstock prices have simmered down market outlook. Chinese demand has also dwindled on growing stockpiles, and as recent price gains were also due to re-stocking, markets have dampened as players are reluctant to buy at these levels. However, despite buyer opposition, sellers seem disinclined to reduced CFR China offers below levels of US$1185-1200/MT ABS ABS prices sustained at US$1495/MT in Asia in the week of April 20, 2009 in the absence of buyer’s bids. Despite unenthusiastic market sentiments, sellers were not in a position to lower offers as feedstock prices strengthened. May shipment CFR China offers from the Far East and Taiwan increased to hover around US$1545/MT amid dull buying activities.
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