Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended August 10, 2009

CRUDE OIL US crude settled at US$71 a barrel, retracing losses recorded earlier in the week of August 10, 2009; while London Brent crude settled at US$74 a barrel. Oil prices have steadied at these levels, cutting back earlier losses sentiments of economic recovery strengthened and the dollar fell. Though there was an increase in the total number of people seeking jobless benefits, the new report indicates an improvement in the economy. Midweek, oil prices dipped below US$72 and natural gas prices tumbled on more evidence of consumer anxiety and rising supplies of unused crude and natural gas. NAPHTHA Naphtha prices have spiked by almost fifty dollars in Asia in the week of August 10, 2009 under the influence of steadying oil prices and lower volumes of naphtha cargoes from NWE and the Mediterranean. Contrary to earlier expectations, naphtha supply situation in Asia could be tight next month. About 500,000 tons from NWE and 90,000-120,000 tons of paraffinic quality from USA are expected in Asia. Supplies from the Mediterranean have tightened considerably as one single Chinese user has grabbed all term contract volumes for the next three months. Europe’s naphtha exports to Asia could witness a fall in September, as imports from northwest Europe (NWE) dwindle. Open-spec naphtha prices for H1-September shipment rose to US$650/MT CFR Japan. ETHYLENE Increased supplies and anticipated arrival of cargoes from the West have brought down ethylene prices to US$1085/MT FOB Korea in the week of August 10, 2009. Next month shipment prices have dropped to range lower than US$1000/MT, pushing several buyers to adopt the wait and watch policy. As buyers await a further price correction, they have curtailed buying despite optimistic downstream PE markets. PROPYLENE Restricted avails have firmed up propylene prices to US$1095/MT FOB Korea in Asia in the week of August 10, 2009. September shipment offers ranging from US$1085-1100/MT, have met with buyers resistance. Buyers choose to wait in the sidelines as they do not favour a buying decision at such high rates. EDC Inadequate supplies in the region have pushed up EDC prices to US$515/MT in Asia in the week of August 10, 2009. September shipment offers have spiked past US$550/MT as persistent supply deficiencies will not be addressed immediately as advent of deep-sea cargoes has been curbed. Buying intentions were pegged about 20-25 dollars lower than offers. VCM Unenthusiastic markets and lack of deal conclusion have stagnated VCM prices in Asia at US$725/MT in the week of August 10, 2009. As the market awaits offers for September, a price hike is expected. As input EDC costs rise, and stockpiles shrink, sellers plan to hike offers for next month. STYRENE MONOMER Robust demand has spiked Styrene Monomer prices by almost 90 dollars to US$1160/MT in Asia in the week of August 10, 2009. After successful conclusion of FOB Korea deals for September shipment at US$1170/MT, market prices have been evaluated at US$1165-1175/MT. Feedstock benzene prices continue to rise to US$910/MT FOB Korea. POLYMERS HDPE An upward revision by most sellers has elevated HDPE prices in Asia to US$1315/MT CFR China for September in the week of August 10, 2008. CFR China offers from Taiwan and South Korea for film grade was heard at US$1315/MT levels, and few deals were concluded about 10-15 dollars lower. Deep sea cargoes for blow molding grade also rose by 20 dollars from last weeks’ levels of US$1165-1185/MT. In the January-May period, HDPE imports from US rose by a staggering 65%. Demand continues to rise this month, particularly for HDPE pipes, triggered a boom in construction sector influenced by the Chinese Government’s economic stimulus package. LDPE Demand for agricultural LDPE film in China has been boosted by the Government’s program to increase output. As agricultural film demand is near it’s peak in China, upbeat buying and seller conviction about optimistic market outlook have propped up LDPE prices in Asia to US$1315/MT CFR China in the week of August 10, 2009. September offers from the Middle East rose to levels of US$1325/MT, with deals concluded about 20 dollars lower. LLDPE Increased demand from the agricultural sector has increased market optimism, pushing up prices to US$1295/MT CFR China in the week of August 10, 2009. Offers have been elevated to US$1300/MT levels, while deals have been concluded about ten dollars lower. POLYPROPYLENE Moving in line with increased propylene values, polypropylene prices have increased by 15-20 dollars in Asia in the week of August 10, 2009 to US$1180/MT. Not much activity was seen in the markets, as most August shipment deals have been concluded and the market awaits major offers for September. Deals for CFR China yarn and injection grade were concluded at around US$1200/MT in response to offers from South Korean producers about 20 dollars higher. Cargoes from the Middle East were sold for end of month shipment at US$1170/MT levels. PP prices are not expected to be upbeat in the coming weeks as additional supplies swamp the market from PetroRabigh’s 700,000 tpa plant, and from increased capacities from India’s Reliance. POLYVINYL CHLORIDE Polyvinyl chloride prices in Asia have stagnated at US$900/MT in the week of August 2009, as the market awaits next month offers. On the buyer’s side, demand has dulled on increasing stockpiles triggered by advent of overseas cargoes. September shipment export offers from China increased to US$875/MT from carbide based producers and US$900/MT from ethylene based producers. GPPS Increasing feedstock values exerting cost pressures on producers, have pushed up GPPS prices to US$1195/MT in Asia in the week of August 10, 2009. As buying sentiments perk up, September shipment offers from Taiwan and South Korea have been increased to US$1215-1245/MT CFR China. Offers for HIPS grade increased to US$1325-1355/MT CFR China and to US$1365/MT CFR Hongkong. ABS Rising input costs have compelled producers to increase ABS prices to US$1435/MT CFR China. As a price hike persists in feedstock butadiene, ACN and SM, September shipment CFR China offers from South Korea and Taiwan have been heard at US$1500/MT levels.
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