From levels of US$46 a barrel at the beginning of the week, oil prices dipped by 3.5% in the week of Feb 9, 2009. New York's main futures contract, light sweet crude for March ended the week at US$39.6 on concerns over heated debate on a massive stimulus plan by the US President's administration coupled with another round of poor company earnings and job cuts in USA. Earlier in the day, prices were boosted by news of plans by OPEC nations to defer, until prices recover, drilling projects amid a deepening global economic slowdown, as low crude prices have acted as a deterrent to investments.
Despite falling oil prices, naphtha prices in Asia have witnessed an uptrend, rising by over fifty dollars in the week of Feb 9, 2009. Rising naphtha prices in the continent are an indication of a recovery in demand and optimistic downstream outlook, as petrochemical demand starts recovering in Asia on the return of the Chinese buyers after the Lunar New Year break. Open-spec naphtha values for H1-March delivery ended the week at US$450/MT CNF Japan.
Petrochemical demand has picked up in Asia on the return of the Chinese buyers after the Lunar New Year break. Robust demand from derivative polyethylene markets has improved demand for ethylene in Asia, pushing prices up to US$655/MT in the week of Feb 9, 2009. Supported by rising naphtha values and strengthening downstream demand, sellers have inflated CFR FE offers by about fifty dollars. However, buying intentions continue to be pegged at around the 650 mark, maintaining a fifty dollar gap between seller's offers and buying bids.
Shortage of feedstock naphtha to crackers in the region has propelled propylene prices by over 75 dollars in Asia in the week of Feb 9, 2009. After conclusion of FOB Korea deals at US$640 last week, sellers have hiked offers above the 700 dollar mark on limited avails. Producers cannot raise run rates in response to improving demand due to raw material paucity. Even as the Chinese buyers return to the markets, buying intentions have not yet risen in tandem with sellers offers.
After a few deals for February shipment were concluded at US$570/MT CFR Asia, VCM prices have stagnated in Asia due to absence of buyer's bids and seller's offers in the week of Feb 9, 2009. Restricted avails in the region could prompt sellers to hike offers for March, while buyers continue to wait and watch downstream PVC market development.
Restricted avails in the region coupled with advancing ethylene prices have exacerbated EDC prices to US$185/MT in Asia in the week of Feb 9, 2009. As caustic soda prices deteriorate, EDC supplies are anticipated to get constrained, and there exists a possibility of a hike in seller's offers by over fifty dollars. However, under current market conditions a boost in buying intentions seems unlikely.
March shipment Styrene Monomer prices have increased to US$685/MT in Asia in the week of Feb 9, 2009. In tandem with increasing feedstock benzene values and bullish market outlook for aromatics in Asia, FOB Korea buying intentions were pegged about US$675/MT against seller's offers about twenty dollars higher. Feedstock benzene have spiked past the 400 dollar mark as outlook fro aromatics seems optimistic.
Upbeat demand from China, as players return to the markets after the Lunar New Year break, has elevated CFR China HDPE prices to US$940/MT in Asia in the week of Feb 9, 2009. After successful conclusion of February shipment deals for film/yarn grade at US$925/MT CFR China, few offers from Thailand as well as South Korea for March shipment have been hiked by about 30-40 dollars. As market sentiments remain positive, March offers from Taiwan are also expected to open about 30 odd dollars higher.
As feedstock ethylene prices rise, LDPE markets gained strength in Asia. Feb end/ March offers rose to US$950/MT in the week of Feb 9, 2009. After successful conclusion of deals at these levels, several CFR China offers have been hiked by an additional 20-30 dollars.
In line with rising ethylene values, LLDPE prices in Asia have risen to US$945/MT CFR China in the week Feb 9, 2009. Feb shipment offers have been raised further on the back of higher feedstock values.
The return of the Chinese players to the market after the Lunar New Year break has marked the revival of petrochemical demand in Asia. Like the other polymers, price of polypropylene has climbed up to US$835/MT in Asia in the week of Feb 9, 2009 on limited avails in the region. As feedstock propylene prices escalate, February shipment offers from South Korea for yarn, injection and copolymers have crossed the US$850 mark.
Awaiting next month offers, Polyvinyl Chloride prices have steadied in Asia at last week's US$675/MT CFR China in the week of Feb 9, 2009. A price hike is expected by sellers in Taiwan and Japan in line with increasing input costs, evident in increased values of few offers for March shipment by about 20 dollars. Buying interest continues to be pegged about ten dollars lower.
Rising styrene monomer prices have pushed up polystyrene prices to US$780/MT in Asia in the week of Feb 9, 2009. Typical offers have been hiked this week by atleast 40 dollars vis a vis prices seen pre-Lunar holiday break. CFR China offers from Taiwan and Thailand have crossed the US$800 mark as buying interest from China improves to US$775 levels.
ABS prices have moved up to US$1060/MT, as demand has perked up with the return of the Chinese players to the market after the Lunar New Year break. March shipment CFR China offers from South Korea and Taiwan have been hiked by 15-20 dollars in tandem with rising input costs.