Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended July 27, 2009

CRUDE OIL An improvement in company performances beyond market expectations has set a positive note in oil price trends. Crude oil prices rose on optimistic outlook of the US economy due to better than expected performance results posted this quarter by several companies. Oil prices in New York rose to US$68/barrel in the week of July27, 2009. NAPHTHA Naphtha prices rose in tandem with rising oil prices and a buoyant outlook of the US economy this week. Prices spiked by over 25 dollars in the week of July 27, 2009 in Asia. Open-spec prices for H1-September shipment settled at US$585/MT CFR Japan. ETHYLENE Robust naphtha and crude prices could not prop up ethylene prices that were depressed on subdued demand this week. Scanty production margins for the downstream sector and anticipated supply glut from the Middle East have dampened demand. Unenthusiastic demand from the derivative markets has pulled down ethylene prices to US$995/MT in Asia in the week of July 27, 2009. PROPYLENE Reduced run rates at several plants has restricted propylene supply in the region, propping up prices in the week. Propylene prices rose to US$1020/MT FOB Korea in the week of July 27, 2008. Sudden shutdowns last week at crackers in France, Italy, Sweden and Norway have impacted propylene supply in Asia. Unexpected shutdown has affected supplies from Borealis’ 625,000 tpa Stenungsund Swedish cracker, Frances’ Total’s 320,000 tpa cracker at Carling-Saint-Avold. The expected supply shortage due to the cracker outages has resulted in offers at higher spot prices, despite muted demand and lack of deal conclusion. STYRENE MONOMER August shipment FOB Korea Styrene Monomer prices dipped to US$1045/MT in Asia in the week of July 27, 2009 on unenthusiastic buying sentiments. In anticipation of some correction in prices, most buyers prefer to adopt a wait and watch policy despite rising oil an naphtha prices. Miniscule deals were concluded as feedstock benzene prices weakened. EDC EDC prices steadied at last week’s US485/MT in Asia in the week of July 27, 2009 as buyers anticipate a price correction in line with falling ethylene prices. Sellers CFR offers that continue to be pegged above US$500/MT as supplies were still tight across Asian region, met with reluctance from buyers. VCM VCM prices persisted at US$720/MT in Asia in the week of July 27, 2009. As optimism persists in derivative PVC markets and EDC outlook steadies, sellers have hiked intentions to US$750/MT. The elevated offers have met with buying interest about 20 dollars lower. POLYMERS HDPE Despite restricted avails, HDPE prices have stagnated at US$1270/MT in Asia in the week of July 27, 2009 on subdued deal conclusion due to dwindling buying from China. Chinese buyers prefer to wait in the sidelines in anticipation of a price correction in line with falling ethylene values. Few CFR China deals for deep-sea cargoes were concluded below US$1250/MT, at US$1240/MT for H1-September shipment from USA and at US$1300/MT from Taiwan. After conclusion of these deals, offers for film grade from Malaysia were hiked to US$1300/MT levels and to US$1275/MT from Kuwait. LDPE LDPE prices have persisted at US$1275/MT in Asia in the week of July 27, 2009, notwithstanding a drop in feedstock ethylene values. August shipment CFR China offers from Malaysia were heard at US$1290/MT, and at US$1300/MT from South Korea. Interestingly, few CFR China deals from Europe and the Middle East were concluded below US$1250/MT. LLDPE LLDPE prices have increased to US$1265/MT in Asia in the week of July 27, 2009 despite waning ethylene prices. CFR China prices for August shipment were heard at US$1260-1270/MT. POLYPROPYLENE Despite unenthusiastic demand, polypropylene prices have steadied at US$1155/MT in line with rising propylene values. CFR China deals for yarn, injection grade from Middle East and India were concluded at US$1150/MT, and about 20 dollars higher from South Korea. After these deal conclusions, sellers from South Korea and Middle East hiked offers to levels of US$1170/MT. POLY VINYL CHLORIDE Deteriorating prices in Chinese domestic markets have pulled down PVC prices in Asia to US$910/MT in the week of July 27, 2009. After successful conclusion of August shipment deals at these levels, CFR China offers were hiked by sellers to US$930/MT. Most buying from Asia, Middle East and China was unenthusiastic. With buying intentions pegged at US$900/MT, buyers preferred to wait and watch for price corrections in line with declining prices from Chinese producers. August shipment deals have been concluded at less than US$900/MT FOB for ethylene and carbide based PVC cargoes by Chinese PVC producers. GPPS As crude oil and benzene prices rose, buyers returned to the markets, strengthening GPPS prices to US$1165/MT in Asia in the week of July 27, 2009. Sellers have hiked CFR China offers to range around US$1200/MT for GPPS and at US$1250 for HIPS. ABS Despite unenthusiastic demand, rising feedstock costs have pushed up ABS prices to US$1410/MT in Asia in the week of July 27, 2009, as producers cope with rising cost pressures. Most producers in Taiwan and South Korea have hiked offers, keeping CFR China offers at US$1435-1450/MT, while buying intentions have been dull at US$1400/MT levels.
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