For the second consecutive week, crude oil prices have finished in the red, settling below US$70 in the week of June 29, 2009. Light sweet crude oil for August delivery settled at US$69.1, down by over one dollar for the week amid rough trading. The Energy Information Administration data indicated a 3.8 mln barrel dip in crude oil inventories in the week ended June 19, while gasoline inventories increased by 3.9 million barrels. Prices spiked up on Thursday by over US$1.5 on economic optimism and supply concerns as the Movement for the Emancipation of the Niger Delta claimed it attacked a Shell pipeline. The US economic recovery seems to be getting healthier as per reports by the Commerce Department that personal income jumped 1.4% in May following an 0.7% increase in April. Personal spending rose 0.3% in May after coming in unchanged in the previous month.
As the dip in oil prices continues for the second week, sentiments in naphtha markets turned gloomy in the week of June 29, 2009. Midweek saw prices dip below the 600 dollar mark, but they later recovered. Open-spec prices for H1-August delivery dipped to US$615/MT CFR Japan.
An unplanned outage at South Korean YNCC's naphtha cracker has caused supply constraints in the region. Prices spiked to US$885/MT in Asia in the week of June 29, 2009, touching eight month highs despite weaker upstream markets. Offers have been further spiked as supply is expected to be restricted.
Propylene prices have also strengthened to US$895/MT in Asia in the week of June 29, 2009 due to supply constraints caused by an unplanned shutdown at YNCC's No.2 naphtha cracker. Select offers that have breached the 1000 dollar mark have met with resistance to such high prices from the buyers.
Styrene Monomer prices have increased to US$1045/MT in Asia in the week of June 29, 2009 on improved buying intentions. Sellers have hiked offers after deals for H2-July shipment were concluded at these levels. Feedstock benzene prices stagnated at last weeks levels in line with dipping oil values.
VCM prices increased to US$710/MT as July shipment offers increased to US$720/MT in Asia in the week of June 29, 2009. The market has seen initial resistance from most buyers from China, but deals for the month are expected to be concluded at these levels.
EDC prices have seen a marginal movement to US$420/MT in Asia in the week of June 29, 2009 on supply constraints. Run rates at many plants across the continent, that had been reduced, have not been raised due to restricted chlorine supplies. Sellers, who have hiked offers to US$450/MT levels, have met with buying intentions about 25 dollars lower. It is unlikely that sellers will reduce offers on a persistent bullish trend in upstream costs.
July shipment HDPE prices strengthened to US$1260/MT in Asia in the week of June 29, 2009. Propped by stable demand, offers for film grade were increased to US$1270/MT CFR China. CFR deals from South Korea were concluded at US$1265/MT, about ten dollars higher from Thailand and at about US$1260/MT from Malaysia.
Persistently healthy demand has propped up LDPE prices to US$1225/MT in Asia in the week of June 29, 2009. After successful conclusion of deals at these levels, offers for July shipment from Malaysia and South Korea have been spiked to US$1255/MT CFR China.
July shipment LLDPE prices have inched up to US$1215/MT in Asia this week. Continuous robust demand in the region has supported a hike in LLDPE prices in the week of June 29, 2009, despite bearish upstream markets.
Polypropylene prices in Asia have moved up to US$1110/MT CFR China in the week of June 29, 2009 in line with elevated offers. Yarn/injection grade from Malaysian as well as Asian producers is being offered for July at US$1165/MT and US$1150/MT CFR China, at about US$1115/MT from India, while deep seas cargoes are being offered at US$1115-1120/MT CFR China.
Under the dual influence of healthy demand on one hand and VCM supply concerns on the other, polyvinyl chloride prices have moved up US$855/MT in Asia in the week of June 29, 2009. After successful conclusion of deals at these levels, CFR China offers that were hiked to US$875/MT have resulted in July shipment deal conclusion about ten dollars lower. As supply from producers in Asia and USA continues to be restricted, PVC offers are expected to be bullish.
GPPS prices have had a marginal dip to US$1100/MT in Asia in the week of June 29, 2009. Higher Styrene Monomer prices have kept offers for GPPS at these levels, while buyers anticipate a price dip in line with declining crude oil prices. Buyers prefer to wait in the sideline for a price correction as sellers from South Korea and Taiwan have offered material at US$1125-1145/MT. Deals for HIPS were concluded at US$1175-1200/MT CFR China.
Unenthusiastic demand from China has pulled down ABS prices to US$1385/MT in Asia in the week of June 29, 2009. Despite an attempt by sellers to hike offers past US$1400/MT, buying intentions remain dull at US$1380/MT.