Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended May 11, 2009

13-May-09
CRUDE OIL Crude oil for June delivery ended the week of May 11, 2009 at US$58 on the New York Mercantile Exchange, while Brent crude settled at US$57.60 on London's ICE Futures Europe exchange. Midweek, oil prices spiked to six month highs past US$58, as slowing job losses in the US increased investor confidence and the falling greenback improved the appeal of commodity investments. The euro has surged to a six-week high against the dollar as the gains in global equities have increased investors' risk appetite. Crude oil is shrouded with concerns of increases in global output. Exports from Iraq's Kurdistan region have been reported to begin June 1 after the state oil ministry agreed to "expedite" shipments. Venezuela, OPEC's fifth-largest producer, seized the assets of 60 oil-field service companies this week to restore operations shut over contract disputes. OPEC plans to review its output levels on May 28. NAPHTHA Naphtha prices in Asia have risen in line with rising crude oil prices and a buoyant crude oil market outlook in the week of May 11, 2009. Open-spec naphtha values for H2-June shipment settled at US$475/MT CFR Japan, with a persistent bullish trend. ETHYLENE Bouyant feedstock movement has not had a major impact on ethylene prices in Asia in the week of May 11, 2009 as FOB Korea prices hover around US$675/MT. However, robust demand from derivatives and a persistent bullish trend in upstream markets continues to keep sellers offers above the 700 dollar mark. PROPYLENE Unenthusiastic downstream polypropylene markets have tanked propylene demand and prices to US$800/MT FOB Korea in Asia in the week of May 11, 2009. PP markets were gloomy on in the week on sluggish demand from China along with the anticipated advent of cargoes from India and Middle East. STYRENE MONOMER Styrene Monomer pieces rose to US$875/MT in Asia in the week of May 11, 2009 amid renewed buying interest as oil prices rise, indicating a possible beginning of the end of the global economic downturn. FOB Korea seller's offers for June shipment stood at US$885/MT, as buyers expressed an interest to buy about ten dollars lower. Few H2 May shipment deals were concluded above US$910 CFR China, with expectations that prices could gain further ground on the back of tight supply in China. Qilu Petrochemical has shut its 200,000 tpa SM unit in Shandong, northern China, in mid-April for a month long turnaround while Maoming Petrochemicals' plans to shutter its 100,000 tpa unit in southern China early June to repair mechanical glitches. Secco Petrochemical will take its 500,000 tpa SM plant in eastern China off line in mid-May for a 75-day maintenance and debottlenecking works. Feedstock benzene prices have risen by almost fifty dollars to US$630/MT. VCM May shipment VCM prices have steadied at US$625/MT in Asia in the week of May 11, 2009 as a result of paucity of deal conclusion. Most buyers preferred to wait and watch in anticipation of gaining an insight into the outlook and trends of downstream polyvinyl chloride markets. PVC demand remains muted in the absence of sellers offers for June cargoes. A supply constraint is expected as Tosoh plans to embark on a month long maintenance shutdown at its 550,000 tpa VCM plant at Nanyo. EDC Despite supply constraints, EDC prices have stagnated at US$325/MT in Asia in the week of May 11, 2009 due to the lack of movement in derivative sector and unenthusiastic demand from China. Demand from China continues to deteriorate on weakening of prices by local producers in domestic markets by about 50-100 RMB. Enthused by supply constraints in the continent, sellers offers continue to be quoted above US$350, but lack of buying interest continues to keep buying intentions about fifty dollars lower. POLYMERS HDPE Upbeat markets have propped HDPE prices to US$1185/MT in Asia in the week of May 11, 2009. June shipment offers from Middle East and Taiwan were heard above US$1200/MT CFR China as few CFR China deals were heard concluded at US$1185/MT for film grade and above US$1250 for yarn grade. LDPE As supply constraints persist in the region, LDPE prices have risen to US$1180/MT in Asia in the week of May 11, 2009. As supplies remain stringent in the region, there was a scarcity of offers in the markets. After successful conclusion of deals at US$1180/MT CFR China, most offers spiked past the 1200 dollar mark. LLDPE LLDPE prices moved up to US$1130/MT in Asia in the week of May 11, 2009, propped by augmented sellers offers. After successful conclusion of deals at these levels, June shipment CFR China offers from Taiwan mounted by almost fifty dollars. POLYPROPYLENE Demand from China weakened, pulling down prices to US$1065/MT in Asia in the week of May 11, 2009. A pessimistic market outlook prevailed on deteriorating demand from China and the estimated influx of cargoes from the Middle East and India. Most May shipment offers have been heard above US$1110/MT. However, as demand recedes, few offers have waned below the 1100 dollar mark on concerns of a fresh fall in prices. POLYVINYL CHLORIDE Absence of offers for June shipment have kept markets lackluster, stagnating polyvinyl chloride prices in Asia at US$740/MT in the week of May 11, 2009. Adding to the bearish market outlook is weakening demand from China triggered by persistently falling prices in domestic markets. This could weaken PVC prices further despite elevated offers. GPPS In line with rising feedstock prices, GPPS prices have risen to US$970/MT in Asia in the week of May 11, 2009. Deals have been concluded as low as US$925/MT CFR China, but sellers continue to peg offers at the thousand dollar mark. These elevated offers, however, have been met with resistance from buyers who prefer to wait in the sidelines to observe market trends. Few players opine that sustaining the uptrend in feedstock prices may be difficult, as judging from the build up of inventories this week, SM consumption from downstream styrenic resins sector has remained weak. Seller's offers for HIPS hovered around US$1100/MT. ABS ABS prices have dipped to US$1350/MT in Asia in the week of May 11, 2009 on lackluster demand in the region, particularly from China. However, strengthening feedstock prices have propped up few offers by end of the week by about twenty dollars. But offers have been met with reluctance from buyers in China who anticipate a price correction in line with falling domestic prices.
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