Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended May 4, 2009

05-May-09
CRUDE OIL Propped by enhanced consumer confidence in USA- as Americans get more confident about the economy, and indications that OPEC is complying with agreed cuts at record levels has pushed oil prices to four week highs. OPEC has reduced supply to a record high last month, implementing 84% of its agreed output cut as compared to the average compliance rate of around 60%. In USA, manufacturing shrank at the slowest pace in 7 months, considered to be an indication of the beginning of the end of the recession. Oil prices in New York rose by two dollars to settle at US$53.2 a barrel, while Brent crude settled at US$52.8 in the week of May 4, 2009. NAPHTHA Naphtha prices in Asia rose to US$465/MT in the week of May 4, 2009 in line with rising crude values. However, rising supplies from India and Europe are keeping market outlook muted in the region. This week, H2-June delivery open spec naphtha rose to US$465/MT CFR Japan. ETHYLENE Ethylene prices dipped to US$675/MT in Asia in the week of May 4, 2009 on sluggish derivative market demand. Chinese markets have been lackluster on reduced demand due to delay of annual maintenance shutdown of Shanghai SECCO's naphtha cracker, shutdown of Shanghai Petrochem's MEG plant as well as the Chinese Labour Day holiday. Market outlook continues to remain gloomy as demand is not expected to pick up in the short term since most buyers have sufficient stockpiles for the month. PROPYLENE Propylene prices plunged to US$785/MT in Asia in the week of May 4, 2009 on advent of deep sea cargoes into Asia and also on sluggish downstream demand that has kept propylene markets bearish. Formosa Petrochemical Corp plans to defer shipment of cargoes from H2-May to H1-June due to glitches in production at two of its units, trimming down capacity by 625,000 tpa. STYRENE MONOMER Styrene Monomer prices dropped by fifty dollars in Asia to US$835/MT FOB Korea in the week May 4, 2009, mainly due to weak demand, particularly from China. Very few deals were heard concluded- mid week saw prices dip even further but they recovered eventually, rising in line with rising crude oil values. Feedstock benzene prices tanked to US$570/MT FOB Korea, but rose marginally on recovering oil and naphtha markets. VCM VCM prices in Asia firmed at US$620/MT CFR China in the week of May 4, 2009 at last week's prices that had risen in anticipation of a supply shortfall from producers in the region. Deals for May shipment were concluded by a Japanese producer at these levels, after quoting about twenty dollars higher. EDC EDC prices steadied at US$325/MT in Asia in the week of May 4, 2009 on lackluster demand in the continent, particularly from China. Falling domestic prices by over 100 RMB, restrained demand from China, and despite restricted supplies in the region, sellers offers of US$350/MT was met with buying intentions pegged almost fifty dollars lower. POLYMERS HDPE Trade slowed down in the week ahead of the Labour Day holidays starting on 1 May, stagnating prices at US$1165/MT in Asia in the week of May 4, 2009. Few CFR China offers for June shipment were heard at these levels for injection as well as film grade from sellers from Taiwan and Thailand. CFR China offers for blow molding grades rose past US$1200/MT while few deals for yarn grade were concluded at US$1225/MT levels. LDPE Restricted avails in the region have kept LDPE prices at US$1155/MT in Asia in the week of May 4, 2009. May shipment CFR China cargoes were traded below US$1150/MT from the Middle East, offers from Singapore were heard around the US$1150/MT mark, and from South Korea around US$1165/MT. Few CFR South East Asia deals were concluded above US$1170/MT. LLDPE LLDPE prices have dropped to US$1115/MT in Asia in the week of May 4, 2009 on reduced seller's offers. Few CFR China deals were concluded below the US$1100/MT mark for cargoes from Japan and Middle East even as June shipment material from Taiwan was offered at last week's levels. POLYPROPYLENE CFR China polypropylene prices have stagnated at US$1095/MT in the week of May 4, 2009, in the absence of deal conclusion, as seller's offers for May shipment ranged from US$1100-1155/MT CFR China. CFR China offers for yarn and injection grade from South Korea hovered around US$1110-US$1150/MT, and at similar levels from Malaysia and Taiwan. Homopolymer was being offered at US$1125/MT while block copolymers were quoted about 50 dollars higher. POLY VINYL CHLORIDE PVC prices rose to US$745/MT in Asia in the week of May 4, 2009. Deals were closed about 20 dollars higher than last week by majors from Taiwan, Japan, Thailand and South Korea. Interestingly, CFR deals in Asian countries besides China were concluded about 30-45 dollars higher. As price realization from Asian countries has been healthier than from China, non-China bound exports have increased. GPPS An almost hundred dollar price dip, tanked CFR China GPPS prices to US$955/MT and HIPS prices below US$1100/MT in Asia in the week of May 4, 2009. Prices fell in line with tumbling feedstock values and deteriorating demand from China, as most buyers preferred to wait and watch for further price correction. Offers from Taiwan and Thailand fro GPPS dropped to US$950-970/MT. ABS ABS prices have dropped by over 100 dollars to US$1345/MT in Asia in the week of May 4, 2009 as feedstock styrene prices continue to deteriorate and demand in the region, particularly from China, becomes unenthusiastic.
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