Price trends of oil, polymer feedstock and commodity polymers in Asia for the week of 14 July, 2008

16-Jul-08
CRUDE OIL Oil prices ended the week of July 14, 2008 at US$145 per barrel, the same level as last week. However, the week saw plenty of movement in oil prices. More than 6% drop was witnessed at the start of the week on July 7 and 8, as several major economies showed signs of slowing down. However, prices jumped past US$147 a barrel in New York as the hostilities between Iran and the Western countries grew sharply, and investors returned to the energy markets as the probability of attacks on Nigerian oil facilities grew stronger. NAPHTHA In line with the drop in oil prices witnessed at the start of the week, naphtha prices in Asia dipped by almost thirty dollars to US$1215/MT in Asia in the week of July 14, 2008. Open-spec naphtha values for H2-August delivery closed at US$1215/MT CNF Japan. ETHYLENE Demand from downstream users and buyers from the South East has kept ethylene prices well supported in Asia in the week of July 14, 2008. Ethylene prices climbed up to US$1660/MT in the week in Asia, and are expected to rise further in the weeks of August. Conclusion of a deal for first week August shipment at US$1670/MT has prompted sellers to up adjust selling intention by thirty dollars. In fact, after conclusion of a deal at US$1700/MT CFR on robust demand from the South East, a rise of twenty five dollars was seen in the bids. PROPYLENE Propylene prices dipped marginally to US$1790/MT in Asia in the week of July 14, 2008. As key producers in the region have cut run rates, leading to reduced supply, buying bids saw a drop. Sellers continue to maintain their offers at US$1800/MT FOB Korea, but buyers do not seem to be keen on buying at these levels, with bids hovering at even lower levels of US$1770/MT FOB. VCM As the gap between sellers offers and buyers intentions continues to widen, VCM prices slid to US$990/MT in Asia in the week of July 14, 2008. Saddled with sufficient stock piles and weakening downstream demand, buyers from Asia, particularly China, continue to bid at lows of US$970/MT. However, few producers still aim to sell cargoes at US$1100/mt CFR China, leaving negotiations for July unconcluded. EDC Asian EDC market has firmed up in line with rising feedstock cost of ethylene, as prices move up by ten dollars to US$540/MT in the week of July 14, 2008. Sellers attributed the increase to higher crude and naphtha prices as well as gains in ethylene feedstock. Despite higher offers by the sellers, improved buying sentiments in the region supported by strengthening downstream PVC markets have kept the market outlook for EDC positive. STYRENE MONOMER Sturdy demand has kept Styrene Monomer prices firm in Asia in the week of July 14, 2008 at US$1665/MT. In fact, deals for August and September shipment were concluded in the range of US$1655-1660/MT FOB Korea. Feedstock benzene prices steadied at last weeks levels around US$1335/MT FOB Korea for August shipment. During the week, benzene demand from Asia remained dull, but prices recoiled due to buoyancy experienced in the Asian markets on growing demand from the markets in Europe. POLYMERS HDPE Limp demand from Chinese buyers saw HDPE markets stagnate at US$1835/MT in Asia in the week of July 14, 2008. Buyers from China, who have access to film grade material at dipping local prices, kept bids at US$1845/MT levels. However, sellers quote for CFR China continue to range from lows of US$1850 uptil US$1880/MT. Reluctance to relent to these high prices on part of the Chinese, who form a chunk of the Asian demand, has coaxed Asian producers to move increased cargoes towards the high demand region of Latin America. Latin America is currently witnessing robust prices at US$1900/MT levels as the region continues to suffer from supply restrictions because demand was very strong on a supply glitch from the American arm of Formosa. LDPE LDPE prices rose to US$1965/MT in Asia in the week of July 14, 2008 on dual forces. The market continues to witness strong feedstock ethylene rates, coupled with buyers demand that continues to be firm. With conclusion of deals at US$1970/MT levels, sellers have steadied CFR Asia offers up to thirty dollars higher. LLDPE Just like LDPE, markets for LLDPE continued to rise to US$1855/MT on the back of rising feedstock values and steady demand from buyers. After successful conclusion of July shipment deals at US$1860/MT CFR Asia by a South Korean supplier, offers were up adjusted by twenty dollars. A producer based in Singapore concurred with the prices of US$1880/MT CFR CMP, while selling intention from Taiwanese producer rose even higher. PP Despite sound demand from South East Asia, polypropylene prices have stagnated at US$2040/MT in Asia in the week July 14, 2008. PP prices have not witnessed a buoyancy this week, because of dull market sentiments from China and dipping feedstock propylene prices. After conclusion of deals upto US$2080/MT, offers were modified lower at US$2060/MT CFR China. However key producers from India, Taiwan and South Korea kept August offers marginally above US$2100/MT, but still await deals at these levels. PVC Awaiting August shipment offers from key producers, the Asian markets for Polyvinyl chloride stagnated at last weeks' US$1250/MT in the week July 14, 2008. Propped by robust ethylene and naphtha values, most suppliers intend to raise prices. In fact, a Japanese supplier who concluded July shipment deals at US$1260/MT CFR CMP, is heard to have quote August offers almost forty dollars higher. As demand continues to be dull in the face of buoyant feedstock markets, buyers have indicated no rush toward building up inventories. GPPS GPPS prices saw limited movement, steadying prices at US$1765/MT in the week of July 14, 2008. Keen towards a healthy price realization in line with higher feedstock values, GPPS sellers in Asia have propped up offers to US$1800/MT this week. But, market sentiments were sustained atleast forty dollars lower, widening the gap between the buyers and sellers expectations. Few deals were concluded as both buyers are sellers seem unwilling to relent. ABS Pressed by higher input costs, ABS prices moved up to US$2210/MT in Asia in the week of July 14, 2008, notwithstanding demand in Asia that failed to revive. As typical offers by sellers got hiked to US$2250/MT CFR China, few deals were heard concluded at US$2200/MT. Producers from South Korea and Taiwan who have floated speculative offers upto US$2280/MT, await action from the buyers.
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