Price trends of oil, polymer feedstock and commodity polymers in Asia for the week of November 24, 2008

26-Nov-08
CRUDE OIL Crude oil prices dropped below US$50 a markets remained bearish on worries that a recession in the U.S., Europe and Japan will severely reduce global energy consumption. Oil prices ended the week a notch above US$50 triggered by a rally in equity markets in Europe and Asia on news that China may cut interest rates, and on increased investor confidence on reports that US President-elect Barack Obama has chosen an economic team to tackle the slowdown. During the week, oil fell to US$48.25, the lowest in three and a half years. In a move to prevent a supply glut in the market amid deteriorating demand, oil companies plan to store millions of barrels of crude in the hope economics will improve. Oil traders and majors have booked supertankers capable of storing 10 mln barrels of crude, more than top exporter Saudi Arabia produces in a day. NAPHTHA Naphtha prices in Asia fell sharply to US$265/MT in line with collapsing crude oil values, in the week of November 24, 2008. Open-spec naphtha values for H1-Jan delivery witnessed a fifty dollar dip last week to US$265/MT CNF Japan. ETHYLENE Ethylene prices gained in Asia in the week of November 24, 2008. Prices moved up as end users started floating enquiries- a sign of reviving buying interest in the region. An upward correction was seen in buyer's bids to about US$375/MT CFR FE. Markets gained strength due to rising demand, increasing downstream prices and a supply dearth caused by reduction in run rates by key producers in the continent. Sellers have up revised CFR FE offers for December shipment to US$450/MT. PROPYLENE Propylene prices rose to hover around US$460/MT in Asia in the week of November 24, 2008. A price hike of 30-40 dollars was a result of strengthening downstream demand, particularly from China. Sellers, who hiked FOB Korea offers to US$495/MT, were met with reluctance from buyers requesting cargoes about fifty dollars lower. As demand in the region revives, it is unlikely that sellers will relent and down adjust offers. STYRENE MONOMER In line with falling crude and benzene prices, FOB Korea Styrene Monomer prices have dropped to US$500/MT in Asia in the week of November 24, 2008. Sellers offering materials at US$525/MT have met with reluctance from buyers who have expressed an interest about twenty dollars lower. In view of reviving end user demand and restricted supplies, it is unlikely that sellers will cave in to down revision of offers. Feedstock benzene prices have dropped by over fifty dollars to US$300/MT in line with a sharp drop in crude oil values and pessimistic market outlook. VCM As downstream PVC prices and market sentiments improve, VCM prices have also moved up to US$420/MT in Asia in the week of November 24, 2008. PVC markets have recovered in China as well as other Asian markets, perking up market outlook. Though market momentum continues to be lackluster, prices have inched up, and could see a thirty to fifty dollar hike corresponding with improving PVC prices. EDC EDC prices in Asia softened to US$105/MT in Asia in the week of November 24, 2008, mainly due to an invasion of the markets with cheap deep-sea cargoes from USA. As prices in USA dip below the hundred dollar mark, Brazilian cargoes were heard being offered at US$85/MT FOB basis. It seems likely that despite an improvement in downstream market outlook, EDC prices could see a slight deterioration. POLYMERS HDPE Demand from China has started showing signs of improvement as inventory levels with buyers dip, and also on optimistic market outlook on news of the US$586 bln economic stimulus package announced by the Chinese Government to boost its floundering economy. After successful conclusion of deals at US$775/MT CFR China, HDPE offers firmed by almost twenty dollars. Since sellers have liquidated several cargoes last week and are currently not pressed by high inventory levels, they do not seem to be willing to down adjust offers and have in fact deferred quotes. Improvement in demand will also see raising of run rates at several plants across the region. LDPE In the week of November 24, 2008, LDPE markets gained strength in Asia to US$845/MT as buyers have returned to the markets. Demand revived in China, as finding themselves with low inventory levels, many buyers resumed buying. In view of reviving demand, sellers have added about 50-60 dollars to offers, elevating them to US$890/MT CFR China, whilst CFR China buying intentions were optimistic at US$835/MT. In fact, market shows signs of revival as South Korean cargoes were sold at US$875/MT CFR SE Asia. LLDPE In the week of November 24, 2008, LLDPE markets gained strength in Asia, with offers rising to US$780/MT, as buyers have returned to the markets. Demand revived in China, as several buyers have resumed buying as they find their stockpiles diminishing. Offers have picked up by almost hundred dollars in line with rising HDPE prices in Asia. After successful conclusion of CFR SE Asia deals for November shipment at US$820/MT, LLDPE offers were up revised by 30-50 dollars. POLYPROPYLENE This week, propylene prices strengthened by almost US$150/MT in Asia, as demand in China improved. Polypropylene prices also rose in line with increasing input costs and improving demand. After successful conclusion of CFR China deals at US$725-745/MT, sellers hiked offers for yarn/injection grade. Reliance Industries Ltd. has restarted one of its polypropylene lines at Jamnagar with a capacity to produce 250,000 tons, shuttered since the end of last month, and Formosa has also hiked operating rates to 80%. PVC PVC prices picked up in Asia in the week of November 24, 2008, rising to US$595/MTas prices of domestic PVC in China bounced back amid reviving demand and December offers were hiked by major producers. In China, PVC offers for export cargoes moved up to US$565-600/MT FOB CMP. PS GPPS prices picked up as CFR China offers were heard at US$785/MT in Asia in the week of November 24, 2008. Deals for November shipment were heard successfully concluded by a Japanese uptil US$800/MT CFR China. Contrarily, HIPS prices fell to US$855/MT CFR China, corresponding with yet another fall in feedstock butadiene values. ABS Declining feedstock ACN and butadiene values have pulled down ABS prices in Asia to US$1325/MT in the week of November 24, 2008. Though most CFR China offers dropped to US$1350-1370/MT CFR China buyers were reluctant to buy at these prices, and deals were heard concluded at around US$1300/MT CFR China.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha
Complete Herbert Olbrich cushion vinyl flooring line

Complete Herbert Olbrich cushion vinyl flooring line