Crude oil futures slumped to US$71.5 for September delivery in the week of 13th August 2007 on the New York Mercantile Exchange. This dip is in continuity to the decline prompted by news of a US economy slowdown.
Naphtha declined in line with falling crude oil prices.
Persistent stringent supplies continue to prompt higher ethylene and propylene prices in Asia. Styrene monomer (SM) prices dropped in line with bearish sentiments that prevailed in the benzene market.
VCM and EDC gained in line with rising upstream costs and robust downstream markets.
All the PE polymers and PP saw robust growth on account of tight feedstock supplies and robust market conditions.
ABS maintained at last weeks' price, while GPPS dipped in line with plummeting SM prices.
Crude oil slumped to its lowest levels in New York in over a month in the week of August 13, 2007. Factors that were responsible for the decline were reports suggesting a US sluggish economy. The US Labor Department reported the number of people signing up for jobless benefits grew last week, while many retailers reported disappointing July sales. French bank BNP Paribas froze three securities funds, saying it no longer knows what they are worth because of problems in the U.S. subprime market. Growing concerns about a slowdown in US economy made prices dip to US$71.4/barrel.
Plummeting oil prices led to a corresponding dip in naphtha prices in Asia in the week of August 13, 2007. Naphtha prices dipped by almost thirtly dollars to levels just above US$650/MT.
Persistent stringent supplies continue to prompt higher ethylene prices in Asia. Upbeat ethylene prices were also sustained by robust downstream PE markets. Ethylene price rose to US$1245/MT in Asia in the week of August 13, 2007. Sellers did attempt to hike offers to levels of US$1300/MT, but could meet with little success owing to restricted supply. A wide gap of fifty dollars persists between selling intentions and buyers' bids, restricting the number of deals transacted.
Insufficient supply has led propylene prices to rise by almost thirty dollars to US$1125/MT in Asia in the week of August 13, 2007. Firm propylene market outlook in Asia was governed by a supply shortage- now persisting for the past 6-7 weeks.
STYRENE MONOMER (SM)
SM prices in Asia dropped to US$1390/MT in the week of August 13, 2007. This fall was corresponding to bearish sentiments that prevailed in the benzene market. Benzene prices in Asia plunged by almost thirty five dollars in the week of August 13, 2007 in line with falling crude oil and naphtha prices.
Robust ethylene prices along with tight availability across Asia have affected a hike in VCM prices. VCM prices rose to US$830/MT in Asia in the week of August 13, 2007. An unplanned shutdown as a 1.21 mln tpa VCM plant in Nanyo earlier this month has led to a supply shortage, indicating that VCM prices could go up further this month.
Persistently rising prices of upstream ethylene have led to a rise in EDC offers. EDC prices rose to US$460/MT in Asia in the week of August 13, 2007. Though suppliers quoted offers higher than US$470/MT, prices remained range bound because of lower buying intentions from vinyl producers, particularly in China.
HDPE prices rose to US$1415/MT levels in Asia in the week of August 13, 2007. Enduring bullish demand from buyers in the global market has brought about persistently strong HDPE prices in Asia. A surge in upstream ethylene prices has also supported PE prices. Excellent export demand, particularly from Europe, has been the driving factor to provide producers with pricing power.
Bullish market sentiments continue to support a hike in LDPE prices in Asia this week. This coupled with very tight supply across the Asian region has triggered a price rise in LDPE to US$1540/MT in Asia in the week of August 13, 2007.
LLDPE prices, supported by bullish market sentiments, continue to rise in Asia. Prices rose to US$1410/MT in Asia in the week of August 13, 2007. Excellent export demand has influenced a rice hike to those regions.
A price hike for PP in Asia this week can be attributed to tight supplies and rising propylene prices. Supplier offers for PP in Asia in the week of August 13, 2007 were hiked to above US$1400/MT levels. PP prices are estimated to remain higher in the next few weeks as few producers have defered August offers on account of diminishing stockpiles.
Inactivity prevailed in Asian PVC markets, as offers were awaited from major suppliers. PVC prices stagnated at US$1000/MT in Asia in the week of August 13, 2007. However, this lull in PVC markets is projected to pass as prices will rise by at least twenty dollars in line with mounting production costs and robust market demand, coupled with higher feedstock costs and higher PVC prices in the other regions.
GPPS markets remained a laggard as prices dipped marginally to US$1475/MT in Asia in the week of August 13, 2007. The week witnessed restrained demand in Asia, particularly from China as feedstock SM prices dipped in line with a fall in crude oil prices.
Dipping feedstock SM prices in line falling crude oil prices have led to subdued buying interest in Asia in the week of August 13, 2007. ABS prices continued to be maintained at last weeks' level of US$1690/MT.