Crude oil futures declined to US$75.48 for September delivery in the week of 6th August 2007 on the New York Mercantile Exchange. This dip is in continuity to the decline prompted by news of a cooling U.S. job market, indicating an economy slowdown.
Naphtha declined in line with falling crude oil prices.
Olefin (both ethylene & propylene) feedstocks escalated on account of very tight supply from producers. Styrene monomer (SM) rose on account of robust demand compared to the last week.
VCM and EDC remained lackluster, despite rising upstream and downstream markets.
All the PE polymers and PVC saw robust growth on account of tight feedstock supplies and robust market conditions.
GPPS remained lackluster and maintained at last weeks' price. ABS prices rose in line with a rise in upstream ACN and butadiene prices.
Price of all feedstock and commodity polymers could go up in August 2007 due to good market conditions.
Crude oil futures declined to US$75.48 for September delivery in the week of 6th August 2007 on the New York Mercantile Exchange. This dip is in continuity to the decline prompted by news of a cooling U.S. job market. The contract declined after the U.S. Labor Department reported the U.S. unemployment rate rose to 4.6% in July, a six-month high. These figures suggest that the U.S. economy might be slowing, which could lower demand for oil and gasoline.
Naphtha prices slipped marginally in line with a drop in crude oil prices in the week of 6th August 2007. Open-spec naphtha prices for dipped marginally to just below US$680/MT levels.
Asian ethylene prices rose by almost fifty dollars to US$1225/MT in the week of 6th August 2007. This escalation in price was on account of very tight supply from producers. A small number of firm offers were seen due to a supply crunch. Asian buyers failed in their attempt to obtain cargoes at US$1,210-1215/MT for end of the month, as suppliers have expressed selling intention almost hundred dollars higher in line with rising downstream polyethylene prices along with a supply shortage. Ethylene prices are expected to continue at this level, spurred by limited ethylene exports from South Korea on account of plant turnarounds next month.
Propylene markets faced a supply crunch from producers in the week of 6th August 2007, leading to stronger prices. Tight supply has caused prices to rise to the levels of US$1095-1100/MT.
Egged on by strong demand from buyers, the week of 6th August 2007 has seen a continuous spurt in SM prices in Asia. Prices have risen to the level of US$1400-1410/MT. Sellers have made a bid to offer SM above these levels, but have met with lower buying intentions, maintaining prices in the range of US1400-1410/MT.
Despite rising prices in upstream ethylene markets, along with stringent supplies in Asia, EDC prices saw minimum movement in the week of 6th August 2007. Prices, currently pegged at US$430/MT, are expected to move up to US$455-460/MT in the month of August, as sellers intend to hike prices corresponding with healthy upstream ethylene prices.
VCM prices saw no movement in the week of 6th August 2007 as prices continued at US$820/MT. Producers made an unsuccessful attempt to raise prices by twenty dollars. A wide gap of forty dollars was seen between offers from Japanese suppliers and buying interest from the Asian markets, particularly China. However, in the face of stable global PVC prices, sellers do not seem inclined to accept low bids.
Market for HDPE in Asia was very robust in the week of 6th August 2007, leading to successful closing of deals at around US$1,400/MT. Despite subdued demand from China, Asian PE prices rose, mainly due to strong buying interest from non-Asian countries. Prices are expected to continue at these levels for the month of August 2007.
The week of 6th August 2007 saw a steep hike in LDPE prices by almost thirty dollars. LDPE prices rose to US$1520/MT on account of limited supplies combined with strong upstream ethylene values.
LLDPE prices rose marginally to US$1400/MT in the week of 6th August 2007, despite strong upstream ethylene values. Weak market sentiments from China, leading to low demand, kept LLDPE prices range bound in the week.
PP prices in Asia rose to US$1395/MT in the week of 6th August 2007. Prices rose as PP market sentiments in Asia continued to firm up as supplies tightened amid rising cost of feedstock propylene. Prices for August 2007 are expected to remain at this level or possibly rise.
PVC prices remained relatively subdued in the week of 6th August 2007, rising marginally to US$1000/MT, as supplier offers for the month were still in the pipeline. Upbeat sentiments globally, coupled with tight supplies have lead to bullish PVC prices. Escalating global PVC prices and rising production costs are expected to result in a twenty dollar rise in September offers.
GPPS markets remained laggard and maintained at last weeks' price of US$1480/MT in the week of 6th August 2007. Supplier offers remained range bound, but few transactions were done as buyers preferred to adopt a "wait and watch" policy.
An unprecedented rise in upstream ACN prices and robust butadiene prices has caused ABS prices to rise. ABS prices rose to US$1690/MT in the week of 6th August 2007. Reluctance on part of buyers, particularly in China led to fewer transactions at the high prices quoted by suppliers. A price gap of almost thirty-forty dollars continues between supplier offers and buying interest.