Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended June 2, 2008

CRUDE OIL Crude oil futures have fallen by five dollars to lows of US$127 per barrel in New York for the week of June 2, 2008. From all time highs of US$135 per barrel on May 22, crude oil prices have dipped sharply on a report that fuel consumption in USA has fallen from a year ago levels due to higher oil prices. Another factor that affected prices was strengthening of the US dollar that now reduces oil's appeal as a hedge. The US dollar peaked to a three month high vis a vis the yen as US stocks gained, brightening the economic outlook in USA. NAPHTHA Naphtha prices in Asia have dipped to US$1070/MT levels in Asia in the week of June 2, 2008 in line with a sharp drop in crude oil prices. ETHYLENE Awaiting action from both buyers and sellers, ethylene prices in Asia stagnated at US$1420 in the week of June 2, 2008. Buyers preferred to wait and watch on listless downstream demand, and sellers were passive because of their unwillingness to sell at lower bids. PROPYLENE Propylene prices continued on a northward march as they firmed up to US$1550/MT in Asia in the week of June 2, 2008. This price rise can be attributed to restricted supplies in the region of Northeast Asia, coupled with buoyant downstream polypropylene and 2-EH prices. Sellers target price of about US$1650/MT CFR Asia, met with buyer's resistance almost fifty dollars lower. Most buyers preferred to wait and watch as they anticipate an improvement in the supply situation for June. A three-week long turnaround at a leading PP producer has affected demand from mainland China. VCM Bolstered by robust calcium carbide prices in China as well as mounting downstream PVC prices for June shipment, VCM prices strengthened to US$975/MT in Asia in the week of June 2, 2008. Bids from Chinese buyers were lower that selling intentions from Japan for June that persisted at highs of US$1000/MT CFR China. June offers from Taiwan, quoted at US$950/MT FOB Taiwan, were unconcluded due to lack of vessel coupled with higher freight cost. EDC Higher naphtha prices continued to take a toll on EDC prices in Asia in the week of June 2, 2008. EDC prices rose to US$465/MT in Asia in the week of June 2, 2008. In fact, sellers targeting offers at US$500/MT levels, are being met with resistance from buyers. At current interest levels, market prices are being gauged at US$470/MT CFR China. In plant news, a power failure at Indonesia's PT Sulfindo Adiusaha has forced an unplanned, indefinite shutdown of a 290,000 tpa EDC and 110,000 tpa VCM plant at Merak. SM Styrene Monomer prices in Asia continue to climb, rising to US$1640/MT in the week of June 2, 2008. Many deals for the later part of June were concluded at levels of US$1675/MT CFR China. Meanwhile feedstock benzene prices dropped by about twenty dollars, in line with falling crude oil values. POLYMERS HDPE High energy and feedstock prices continue to exert pressures on HDPE prices in Asia. HDPE prices increased to US$1675/MT in Asia in the week of June 2, 2008. Offers from Malaysia and South Korea rose to above US$1700/MT CFR China levels. LDPE Restricted availabilities of LDPE accompanied by upbeat EVA prices have pushed LDPE prices to US$1830/MT in Asia in the week of June 2, 2008. Suppliers from Qatar as well as Malaysia have increased offers by another twenty dollars CFR China, that have been accepted by few buyers from China. However, general buying intentions have remained as low as US$1800/MT CFR China. Offers for June from South Korean producers are being intended to get hiked to US$1850/MT CFR China. LLDPE LLDPE prices stayed firm at US$1680/MT in Asia in the week of June 2, 2008. Offers are being quoted by sellers from Saudi Arabia as well as South Korea at US$1690-1700/MT levels. PP Polypropylene prices in Asia strengthened to US$1750/MT on the back of restricted supply and strong feedstock propylene values in the week of June 2, 2008. PVC Markets for PVC stabilized at US$1200/MT in Asia in the week of June 2, 2008. US$1200/MT CFR China is the level at which most key sellers from Taiwan, South Korea and Japan have concluded deals for June shipment. Rising cost of input VCM and calcium carbide have pushed offers from Chinese makers upto US$1180/MT for June shipment. GPPS Sudden rise in values of feedstock Styrene Monomer by over hundred dollars has pushed GPPS price up by fifty dollars to US$1615/MT in Asia in the week of June 2, 2008. Though GPPS price rose to all time highs, margins fell to record low levels. ABS Prices of ABS spiked past the 2000 mark to US$2030/MT in Asia in the week of June 2, 2008. This hike of over sixty dollars was in line with the sky rocketing prices of ACN, butadiene and particularly SM.