Contrary to oil prices dips, Asian monomers firm

27-Aug-10

Spot monomer prices in Asia have moved up this week despite the persistent declines in crude oil prices tanking crude oil to US$73/barrel this week, as per Chemorbis. This discrepancy in direction of upstream markets has generated confusion among polymer buyers, as most buyers elect to remain on the sidelines for the present in hopes that a clearer picture of the market direction will emerge over the next few days. Spot ethylene prices on a CFR Asia basis have risen US$50-80/ton this week while crude oil futures shed $2.90/barrel since last week. Lower crude oil prices also proved incapable of preventing rising prices in the spot propylene and styrene markets, as propylene prices are up US$35/ton on the week on a FOB Korea basis while spot styrene prices have gained US$15/ton week on week on the same terms. When compared with the beginning of the month, the divergence between spot monomer prices and crude oil futures is even more striking. Crude oil prices have posted steep declines totaling US$8.82/barrel since the start of this month. In contrast, spot monomer prices have recorded large cumulative increases since the start of the month, with ethylene prices gaining US$130-140/ton, propylene prices rising $85/ton and styrene prices moving up US$38/ton over the same time period