Polymer and feedstock price trends as on 17 July 2006

09-Nov-06

The second week of July 2006 witnessed a sharp increase of oil from US$74/barrel to almost US$78 by the end of the week. It appears that supply from Iran could be adversely be affected due to its plans for enriching uranium. Mounting violence between Israel and Lebanon has also added to the Middle East crisis. It is likely that oil would continue to hover around at higher levels. This will exert price pressure on petrochemicals. Asian price of naphtha showed an increase, reaching a level of US$ 680/MT. Ethylene saw larger consignments from Middle East last week. Its price is bound to show a rise in the coming week due to higher demand of ethylene products (except PVC, and to some extent PS) Propylene reached at a level of US$1200/MT from the level of US$1050/ MT last month. Propylene based products particularly PP have shown good demand, hence Propylene is likely to remain at higher price band in the coming weeks. All grades of PE saw good demand, and have hovered at US$1330-1350/MT. Larger shipments were seen from Middle East producers to Asian region where PE have a strong demand. PP price rose due to supply constraint and good demand in the Asian market. PVC price remains flatter due to sluggish demand. Japan, the major supplier of VCM to China (the largest consumer of PVC in Asia) could not sell any VCM to China in the last week. EDC & VCM prices remained almost stagnant like that of PVC. While styrene price showed a sharp rise to $1250/MT levels from $1200/MT, PS & ABS remained stable.