Polymer prices in Asia sustained on high feedstock costs

23-Nov-09

As capacities in the Middle East and China came onstream in the past few weeks, an anticipated supply glut was estimated to lead to a dip in polymer prices in Asia. However, polymer prices have moved north against market expectations, mainly due to high feedstock prices that currently stand at several month highs. In the month of November, naphtha prices have gained over US$50/MT, rising past US$715/MT CFR Japan, to reach 2009-highs this week. Possible causes could be firming naphtha prices in Europe and support from ethylene prices in Asia that have increased by over US$115/MT in the month. Spot ethylene prices are at their highest level since mid-July, and are estimated to be rising on robust demand from China as well as limited avails in the region on reduced supplies from the Middle East. Spot propylene prices have risen by over US$55/MT this month, mainly due to low levels of inventory in Asia. Styrene prices have increased by over US$110/MT this month mainly due to rising feedstock benzene costs and supply glitches triggered by plant outages in South Korea.