Price trend of oil, feedstock and commodity polymers for week of Sep 17, 2006 in Asia

Oil continued its slide downwards due to political stability achieved globally. This has brought softening of ethylene & propylene prices. However stronger demand of downstream products has kept the price of EDC & VCM higher. Styrene monomer rose due to an increase in price of benzene and firmer demand of PS. PE & PP have become softer in the week of September 17,2006. PS & ABS have shown weaker price sentiment due to weaker demand. They are not likely to be revived immediately. In fact they may become weaker in October 2006. PVC is the only commodity polymer that gained mainly due to stronger demand due to revival of building & construction industry. PVC is likely to become stronger in October 2006. OIL Oil has continued to remain soft in the week of September 17 2006. In fact Dubai price of oil has fallen below US$ 60/barrel. It is almost at US$59/barrel. All the geo political factors and turbulence that existed in the last few months, seems to have passed and threats of pre-summer fears that hurricanes would disrupt Gulf of Mexico oil production have also waned. Some semblance of stability is established. Asian price of oil continues to hover around US$63/barrel. It is expected that stability will continue. It is quite possible that oil could touch around US$60/barrel in the next few weeks. NAPHTHA Naphtha also has fallen to about US$550/MT in the week of September 17, 2006. Lowering of oil price is responsible for lower price of naphtha. Further more next few months will witness lower price. It would not be surprising if the price further drops to the level of US$520/MT. ETHYLENE Ethylene price declined further and reached US$1370/MT & thus dropping by US$20/MT in one week. The weaker demand & softening of oil would bring down the price below US$1350/MT in the next few weeks. The price could remain softer in the next few weeks mainly due to weaker sentiments in oil price & not too strong demand of ethylene derivatives PROPYLENE Propylene dropped more sharply compared to ethylene primarily because of weaker sentiments in PP, the largest outlet of propylene. The price fell to US$1260/MT from US$1300-1310/MT in the week of September 17, 2006 Further decline could be expected in the coming few weeks due to weaker oil price. EDC EDC gained smartly because of increased demand of PVC from China. EDC price reached US$440/MT from US$420/MT in the week of September 17, 2006. An increased activity of building & construction could witness further gain for EDC in October 2006. VCM The price of VCM gained marginally by US$10/MT from US$730/MT that prevailed in the week of September 10, 2006. Further hardening of price is expected due to revival of demand in PVC due to building activities. It is anticipated that price could reach at US$800-820/MT by October 2006 if not earlier. STYRENE Higher price of benzene coupled with revival of demand in PS saw an increase in price of styrene from US$1190/MT to US$1230/MT. Further rise in price of styrene in October 2006 is seen. It is expected to gain to US$1270/MT by October 2006. LDPE After strong price of LDPE for last several months some cooling is seen resulting in price decline to US$1400/MT in the week of September 17, 2006 from US$1440/MT in the previous week. Asian demand & more of Chinese demand seems to be the main reason. Chinese producers are not willing to dole out higher price. Further decline is inevitable. It is expected that price could drop further to US$1350-1370/MT in October 2006. LLDPE LLDPE price dropped even more sharper compared to LDPE & reached US$1350/MT. The traders believe that LLDPE would remain at the same price in October 2007. The weaker sentiments in the demand are not helping price to get firmer. HDPE HDPE like LDPE & LLDPE remained soft & the price touched as low as US$1390-1400/MT. Very few transactions are seen for October. It is quite possible that price could go down further to US$1350/MT in October 2006. PP The bearish demand from China & other regions of Asia saw a sharp drop of price of PP from US$1420/MT to US$1370/MT.It is anticipated that price would fall further down & reach about US$1350/MT by October 2006. In fact, European price has already fallen below US$1300/MT. PVC PVC gained smartly in the week of September 17,2006 & attained the price of US$990/MT from US$950/MT. However, the processors are resisting the price rise but the demand is getting firmer due to revival of building activity. It is envisaged that price could remain range bound around US$1000/MT in October 2006. PS The weaker demand & lowering of feedstocks have seen the price lowering to US$1300/MT in the week of September 17,2006. Further weakening of price is seen due to weaker demand in PS. Most likely the price of PS could weaken further down to US$1270/MT in the end of September 2006. Even further softening could take place in October 2006. ABS Oil price decline coupled with decline of both ethylene & benzene along with weaker sentiments in the market of ABS saw further decline from US$1620-1630/MT to US$1590/MT. October 2006 may witness the price dropping further down to US$1550/MT.