Price trends for oil, feedstocks and commodity polymers for the week of 26th December, 2006

SUMMARY Oil price reduced marginally due to economic slowdown along with milder weather conditions in USA. Oil is expected to remain stagnant around US$60-62/barrel in January 2007. Naphtha and propylene remained stable in the week of 26th December, 2006. Ethylene, EDC, VCM prices rose but styrene prices saw a reduction. LDPE, due to tighter availability, rose sharply. LLDPE, HDPE and PVC rose marginally while PP and GPPS stagnated. ABS declined due to quiet market conditions as well as a drop in the price of feedstocks. January 2007 would see price stability or stagnancy in most of the products. OIL Oil price reduced marginally to US$62.5/barrel mainly due to warmer weather in USA and slow down of US economy. Oil is expected to remain range bound between US$60-62/barrel in the coming few weeks. NAPHTHA Naphtha remained stable around US$574-575/MT. No major changes have occurred in the market conditions due to quiet markets of naphtha derivatives. Naphtha is expected to remain range-bound at US$570-575/MT in January 2007. POLYMER FEEDSTOCKS ETHYLENE Tight availability resulted in sharp rise in the price of ethylene to US$1200/MT in the week of 26th, December 2006. However, the future price for January 2007 supplies are being quoted at US$1140-1150/MT. A tighter supply situation would decide the price of ethylene in January 2007. PROPYLENE Propylene continues to remain stable at US$1140/MT for the third week in succession in the 26th December, 2006 week. Most likely, the price would continue to remain stagnant at this level in January 2007. EDC Tighter availability and turnaround of few Asian plants did not increase the price mainly due to quieter market conditions. This resulted in stagnancy in the price of EDC at US$425/MT. It is quite possible that the price could go up in the later part of January mainly due to scarce supply situations. January 2007 price indications are around US$430-450/MT. VCM VCM remained firm mainly on account of tighter supply situation. The price of VCM was US$645/MT in the week of 26th December 2006 compared to US$640/MT in the week of December 18, 2006. Several plants in Asia are going for maintenance shut down in January 2007. January 2007 price indications are around US$670/MT. STYRENE A drop in the price of benzene resulted in reduction in the price of styrene monomer to US$1305/MT in the week of 26th December 2006. Not much trading was done as the suppliers were not wiling to do the business because of lower price and therefore lower margins. It is quite likely that styrene would remain range bound around US$1300-1320/MT in January 2007. POLYMERS LDPE LDPE, due to tighter availability and stronger market increased to US$1325-1330/MT in the 26th December, 2006. It is quite evident that the price on support of good demand, higher price of oil and tighter supplies, would increase further. It is expected that the price could go up to US$1330-1340/MT. LLDPE The demand seems to be building up slowly but steadily. It is therefore expected that the price would go up further. January 2007 may see the price of US$1330-1340/MT. HDPE HDPE, like LLDPE also rose marginally to US$1310/MT in the week of 26th December 2006. It is quite likely that firmer market situation could put pressure on price. It is expected that the price could escalate further to US$1330-1340/MT in January 2007. PP PP was stable at US$1290/MT in the week of 26th December 2006. While the market seems to be steady, the customers are sitting and waiting for suppliers to lower the price. However steady demand will inevitably increase the price to US$1320-1330/MT in January 2007. PVC PVC also inched marginally to US$810-815/MT in the week of 26th December, 2006. The price however could remain around US$810-820/MT in January 2007. PS GPPS price stagnated at US$1410/MT n the week of 26th December, 2006. It is likely to remain stable at US$1410-1420/MT in January 2007. ABS The weaker feedstock prices and lack of demand due to festive season compelled the customers to stall purchases. The price therefore reduced to US$1600/MT in the week of 26th December, 2006. ABS is likely to remain stagnated at US$1600-1620/MT in the early part of January 2007.