Price trends of oil, feedstock and commodity polymers in Asia for the week of October 23, 2006

SUMMARY Oil continued to remain static in a narrow range of US$58-60/barrel for the third week in succession. However its uncertainty exerted pressure on the price of naphtha. Ethylene, propylene & EDC declined due to lack luster demand scenario in the Asian markets. VCM remained static. A very sharp price increase in styrene was due to a very high increase (US$150/MT) in the price of benzene. PE & PP remained softer in the week of October 23rd 2006. PVC price crashed due to bearish demand in China. Both PS & ABS remained static despite a sharp increase in the price of styrene & other feedstocks. OIL Oil has remained with in a narrow range between US$58-60/barrel in the week of 23rd October 20006. OPEC may not be able to restrain the production of oil. In fact, November futures are quoted at US$56/barrel. It appears that oil will continue to remain in a narrow band between US$55-58/barrel until the end of 2006. NAPHTHA Naphtha increased from US$527/MT to US$533/MT. This increase is marginal because of uncertainty of oil price. The market remains stagnant. The price would remain between US$530-535 until the end of December 2006. POLYMER FEEDSTOCKS ETHYLENE Ethylene price declined from US$1100/MT in the week of 16th October 2006 to US$1075-1080/MT in this week. For November, suppliers are aiming to seek price of US$1100/MT. The price of ethylene certainly will remain soft at least until November 2006. PROPYLENE Propylene prices, like ethylene prices also became soft in the week of October 23rd 2006. Prices declined from US$1145/MT in the week of 17th October 2006 to US$1130/MT in the week of October 23rd 2006. The suppliers desire to sell at the price range of US$1140-1150/MT, while the customers are interested in doing business at US$1100/MT. EDC EDC, from US$450/MT in the week of October 17th 2006 fell to US$420/MT in the week of October 23rd 2006. The lack of demand for PVC from China may continue to put pressures on price of EDC in November 2006. It is quite likely that the price of EDC in November 2006 would remain softer in the range of US$440-420/MT. VCM VCM price remained stagnant at US$690/MT for the second week. Chinese producers of PVC are bidding for VCM price of US$640-650/MT. The lackluster demand of PVC in Asia & particularly in China will not allow an increase in price of VCM until the end of 2006. STYRENE A very sharp increase of almost US$150/MT in benzene price allowed an increase in price of styrene price from US$1250/MT in the week of 17th October 2006 to US$1290-1300/MT in the week of October 23rd 2006. It is expected that the price of styrene will continue to face the price pressure & at most it will be offered at US$1300/MT in November 2006. POLYMERS LDPE From US$1330/MT, LDPE declined to US$1300/MT, mainly due to lack of demand from China. It is expected that LDPE will continue at this price in November 2006. The producers of LDPE are interested in getting the parcels at US$1280/MT in November 2006. LLDPE LLDPE price also declined due to weaker market sentiments from China. The price of LLDPE attained US$1280/MT in the week of October 23rd 2006 from US$1320/MT in the week of October 17th October 2006. The availability of a few supplies of cheaper from USA also has made the market softer. November may witness the price decline further to US$1250/MT. HDPE The bearish market conditions along with cheaper deep cargoes have reduced the price of HDPE just below US$1300/MT in the week of October 23rd 2006 from price of US$1340/MT in the week of October 17th 2006. Apparently, US suppliers are offering the price of HDPE in the range of US$1220/MT for early November shipments. It is not expected that the price of HDPE will go northwards in November 2006. Most likely it will decline further down to US$1250/MT. PP The bearish market conditions in Asia along with cheaper deep cargoes compelled the suppliers of PP to reduce the price from a level of US$1300/MT in the week of October 17th 2006 to US$1270-1280/MT in the week of October 23rd 2006. PP price is expected to remain softer due to interests of US suppliers to offload the supplies at US$1220/MT. In fact, the price offered for early November 2006 shipment is around US$1220/MT. November 2006 will not see any upward revision of price. The price if at all could slide downwards in November 2006. PVC PVC price crashed to US$900/MT in the week of 23rd October 2006 from US$960/MT in the week of 17th October 2006. Chinese producers of PVC are only interested to obtain PVC at price below US$850/MT. November 2006 will witness the price of PVC below US$900 or could go down to US$850-870/MT. PS GPPS price almost remained stagnant between US$1300-1310/MT in the week of October 23rd 2006 despite of an increase in the price of benzene & styrene monomer. The inactive market conditions are responsible for this price. High price of feedstocks will inevitably see an increase in price of GPPS in November 2006. Most likely it will touch US price of US$1350/MT in November 2006. ABS ABS also remained static between US$1590-1600/MT in the week of October 23rd 2006. An increase in the prices of benzene, butadiene & styrene monomer will eventually increase the price of ABS to at least US$1650/MT in November 2006.