Price trends of oil, feedstocks & commodity polymers for the week of November 13, 2006

SUMMARY Oil remained stable at the price below US$60/barrel. It is likely to continue to show stability or even some weakness in December 2006. Naphtha, on account of increased market activities of some other feedstocks, saw a significant increase to almost US$550/MT. However,it is not likely to maintain the tempo in December 2006. All other feed stocks except EDC declined by about US$10/MT in the week of November 13, 2006. While GPPS was stable, all other commodity polymers reduced in the week of November 13, 2006. It is expected that December will witness stability or stagnancy in the prices of all commodity polymers. OIL Oil remained stable just below US$60/barrel. A very marginal increase of oil price was ascribed to a reduction of oil inventory in USA. The price will continue to remain range bound between US$58-60/barrel in the remaining period of November 2006. NAPHTHA Naphtha gained significant on the demand build up of some derivatives such as benzene, xylene etc. and reached a price of US$548/MT. It is to be seen whether the demand revival of the derivatives continue in the next month. It is likely that the price will remain between US$530-550/MT in the remaining days of November 2006. POLYMER FEEDSTOCKS ETHYLENE Ethylene prices declined by about US$10/MT and reached US$1060/MT. The quiet market & the reluctance of buyers to purchase at a higher price were two most prominent reasons that reduced the price. It is expected that price could lower to US$1050 by early December 2006. PROPYLENE Propylene price also declined along with ethylene price reduction in the week of November 13, 2006. It attained the price of US$1100/MT remained range bound between US$1115-1125/MT. The market is expecting the price to fall further down to reach a lower level of US$1050/MT by December 2006. In fact, they are not purchasing because of the expectation of price reduction. EDC The sluggish demand from China has made the sentiments weaker. EDC therefore declined marginally to US$405 in the week of 13 November 2006 from US$410 that prevailed in the week of November 6, 2006. The lack luster demand scenario would ensure further fall in the price. It is expected that price would reach a level of US$380-390/MT in December 2006. VCM The weaker sentiment coupled with wait & watch policy of the customers kept the price of VCM at the same level of the week of November 6, 2006 (US$640/MT). The revival of market does not seem likely & the price could either remain range bound between US$630-640/MT or slightly reduce to US$625/MT in December 2006. STYRENE The strong price of benzene used in manufacture of styrene monomer was responsible for a sharp increase in the price of styrene monomer from US$1230/MT in the week of November 6, 2006 to US$1255/MT in 13 November 2006 week. It is to be seen whether benzene price would remain higher or would drop quickly. Most likely the price of styrene will remain range bound between US$1230-1260/MT in December 2006. POLYMERS LDPE LDPE remained stable at US$1260/MT due to quiet market conditions. Deep cargo parcels did not find any takers mainly due to a quiet market scenario. It is expected that China's demand for LDPE will increase in December 2006. However, the price may not see any significant increase mainly due to plenty of supply mainly from deep cargoes. At the most the price rise of US$10/MT can be expected if the demand indeed increases from China. LLDPE LLDPE, like LDPE also remained quiet. The price therefore remained stable at US$1250/MT in the week of November 13, 2006. It is expected to remain range bound between US$1240-1260/MT in December 2006. HDPE HDPE price either remained at US$1260/MT or marginally increased to US$1265/MT on account of some revival of market conditions. Deep cargoes were not available for Asia. It is not likely to revive the deep cargo parcels in December 2006. It is quite likely that price could inch forward to US$1270/MT by December 2006. PP The price of PP remained almost static at US$1240/MT as the deep cargo parcels dried up. The demand from China is not strong & is not likely to revive in December 2006. It is therefore expected that the price of PP will remain between US$1230-1250/MT in December 2006. PVC PVC remained quiet with stability of price at US$800/MT. The market expects December 2006 to be sluggish because of lower demand from China due to season. It is quite likely that price of OVC would fall below US$800/MT to a level of US$780/MT in December 2006. PS The increase in the price of styrene monomer did help to increase the price of GPPS by US$10/MT. The price in the week of November 13 2006 was US$1320/MT. The customers are waiting to see whether the price would fall & are therefore not willing to build up inventories. It is quite likely that the price would fall to US$1300/MT in December 2006 because of dull market conditions. ABS ABS price declined to US$1590/MT in the week of 13 November 2006 from US$1600/MT in the week of 6 November 2006 mainly due to decline in the price of butadiene & acylonitrile despite an increase in the price of the third feedstock (benzene). The weaker market sentiment continues & the price in December is expected to decline to US$1570-1580/MT. Some deep cargo parcels were offered below US$1580/MT.