Price trends of oil, naphtha, polymer feedstocks and commodity polymers for the week of 5th March 2007

SUMMARY Oil prices increased by almost 1% to reach a level of US$61.70/barrel. This increase was triggered by the tightening of diesel inventory and weaker global economy. It is likely to remain strong in the remaining weeks of March 2007. Naphtha surged strongly due to high cost of oil and revival of its derivatives markets. Ethylene, propylene and EDC became weaker due to lack of strong demand on account of lack of requirement from China. However, VCM as well as styrene monomer prices gained strength. All polyolefins, with the exception of HDPE, saw a marginal increase in prices. PVC also gained, but GPPS remained stagnant. ABS prices hardened due to increase in feedstocks. March 2007 could be some what volatile with an increase in price of oil and therefore the prices of all the polymer feedstocks as well as commodity polymers OIL Oil increased by almost US$2/barrel to reach about 61.70/barrel in the week of 5th March 2007 due to slowing down of global economy. A fear of weaker supplies of diesel also contributed to this increase of almost 1%. It is likely to remain at a higher level in the coming few weeks. Oil is therefore likely to move to about US$62-64/barrel in the later part of March 2007. NAPHTHA Naphtha experienced a very sharp increase to US$635/MT in the week of 5th March 2007 partly due to high price of oil. The revival of naphtha derivatives markets also help in this rise. March 20007 may continue to see higher price of naphtha at about US$650/MT POLYMER FEEDSTOCKS ETHYLENE Demand decreased due to the Chinese holidays, exerting pressure on price of ethylene, compelling a reduction to US$1030/MT in the week of 5th March 2007. Most of the Taiwanese customers are not interested in building up stocks. It is quite likely that ethylene would remain around US$1050-1075/MT in the coming weeks of March 2007. PROPYLENE Along with ethylene, propylene declined to US$1040/MT in the week of 5th March 2007. Weak demand due to Chinese holidays was one of the major reasons. For March 2007, propylene price gets support at US$1070/MT. EDC The weaker demand made EDC prices dip to US$420/MT in the week of 5th March 2007. March 2007 could see the price of EDC to be at US$450/MT. VCM VCM prices moved upwards to reach US$685/MT in the week of 5th March 2007. Further hardening is expected in March 2007 possibly to reach US$750/MT, a very sharp increase indeed. STYRENE Higher prices of oil and benzene had an impact on styrene monomer price. It reached US$1260/MT in the week of 5th March 2007. Since this rise is not supported by increase in derivative demand, it is quite likely that the price could hover around US$1260-1270/MT in March 2007. Only higher cost of oil and benzene could make it to go up slightly to US$1280/MT in later part of March 2007. POLYMERS LDPE The resumption of work from holidays of China created a revival of interest in LDPE. The tighter supply also helped to make the price harder to reach US$1310/MT in the week of 5th March 2007. It is likely to remain at the same level in the coming few weeks of March 2007. LLDPE The demand from Chinese agriculture caused LLDPE to go up to US$1295 in the week of 5th March 2007. It is likely to remain buoyant at the price level of US$1300-1320/MT in the few coming weeks of March 2007. HDPE HDPE remained stagnant at US$1285/MT in the week of 5th March 2007. The buyers are not interested to pay a higher price due to rather dull market conditions. It is likely to remain range bound at about US$1300/MT in the coming few weeks of March 2007. PP The market was rather inactive but the price of PP gained and reached US$1270/MT in the week of 5th March 2007 due to expected gain in the demand from China. It is quite likely that the price of PP could remain around US$1290-1300/MT in the coming few weeks of March 2007. PVC PVC, due to rather dull market in China was diverted to the other non Asian regions to increase its price to about US$870/MT in the week of 5th March 2007. It is quite likely that PVC would remain stronger in the coming weeks of March 2007 around the level of US$880-900/MT. PS Chinese customers returned from holidays for purchase of PS but the price of GPPS still remained stagnant at US$1380/MT in the week of 5th March 2007. It is likely that it may go up slightly and reach US$1380-1400/MT in the remaining weeks of March 2007. ABS ABS, due to higher cost of butadiene and CAN increased marginally to US$1585/MT in the week of 5th March 2007. It is likely to remain stronger at about US$1600/MT in the remaining weeks of March 2007.