Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended April 21, 2008

CRUDE OIL The week of April 21, 2008 has witnessed all time high crude oil prices. At the end of the week, crude oil for May delivery settled at US$116.60 a barrel on the New York Mercantile Exchange. Mid way through the week, oil futures hit a record high near US$115 after a US government report showed an unexpected drop in reserves of crude. Crude stockpiles in the US, which had been expected to increase, fell 2.3 million barrels last week. On Friday, oil prices rose to touch US$117 for the first time after an attack on a Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta. A pipeline leak has been confirmed, a line has been closed for repairs, and a small quantity of production had been shut. NAPHTHA Naphtha prices in Asia continued on their upward jaunt in the week of April 21, 2008, in line with record high crude oil prices. Open-spec naphtha prices for H1 June delivery rose by almost twenty dollars to close at US$950/MT CNF Japan. ETHYLENE Ethylene prices in Asia continued to rise to US$1350/MT in the week of April 21, 2008 on the back of restricted supplies from key producers. Supplies have been hit as several crackers continue to operate at reduced running rates due to the record high prices that feedstock naphtha continue to set. No deals were concluded for material for May shipment that was quoted at US$1400/MT FOB Korea by suppliers from South Korea. Buyers from China continue to peg buying interest at US$1300/MT CFR China levels. PROPYLENE Propylene prices in Asia continued to rise to US$1320/MT in the week of April 21, 2008 on the back of restricted supplies from key producers. Supplies have been hit as several crackers continue to operate at reduced running rates due to record high feedstock naphtha prices. VCM VCM prices maintained their upward march in Asia, rising to US$935/MT in the week of April 21, 2008. Buoyant feedstock naphtha and ethylene prices, coupled with restricted supplies in the region have kept VCM prices high. Tight availabilities across the Asian region have also fuelled bullish market sentiment. As cost pressures mount, Japanese suppliers plan to offer material for May above US$950/MT CFR China, and US$970/MT CFR SE Asia level. Situation of restricted supply is expected to continue until June, hence sellers offers for May are expected to be further hiked. EDC Escalating feedstock ethylene prices have firmed up EDC prices to US$445/MT in Asia in the week of April 21, 2008. A 5000 ton cargo from Indonesia has been effectively traded at US$445/MT CFR China. Selling intention by most suppliers above US$450/MT CFR China for May delivery, is expected to be met with buyers resistance. Buyers are disinclined to buy at the higher levels, in anticipation of US deep-sea cargoes scheduled to invade the Asian market. STYRENE MONOMER SM prices moved up by ten dollars to US$1430/MT in Asia in the week of April 21, 2008. Material for May shipment was being offered at US$1430/MT FOB Korea, while prices for June shipment have strengthened further above US$1435/MT FOB Korea. In line with rising oil prices, feedstock benzene prices have moved up by ten dollars to US$1100/MT FOB Korea level. Deals for the next few weeks have been concluded above US$1100/MTmt FOB Korea. POLYMERS HDPE Dormant demand from China has kept HDPE market outlook gloomy in Asia in the week of April 21, 2008. Absence of buying interest has kept seller offers subdued at US$1600/MT CFR China. In fact, deals for few cargoes have been settled at below US$1600/MT CFR CMP, while some cargoes from South Korea have been traded at US$1590/MT CFR China levels. LDPE LDPE prices stagnated at US$1760/MT in Asia in the week of April 21, 2008 on sluggish markets that remained dull while buyers awaited firm offers for May shipment. Most deals for April shipment were closed at US$1750/MT CFR China levels, but the market still awaits offers for May. Cargoes have been traded in a wide price range from US$1720/MT to US$1790/MT CFR China levels. Limited supplies continue in the region, as demand has shrunk at the end of the agricultural season in Asia. However, producers are unwilling to lower their offers below US$1750/MT CFR China as the EVA market continues to be firm. LLDPE LLDPE prices stagnated at US$1640/MT in Asia in the week of April 21, 2008 on sluggish markets sentiments awaiting firm offers for May shipment. Asian demand for LLDPE has been subdued as prices continue to be pressured by bearish HDPE market sentiments. PP Polypropylene prices in Asia have risen to US$1570/MT in Asia in the week of April 21, 2008, propped by tight supply coupled with higher feedstock propylene cost. May offers from Asia are expected to rise by another twenty dollars. PVC Robust feedstock ethylene and calcium carbide costs have spiked PVC prices up to US$1150/MT in Asia in the week of April 21, 2008. In line with persistent hikes in feedstock calcium carbide and ethylene costs, most key producers from Taiwan, Japan and Korea plan to hike May offers by over sixty dollars. GPPS Propped by higher feedstock SM prices, GPPS prices rose to US$1480/MT in Asia in the week of April 21, 2008. The 15-20 dollar hike was not met with improved market demand. A thirty dollar difference exists between most CFR China offers from sellers and buying intention at US$1490/MT CFR levels. Offers from South Korea were quoted at US$1520/MT CFR China and recent deals were concluded just twenty dollars lower. ABS Rising costs of feedstock SM, butadiene and ACN have kept ABS prices in Asia firm at US$1840/MT in the week of April 21, 2008. Most CFR China offers from South Korea and Taiwan for April shipment pegged at US$1880/MT for April shipment were met with buying interest from Chinese buyers lower by at least forty dollars.