Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended April 6, 2008

CRUDE OIL Crude oil prices moved up by less than a dollar in New York in the week of April 6, 2008. Falling weekly gasoline inventories in USA and a weakening US dollar have kept oil prices afloat in the week. During the week, the dollar dropped on release of a government report showing that US economy lost jobs for a third consecutive month in March, raising concerns that the country is slipping into a recession. This led to a further fall in the value of the dollar against the euro, prompting investors to purchase commodities. Investors have moved money into commodities to hedge against inflation as returns outpaced those of financial markets. NAPHTHA Naphtha prices in Asia yo-yoed during the week in line with crude oil values. Open-spec naphtha values for H2-May delivery ended at US$900/MT CNF Japan in the week of April 6, 2008 ETHYLENE Steady and unrelenting demand for May shipment coupled with restricted supply has kept ethylene prices in Asia at a high of US$1260/MT in the week of April 6, 2008. Supply continues to be restricted in Asia as many producers are running their crackers at reduced rates due to poor margins. South Korean producers managed to conclude deals at US$1280-1300/MT FOB Korea. Enthused by this, they have quoted fresh offers at more than US$1300/MT for H1 May shipment. PROPYLENE Propylene prices were fairly steady in Asia, lingering at US$1280/MT in the week of April 6, 2008. Absence of firm offers from producers in South Korea has kept markets quiet despite buying intentions lingering at US$1300/MT CFR China. STYRENE MONOMER Styrene Monomer prices for May shipment dipped to US$1435/MT in Asia in the week of April 6, 2008. Few deals were concluded at last weeks levels, but prices finally dipped in the week. Meanwhile, feedstock benzene prices dropped in the week by about ten dollars on weakening demand. Absence of several players from the market also led to quiet market conditions. A large number of benzene cargoes to be dispatched to Southeast Asia next month will restrict the availability of benzene in the spot market of Asia. VCM VCM prices witnessed a robust hike to US$895/MT in Asia in the week of April 6, 2008. This sharp hike can be attributed to restricted supply across the region and bullish downstream PVC markets, propelled by robust demand from India and Middle East. CFR offers in South East Asia were pegged at above US$960/MT, leaing to an assessment that market prices range at US$950-960/MT. Offers for May are foreseen to be pegged at US$900/MT CFR CMP levels. EDC EDC prices firmed up to US$440/MT in Asia in the week of April 6, 2008 on two counts : a robust ethylene market gaining strength during the week and rising prices of upstream caustic soda. Producers quoted offers at over US$450/MT CFR Asia, met with weaker buying interest at least twenty dollars lower. Robust inventories with the downstream VCM producers have kept demand from gaining strength. POLYMERS HDPE HDPE prices dipped to US$1630/MT in Asia in the week of April 6, 2008, indicating a gloomy market outlook. HDPE requirement from processors in China has been cutback because of more stringent regulation in China regarding HDPE bag usage, leading to stockpiling. Robust inventories in the domestic market have kept demand from buyers in China subdued- keeping Asian HDPE markets bearish. Most offers from South Korea for April shipment slipped by twenty dollars, but buying intentions from China were pegged lower at US$1600/MT CFR. LDPE LDPE prices weakened to US$1770/MT in Asia in the week of April 6, 2008. Waning LDPE prices can be attributed to slow moving demand from China. Few deals were concluded at seller offers that dipped below US$1750/MT, as they were met with resistance from the Chinese buyers. Buyers preferred to wait and watch in anticipation of a further decline in price. LLDPE Just like LDPE, prices for LLDPE also dipped due to limp demand from China. LLDPE prices dropped to US$1650/MT. Offers for April shipment dropped by a further ten-twenty dollars CFR China. PP Limited supply in the region has pushed polypropylene prices in Asia up to US$1550/MT in the week of April 6, 2008. Tight supply was accompanied by completion of April deals by many suppliers. South Korea's 350,000 tpa KPIC and 250,000 tpa Honam Petrochemical PP plants are on a one month maintenance shutdown, affecting supplies for April. April cargoes from producers in South Korea, India and Taiwan were sold at US$1530-1550/MT CFR China. PVC Robust demand from India and the Middle East has sustained polyvinyl chloride prices at a higher level of US$1120/MT in Asia in the week of April 6, 2008. In the quest for better price realization, key producers have shown a preference to divert cargoes towards West Asia and Middle East from China. GPPS Lackluster demand from China has maintained GPPS prices in Asia at last weeks' US$1465/MT in the week of April 6, 2008. Offers continue to be pegged by sellers at about US$1490/MT CFR Hongkong/China, even as buying intentions persist atleast twenty dollars lower. ABS ABS prices in Asia stagnated at US$1820/MT amid restrained demand from Chinese buyers in the week of April 6, 2008. Higher feedstock costs continue to push South Korean and Taiwanese offers for April shipment up to US$1875/MT CFR. However, broad buying interest ranged no higher than USD1810/MT CFR CMP for 1H of April shipment.