Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended July 6, 2009

CRUDE OIL Bleak unemployment figures from USA and Europe have sunk oil prices to US$66/barrel. Weak jobs figures suggest tepid consumption that will dampen crude demand. A Labor Department report indicated 467,000 jobs were lost in June - a larger than expected drop that has pushed up unemployment rate to 9.5% at 26 year highs. Unemployment in the 16 countries that use the euro spiked to 10 year highs in May. Rising oil inventories as well as gasoline stocks in USA are evidence of weak demand. This dip comes after oil prices touched eight month intraday highs of US$73.38 earlier this week on increasing investor concerns that doubling of crude price since March isn't justified by a sluggish global economy. NAPHTHA Naphtha prices in Asia have dropped below US4600/MT, deteriorating along with dwindling crude oil prices in the week of July 6, 2009. Naphtha for H2-August shipment settled a tad below US$600/MT CFR Japan. ETHYLENE Ethylene prices shot up to hover around the 1000 dollar mark in Asia in the week of July 6, 2009. Prices spiked by over hundred dollars and found support from optimistic downstream market sentiments and restricted avails. The market is short supplied on account of a sudden slump in cargoes from Iran and as a result of the postponed restart of Fujian Petrochemical's cracker. FOB Korea prices stood at US$995/MT in Asia this week. PROPYLENE Robust downstream demand has managed to boost demand for propylene, spiking FOB Korea prices to US$955/MT in Asia in the week of July 6, 2009. STYRENE MONOMER Healthy demand along with rising benzene prices has strengthened Styrene Monomer prices in Asia to US$1100/MT in the week of July 6, 2009. Buying intentions have increased to US$1095/MT, but deal conclusion is awaited as sellers refuse to quote offers. Healthy demand has fortified FOB Korea feedstock benzene prices for August shipment to US$855-875/MT. VCM VCM prices have improved and moved up to US$715/MT in Asia in the week of July 6, 2009, in line with optimistic PVC markets and buoyant feedstock ethylene prices. Typical CFR China July shipment offers were heard at US$720/MT, with deal conclusion marginally lower. Sellers are considering yet another hike in prices to US$750/MT in line with upbeat outlook for feedstocks and derivative markets. EDC Upbeat outlook for feedstock ethylene and derivative PVC have boosted EDC prices to US$435/MT in Asia in the week of July 6, 2009. Restricted avails have also supported a price hike in the region, spiking offers to US$485-500/MT. Buying bids have risen, but hover about 40-45 dollars lower than offers and await deal conclusion as sellers wait for prices to correct themselves in line with restricted availability globally. POLYMERS HDPE Rising prices of feedstock ethylene have pushed up HDPE prices to US$1265/MT in Asia in the week of July 6, 2009. Typical July shipment offers for film grade rose above US$1275/MT CFR China. CFR China deals from Taiwan, Thailand, Malaysia and South Korea were concluded at US$1260-1275/MT. LDPE A dearth of supplies along with increased feedstock costs has pushed up LDPE prices to US$1235/MT in Asia in the week of July 6, 2009. After successful conclusion of CFR China deals at US$1230/MT, offers were hiked to levels of US$1245-1250/MT. LLDPE Buoyant ethylene market outlook and rising HDPE prices along with inadequate supplies in the region have propped up LLDPE prices in Asia to US$1225/MT in the week of July 6, 2009. POLYPROPYLENE Increased input costs have pushed up polypropylene prices to US$1135/MT in Asia in the week of July 6, 2009. Polypropylene sellers have hiked July shipment CFR China offers past US$1150/MT. CFR China offers from Taiwan, Middle East and Malaysia have risen past US$1150/MT. POLY VINYL CHLORIDE Buoyant processor demand and rising input costs have pushed up PVC prices to US$870/MT in Asia in the week of July 6, 2009. Select deals have been concluded at US$875/MT levels. Rising feedstock costs have pushed up offers for next month shipment by about 50 dollars. GPPS Sharply rising SM prices have pushed up GPPS prices in Asia to US$1155/MT in the week of July 6, 2009. Key suppliers hiked offers past US$1150/MT, as the market outlook turned optimistic. PS market turned bullish last week as major suppliers sharply hiked their offer prices. H2 July/August shipment CFR China HIPS prices climbed past US$1200/MT. ABS ABS prices rose in line to US$1395/MT with rising input costs and robust demand in the week of July 6, 2009. Sellers offer H2 July/August shipment material about 25 dollars higher though buying interest remains pegged at the 1400 dollar mark.