Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended June 1 2009

CRUDE OIL New York's main futures contract, light sweet crude for July delivery spiked to US$66.8 a barrel while Brent North Sea crude rose past US$66 in the week of June 1, 2009. Prices have spiked to seven month highs fuelled by a rise in regional equities markets and a weakening US dollar; moving in sync with stock markets in Asia. Investors are buying commodities as the US dollar weakens as a weak US currency makes dollar-priced oil cheaper for holders of stronger currencies and tends to stimulate demand and push prices higher. Oil and gasoline prices hit a new high for the year despite expectations that OPEC will not cut production again and more bad news from USA as a bankruptcy filing by General Motors Corp. appeared inevitable. NAPHTHA Naphtha prices in Asia have spiked in line with rising oil prices in the week of June 1, 2009. Open spec naphtha values for H1 July delivery have risen by over fifty dollars past US$575/MT CNF Japan. ETHYLENE Ethylene prices have risen to US$755/MT FOB Korea in Asia in the week of June 1, 2009. As oil and naphtha prices increase, ethylene prices have also moved up despite deteriorating derivative markets. Sellers have hiked CFR offers by an additional 25 dollars more than US$800/MT as they cope with rising input costs. However, the market faces resistance from buyers at these price levels due to weakening derivative markets and lackluster demand from China. Deal conclusion is expected at around US$780/MT levels. PROPYLENE Despite a supply glut, propylene prices have moved up to US$785/MT in Asia in the week of June 1, 2009. Prices have risen in tandem with increased input costs even on subdued market sentiments triggered by increasing supplies from Malaysia along with an influx of sizeable volume of deep-sea cargoes. STYRENE MONOMER FOB Korea styrene monomer prices have increased to US$925/MT mainly due to a buoyant market outlook in the week of June 1, 2009, coupled with increased input costs. Markets were abound with activity mainly on growing demand for urgent delivery, and June shipment deal was heard concluded at about US$940/MT. Deals for July shipment for benzene rose in line with oil and naphtha prices to US$640/MT FOB. VCM Under the dual influence of demand recovery in downstream PVC markets and rising feedstock oil and naphtha prices, CFR China VCM prices have moved up to US$665/MT in Asia in the week of June 1, 2009. EDC EDC prices have stabilized at US$380/MT in Asia in the week of June 1, 2009 despite improving downstream markets and increasing input costs. CFR China seller’s offers that continued to hover above US$400/MT has seen a 10-15 dollar increase in line with rising oil prices. Interestingly, an improvement in VCM and PVC markets has failed to buoy up buying interest for June shipment from China above US$380/MT CFR China. POLYMERS HDPE Feeble demand from China has led to a slip in HDPE prices to US$1205/MT in Asia in the week of June 1, 2009. CFR China seller’s offers persist above US$1210/MT after a bulk of June shipment deals were concluded above US$1215/MT for film grade. CFR China June shipment offers for injection molding grade from Saudi Arabia’s new plant have dipped as low as US$1115/MT, while offers for blow molding grade from USA for next month delivery were heard at around US$1065/MT. LDPE Lackluster buying in China has subdued LDPE prices to US$1165/MT in Asia in the week of June 1, 2009. Market outlook has been gloomy and at a virtual standstill in the absence of sellers offers and buyers bids. Buyer’s offers have slipped below the 1200 dollar mark, while CFR China buying interest has been gauged at around US$1155/MT. LLDPE Muted demand from China has pulled down LLDPE prices to US$1115/MT in Asia in the week of June 1, 2009. As market activities slow down, offers have dipped to US$1100/MT. POLYPROPYLENE Restrained buying in China has cast a shadow on PP markets of Asia, bringing down prices to US$1045/MT in Asia in the week of June 1, 2009. As most deals for this month shipment have been concluded, very few offers have been heard from sellers. Market outlook continues to be subdued and buyers prefer to wait and watch for a price correction in anticipation of mounting supplies in the month. Supplies are expected to increase in the region on restart of Titan’s 280,000 tpa PP plant in Malaysia after a three week maintenance shutdown and also commencement of Reliance’s new 900,000 tpa plant in India after completion of test run. POLY VINYL CHLORIDE As most producers have concluded deals for this month shipment, polyvinyl chloride prices have remained at last week’s US$775/MT in Asia in the week of June 1, 2009. After Thai and Taiwanese producers have concluded deals at US$775/MT, few offers have been heard about 30 dollars higher as input costs mount and supplies become restrained. Japan’s Shin-Etsu plans a ten day maintenance shut down at its 550,000 tpa plant located at Kashima shortly. GPPS GPPS prices have dipped to US$960/MT in Asia in the week of June 1, 2009 as restrained demand keeps stocks abundant despite cuts in production rates by key producers. CFR China HIPS grade was being assessed at US$1055/MT on muted demand. ABS ABS prices have wilted to US$1315/MT in Asia in the week of June 1, 2009 on persistent unenthusiastic demand from China and deteriorating butadiene costs. June shipment CFR China offers from Taiwan have slipped by about 15 dollars to US$1325/MT, and to US$1340/MT from Korea. While most buyers prefer to wait and watch, few minor deals have been concluded under US$1315/MT.