Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended June 15, 2009

CRUDE OIL In the week of June 15, 2009, crude oil prices have risen to new highs for the year to US$72.5, as compared to levels below US$35 in March. Interestingly, though oil prices have been rising for a month now, many analysts believe that the current oil valuation is not based on economic reality, but due to trading on perception that an economic recovery is underway. A fairly consistent stock market since March, reports of dropping crude-oil inventory and rising fuel consumption along with a weakening dollar are fueling the sentiments. A June report by the International Energy Agency has estimated global oil demand to be 83.3 million bpd this year- rising from 83.18 mln barrels in IEA's May report. NAPHTHA Naphtha prices in Asia are on the rise in line with robust crude oil prices in the week of June 15, 2009. Naphtha breached the 600 dollar mark for the first time since October 2008, ending the week at US$615/MT CFR Japan. ETHYLENE As demand elevates from downstream derivative markets and market outlook continues to be optimistic, ethylene prices have increased to US$805/MT in Asia in the week of June 15, 2009. July shipment prices have been evaluated about fifty dollars higher as sentiments in polyethylene and polyvinyl chloride markets continue to be positive. The supply scenario is expected to ease with restart of YNCC's No.2 cracker with capacity to produce 555,000 tpa of ethylene. PROPYLENE Healthy margins realized by downstream producers have propped up propylene demand, pushing up prices to US$835/MT for next month shipment in Asia in the week of June 15, 2009. As downstream polypropylene, 2-EH and ACN markets gained strength, FOB Korea offers from South Korea increased to US$865/MT. Buying intentions increased to US$830/MT levels as buyers' scuttle to restock could push up prices further. Supplies are expected to improve with resumption of production after 2 weeks maintenance at YNCC, bringing output from the 270,000 tpa propylene plant into the market. STYRENE MONOMER Intensifying downstream demand has pushed up Styrene Monomer prices to US$1045/MT in Asia in the week of June 15, 2009. Prices also strengthened in line with increasing costs of ethylene and benzene. However, as input costs seem to be on the rise and demand continues to persist, most sellers have preferred to wait and watch for further price movements. Feedstock benzene moved up by almost 85 dollars on increased input costs and increased elevated bids. VCM As most deals for this month have been concluded, VCM markets were very quiet in Asia in the week of June 15, 2009. Prices have stagnated at US$675/MT in the absence of sellers offers. Supported by rising input costs and recovering downstream demand, offers for next month are expected to open atleast 20 dollars higher. EDC As input costs increase on one hand and supplies tighten on the other, EDC prices have elevated to US$415/MT in Asia in the week of June 15, 2009. Supply constraints have been caused due to reduced run rates by producers. This has led to a dearth of firm offers, though sellers have hiked offers by almost 70 dollars in sync with rising input costs. POLYMERS HDPE Most traders have increased offers for next month, pushing up CFR China prices to US$1235/MT as the market sentiments strengthen in Asia in the week of June 15, 2009. For yarn/film grade, offers from South Korea have been heard around US$1245-1250/MT, and about ten dollars lower for material from South East Asia. Deals from South Korea were concluded about ten dollars lower than offers, while those form Taiwan were concluded at about US$1205/MT. LDPE LDPE prices have risen to US$1200/MT in Asia in the week of June 15, 2009, as feedstock prices increase. Suppliers have increased offers by over 25 dollars for next month shipment- offers from Middle East have been heard at US$1235/MT, and about 5-10 dollars more from South Korea. After successful conclusion of deals from South Korea at US$1230/MT for July, sellers aim to increase offers by about 20 dollars more. LLDPE LLDPE prices increased to US$1175/MT in Asia in the week of June 15, 2009. Lackluster dealing prevailed in the LLDPE market, but market outlook seem to be perking up. POLYPROPYLENE An optimistic market outlook has helped polypropylene prices move up in line with rising propylene to US$1080/MT in Asia in the week of June 15, 2009. The positive sentiments have propped up seller's offers for next month to US$1110/MT for homopolymer grade and about five dollars more for block copolymers. Deal conclusion has been below the 1100 dollar mark, while material from Taiwan has been sold yarn/injection grade for this month at about US$1100-120/MT. POLYVINYL CHLORIDE Polyvinyl chloride prices have increased to US$805/MT in Asia in the week of June 3, 2009, as elevated feedstocks amplify cost pressures. The market awaits offers for next month from most players, and anticipates an increase of 25-40 dollars as producers mull a hike to cope with increased cost pressures. GPPS GPPS prices spiked up by more than sixty dollars to US$1065/MT in Asia in the week of June 3, 2009 in line with sharply rising feedstock. GPPS for July from South Korea being offered at US$1100/MT has not met with any luck with deal conclusion. Even as buyers intentions are gauged at below US$1095/MT, offers from Taiwan have been hiked to hover around US$1085-1120/MT. Sellers have offered HIPS for next month shipment at US$1175/MT. ABS Rising by almost fifty dollars, ABS prices have increased to US$1385/MT in line with rising feedstocks. Fresh offers from South Korea have been heard about 20 dollars higher, and at US$1410/MT from Taiwan with deal conclusion at about US$1385/MT