Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended May 18, 2009

CRUDE OIL Crude oil settled at US$59 at the end of the week of May 18, 2009, as Nigerian militants threatened to block waterways used for energy exports and an explosion and fire affected production at Sunoco Inc. refinery. Mid week, prices dipped as the US Labor Department reported that new jobless claims rose to a seasonally adjusted 637,000 last week, above analysts' expectations of 610,000. Reports in the week of retail sales, unemployment and housing in USA have traders reconsidering their outlook for the economy. Along with US, reports from Europe showed the euro zone economy shrank by 2.5% in Q1. International Energy Agency has reduced forecast of global oil consumption for a ninth consecutive month and with expectation that demand could 3% in 2009- about 2.6 mln bpd fewer than last year. Will these fresh reports push back oil prices to US$50? NAPHTHA Naphtha prices in Asia rose by about 15 dollars in Asia in the week of May 18, 2009. Naphtha rose in line with optimistic oil and gasoline values and buoyant naphtha prices in Europe on news of a possible economic revival. Open-spec naphtha values for H2-June delivery settled at US$490/MT CFR Japan. ETHYLENE Ethylene prices rose to US$705/MT in Asia in the week of May 18, 2009 amid dual influence of recovering sentiments in downstream polyethylene markets on one hand and supply constraints caused by planned maintenance shutdowns on the other. Seller’s offers spiked past US$715/MT FOB Korea. PROPYLENE Restricted supplies have pushed up propylene prices to US$810/MT in Asia in the week of May 18, 2009. Supplies have been affected by the planned shutdowns at naphtha crackers in Singapore, China and South Korea. STYRENE MONOMER Several key market participants of SM were busy at the 2 day APIC meet concluded on 15th May in Seoul, and hence did not quote. Styrene Monomer prices increased marginally to US$885/MT in Asia in the week of May 18, 2009 as markets remained dull on muted market sentiments. Benzene prices for June shipment dipped to US$610/MT due to lackluster buyer’s demand. VCM VCM prices have stagnated at US$625/MT in Asia in the week of May 18, 2009 mainly in the absence of deal conclusion, as the market awaits June shipment offers. Most sellers have withheld quotes as they wait for the downstream PVC markets to settle down and gain a direction. Most buyers have refrained from concluded transactions as they await a price correction in line with downstream PVC market sentiments. EDC EDC prices have spiked to US$375/MT in Asia in the week of May 18, 2009 as supplies were squeezed in the continent. A reduction in rates at several chloro-alkali plants across the globe has compelled lower run rates at EDC plants. CFR offers from sellers were assessed at the 400 dollar mark, while buying intentions were estimated about twenty dollars lower. POLYMERS HDPE As feedstocks mounted and increased offers were quoted for next month, HDPE prices moved up to US$1210/MT in Asia in the week of May 18, 2009. CFR China offers for June for film grade from Middle East and Taiwan were quoted at US$1210/MT levels, while the market awaits offers from South Korea. CFR China offers for yarn grade rose to US$1270/MT. LDPE Propped by persistent restricted avails in the region, LDPE prices have increased to US$1200/MT in Asia in the week of May 18, 2009. The restart of QAPCO’s 400,000 tpa LDPE plant at Mesaieed after a 15 say unplanned shutdown, could better the supply situation and ease prices. LLDPE LLDPE prices rose to US$1160/MT in Asia in the week of May 18, 2009, moving in line with rising HDPE prices. CFR China offers from Taiwan were pegged at US$1175/MT as deals concluded about twenty dollars lower. Deals for few June shipment deep sea cargoes were concluded above US$1130/MT. POLYPROPYLENE As feedstock propylene prices recoiled, polypropylene prices sprang back to US$1095/MT in Asia in the week of May 18, 2009. CFR China offers from South Korea and Middle East that were raised to US$1100/MT for yarn/injection grade, were transacted at about 10 dollars lower. The previous week witnessed a pessimistic market outlook on deteriorating demand from China and the estimated influx of cargoes from the Middle East and India. POLY VINYL CHLORIDE As both buyers and sellers refrain from transactions, PVC prices in Asia stagnated at last week’s US$740/MT in Asia in the week of May 18, 2009. Markets were lackluster as most sellers preferred to quote June shipment offers post-APIC conference scheduled to conclude on 15 May in Seoul, South Korea. As PVC prices quoted by China’s local sellers stopped falling and marginally firmed up, PVC offers have been assessed above US$735/MT CFR China. GPPS GPPS prices have risen to US$985/MT in Asia in line with rising feedstock values in the week of May 18, 2009. Feedstock SM prices have spiked by over fifty dollars in the past 15 days. After successful conclusion of few deals for June shipment at US$950/MT, offers have been hiked by fifty dollars. These increased offers have, however, met with resistance from buyers who have expressed intent to buy at US$960/MT CFR. CFR China offers from Taiwan were heard just under the thousand dollar mark for GPPS grade, while HIPS grade was being offered at US$1100/MT. ABS ABS prices have moved up to US$1360/MT in Asia in the week of May 18, 2009, corresponding with Styrene monomer costs that have risen by fifty dollars in two weeks. Offers from Taiwan spiked to US$1385/MT CFR China. June shipment prices could be softer as dull demand from China has induced select sellers to reduce offers by 20-25 dollar.
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