Price trends of oil, polymer feedstock and commodity polymers in Asia for the week ended September 27, 2010

CRUDE OIL Crude oil prices ended the week of September 27, 2010 at US$76.4 on the weakening US dollar and optimistic economic indicators. As the US dollar drops against the euro, it strengthens the appeal of commodities as an alternative investment. Optimism was created by fresh data on durable goods orders that did not decline as much as expected in August in the United States. US durable goods orders, orders for good expected to last at least three years, were down 1.3% overall in August against expectations of a decline of 1.4%, but were up 2% when transportation orders, which fell by 10.3%, are excluded from the equation. NAPHTHA Naphtha prices hovered around US$685/MT in Asia in the week of September 27, 2010. The last day of the week saw naphtha prices in Asia recover to a two-session high after ebbing to a two-week low on the previous day. Naphtha cracks were at a four-session low on muted spot demand from North Asia amid ample supplies. Though CPC has restarted its 450,000 tpa cracker to run at 85% capacity over the weekend, the Taiwanese major will not buy any spot naphtha because of high inventory levels since July. Formosa did not buy any spot parcels for October arrival, and is unlikely to buy spot cargoes for H1-November delivery. Open-spec prices settled at US$685/MT CFR Japan. ETHYLENE Limited avails have propelled ethylene prices in Asia to US$1100/MT in the week of September 27, 2010, due to multiple unplanned and planned cracker outages in Taiwan and South Korea. PROPYLENE Propylene prices have dropped to US$1105/MT in Asia in the week of September 27, 2010, due to limited buying interest in the region, expected to weaken as demand from China dwindles with the approaching holidays next week. Markets in Japan, China, Hong Kong and South Korea were closed in celebration of the Mid-Autumn Festival. Rising availability of deep sea cargoes has also alleviated supply concerns amid lackluster downstream demand. EDC EDC prices have inched up to US$495/MT in Asia in the week of September 27, 2010 amid robust ethylene prices. However, markets have been quiet on limited seller’s offers as markets in Japan, China, Hong Kong and South Korea were closed in celebration of the Mid-Autumn Festival. VCM Propelling ethylene values have propped up VCM prices to US$825/MT in Asia in the week of September 27, 2010. However, market lacks movement as the Mid-Autumn festival kept markets in North East Asia closed. STYRENE MONOMER Styrene Monomer prices have spiked to US$1165/MT in Asia in the week of September 27, 2010. Prices have found support from rising ethylene and benzene values amid limited avails. FOB Korea benzene prices rose past US$660/MT in line with rising crude oil values. POLYMERS Two of China's national holidays fall over three consecutive weeks this year, from Sept. 19 to Oct. 9: the three-day Mid-Autumn Festival from Sept. 22 to 24 and the seven-day National Day break from Oct. 1 to 7. Markets in Japan, China, Hong Kong and South Korea were closed in celebration of the Mid-Autumn Festival.This has affected the pace of the markets. Prices of all polymers stagnated at last week’s levels in the absence of any movement.