Price trends of oil, polymer feedstock and commodity polymers in Asia for the week of January 26, 2009

CRUDE OIL Crude oil prices have risen to hover under US$46/barrel in the week of January 26, 2008. Friday witnessed a 3 dollar surge ahead of the Lunar New Year holidays, and also reflected expectations that crude stockpiles will ease as OPEC members strictly implement production cutbacks. However, oil ended the week with a dip following a report that the International Monetary Fund will further lower its world economic growth forecast. In November, the IMF forecast that advanced economies would contract this year for the first time since World War II and lowered its global growth forecast by 0.8 points to 2.2%. NAPHTHA Naphtha prices have risen in Asia in line with rising crude oil prices in the week of January 26, 2009, mainly due to recovering downstream demand. Open-spec naphtha climbed to US$420/MT CNF Japan even as buyers refrained from buying as they break for the Lunar New Year holidays. Players from Mainland China, Taiwan, Hong Kong and South Korea embark on one week holiday on Jan 26. ETHYLENE Ethylene prices steadied at US$610/MT in Asia in the week of January 26, 2009, as buyers were absent from the market on account of the Lunar New Year Holiday. Last week witnessed a healthy boost in prices triggered by rising prices of downstream PE along with increased naphtha values. Sellers have further hiked offers for February shipment, as players from Mainland China, Taiwan, Hong Kong and South Korea embark on one week holiday on Jan 26. PROPYLENE Propylene prices firmed up at last week's US$595/MT in Asia in the week of January 26, 2009. Recovering downstream markets along with restricted supplies due to reduced cracker run rates propelled propylene prices up last week. Strengthening demand from Chinese downstream industry is expected to keep markets robust when the Asian players return from their Lunar New Year break. EDC EDC prices have firmed up with steadying feedstock ethylene as well as downstream EDC and PVC markets. CFR China EDC prices maintained the momentum at last week's US$155/MT in the week of January 26, 2009, in the absence of players from Mainland China, Taiwan, Hong Kong and South Korea. Market outlook continues to be optimistic and demand is expected to be on a recovery path and offers are expected to rise when the market players return after the Lunar New Year holiday. VCM VCM prices have sustained at last week's US$525/MT in Asia in the week of January 26, 2009 in the absence of players from Mainland China, Taiwan, Hong Kong and South Korea. Though few deals were concluded this week, a rally in feedstock EDC values as well as downstream PVC prices has supported a hike in VCM prices last week. A positive markets outlook will keep CFR China values for February shipment about 15-25 dollars higher. STYRENE MONOMER FOB Korea Styrene Monomer prices for March shipment have increased to US$660/MT as the market is perceived to have bottomed out. However, deal conclusion was not possible due to the absence of firm offers in the week of January 26, 2009. Styrene Monomer prices, however, could get affected along with benzene prices with the influx of several BTX cargoes from the US, Europe and Middle East. About 45,000 tons of cargoes from Europe, about 70,000 tons from USA is expected to arrive in Asia until February. These low priced cargoes have found their way into Asian markets as traders attempt meet demand with the low-priced material amid operation cuts by Asian producers. POLYMERS HDPE HDPE prices have firmed at US$920/MT in Asia in the week of January 26, 2009 in the absence of players from China, Taiwan, Hong Kong and South Korea. Though this week did not see major activities, last week tempted buyers to initiate stockpiling, building up demand in the region, as feedstock markets seem to be on an uptrend. Markets are expected to be positive on hiked sellers offers when they open after a week-long break. LDPE LDPE prices steadied at last week's US$925/MT in Asia in the week of January 26, 2009 in the absence of players from Mainland China, Taiwan, Hong Kong and South Korea. Encouraged by recovering demand from China, sellers from South East Asia and the Middle East have hiked CFR China February shipment offers to around US$945-950. Prices could come under pressure with Iran's Arya Sasol's 300,000 tpa LDPE plant coming onstream toward the end of the month. LLDPE LLDPE have moved up to US$915/MT in Asia in the week of January 26, 2009. Markets are expected to open on a positive note whne players return from their Lunar New Year break. POLYPROPYLENE Polypropylene prices steadied at last week's US$800/MT in Asia in the week of January 26, 2009. Prices stagnated on account of inactivity in the region due to the holidaying Chinese buyers. CFR China offers February shipment for yarn grade have been heard at varying levels, the lowest being from South Korea at US$800/MT, about 10-20 dollars higher from Malaysia, with the highest offers from Taiwan at US$840. POLY VINYL CHLORIDE PVC prices steadied at last week's US$670/MT in Asia in the week of January 26, 2009. In the absence of players from China, Taiwan, Hong Kong and South Korea very few deals were concluded. GPPS CFR China GPPS offers increased to US$740/MT in Asia in the week of January 26, 2009, triggered by increasing SM values. Very few deals were concluded in the week as the Chinese refrained from buying as they took a break for the Lunar New Year. ABS ABS prices have stagnated as producers increase production rates by 10-20% since November/December. Last week buyers expressed an interest to buy at around US$1000/MT in response to seller's offers of US$1030/MT. Feedstock acrylonitrile has been robust on intentions from buyers to restock before the Chinese Lunar New Year holiday. Prices are not expected to perk up as dismal performance and outlook of the automotive industry continues to depress the ABS markets in Asia.