Price trends of oil, polymer feedstock and commodity polymers in Asia for the week of June 30, 2008

CRUDE OIL As the American dollar dipped lower against the euro, demand for oil (priced in the US dollar) has been stimulated by traders holding stronger currencies. Oil prices have touched an all time high of US$144 per barrel on 30 June 2008, despite a conference and protests staged in response to soaring crude. For now, it is assured that the market remains well sustained by the overall weak dollar, increasing investor interest in commodities, continuous interruption in supply coupled with geopolitical tensions in oil producing nations of Iran, Iraq and Nigeria. On Friday, oil prices dipped marginally after hitting all time highs of US$140 per barrel, attributed to a forecast by OPEC president that prices could soon surge as high as US$170 a barrel. Analysts have pinpointed to an inflow of investor funds as a cause for the dramatic rise in prices. The role of speculation in the crude oil rise is no longer contested because even US politicians are raising the matter. NAPHTHA In line with robust crude oil prices, naphtha prices in Asia have spiked past the twelve hundred mark to US$1220/MT in the week of June 30, 2008. Open-spec naphtha prices for H1-August shipment soared by over seventy dollars for the week. ETHYLENE Ethylene prices in Asia continued firm at US$1610/MT in the week of June 30, 2008. Prices saw restricted movement on account of fewer deals concluded due to lack of firm sellers offers and buyers bids. However, in view of record high oil and naphtha values, sellers have maintained their selling offers for July shipment at higher values of US$1650/MT FOB Korea. However, buying intentions are still pegged at the lower level of US$1600/MT CFR. PROPYLENE Propylene prices persisted in strength, rising to US$1810/MT in Asia in the week of June 30, 2008, in line with robust crude oil and naphtha values. Selling intentions were heard around US$1850/MT CFR China, while buyers bids for July cargo continued to hover around US$1800/MT CFR China levels. STYRENE MONOMER Styrene Monomer prices for August shipment edged up to US$1635/MT in Asia in the week of June 30, 2008, in line with surging feedstock benzene values. Pushed forward by robust crude and naphtha values, sellers' intentions were pegged above US$1640/MT FOB Korea, as buyer's bids also moved up. Deals for August shipment benzene were concluded at US$1340/MT FOB Korea. VCM Awaiting price settlement for July shipment, VCM prices in Asia stabilized at US$1000/MT CFR levels, in the week of June 30, 2008, propped by high feedstock values and robust downstream PVC market sentiments. Interestingly, PVC producers from China are reluctant to buy at these sharp prices, while sellers are unwilling to reposition their offers. Prices will settle at the values depending on who will relent first. EDC Steady demand from buyers from China has kept EDC prices at a higher level of US$530/MT in Asia in the week of June 30, 2008. Surging naphtha and ethylene values have also kept prices buoyed above the five hundred mark. As ethylene costs continue to surge, buyers from China are more anxious to buy EDC cargoes in the spot market. Market sentiments indicate that robust naphtha values above US$1200/MT levels will sustain EDC prices above the US$550/MT mark. POLYMERS HDPE As demand from China nosedived, HDPE markets weakened in Asia to US$1815/MT in the week of June 30, 2008. Offers for July witnessed a drop of around twenty dollars in line with plummeting domestic market of China. Most buyers in China preffered to wait and watch for a further price drop, despite a dip in prices announce by suppliers this week. As the Chinese market weakens, few Asian producers propose to sell more cargoes towards the non-Chinese market. LDPE Offers for LDPE persisted at sustained levels of US$1920/MT in the week of June 30, 2008 despite softer demand from China leading to waning domestic prices. Offers for July from South Korea and Malaysia were heard at US$1950/MT CFR levels, though buying interest was pegged fifty dollars lower. LLDPE LLDPE prices continued at to rise to US$1830/MT in Asia in the week of June 30, 2008, despite soft demand from China. Though demand from China continued to be restrained in line with dipping domestic prices, most sellers maintained their offers. PP Plummeting domestic prices have kept demand from Chinese buyers subdued, softening Polypropylene market sentiments to US$2000/MT in Asia in the week of June 30, 2008. Though most sellers continue to maintain next month offers above US$2000/MT CFR China levels, few deals were concluded below the 2000 mark. In China, domestic prices have dipped further by almost RMB500/MT. PVC Robust feedstock prices have propped up PVC values to US$1250/MT in Asia in the week of June 30, 2008. Key Asian producers have raised CFR China offers for July shipment by about fifty dollars, whilst several deals were concluded at US$1250/MT CFR CMP levels. Sellers are planning another price hike, corresponding to sky high naphtha values. The Chinese buyers are beginning to stock pile, despite obstacles faced by most end-users in passing rising raw material costs in selling prices. GPPS Variation in feedstock prices across different regions has kept market sentiments for GPPS mixed in Asia. GPPS prices stagnated at US$1765/MT in Asia in the week of June 30, 2008 on restrained demand due to weakening feedstock SM market. As domestic prices in China plunged, most buyers were reluctant to buy at the current supplier offers of US$1800/MT CFR China. Demand from other Asian countries has also softened. ABS Lackluster markets have stagnated ABS prices at US$2180/MT in Asia in the week of June 30, 2008. Restricted supplies have kept feedstock butadiene prices at US$3000/MT FOB Korea levels forcing producers in Asia to keep offers above US$2200/MT CFR China. Few deals were concluded as producers in South Korea have been focused on clearing delayed shipment ensuing from a weeklong truckers' strike.