Price trends of oil, polymer feedstock and commodity polymers in Asia for the week of September 29, 2008

CRUDE OIL Crude oil prices jumped up to US$108 per barrel in New York for November delivery, and to US$104.6 in London in the week of September 29, 2008. This rise was triggered in anticipation that a US$700 bln financial bailout plan will be adopted by the Congress. Also contributing to the rise was release of a report showing a drop in US gasoline supplies to the lowest level in 41 years, a decline in the US dollar and declining oil inventories in the face of deteriorating demand. The week ended with the markets in a state of frenzy as crude oil has sunk by 10% when the US House of Representatives rejected a US$700 bln government bailout of the financial sector. This fresh move has raised concerns of further economic turbulence in the world's largest economy, that could significantly dampen global oil demand. This, combined with the deteriorating outlook for European economies, has further fueled concerns over the energy demand outlook. NAPHTHA Naphtha price have dipped below US$800/MT in Asia in the week of September 29, 2008. Demand has deteriorated from downstream ethylene and propylene markets as China prepares to go on its week long National Day holiday. ETHYLENE Ethylene prices have dipped by a hundred dollars, sinking below US$1000/MT in Asia in the week of September 29, 2008. Buyers in Asia's largest market - China have abstained from buying prior to their week long National Day holiday. PROPYLENE Propylene prices have dipped below US$1100/MT in Asia in the week of September 29, 2008, in the absence of buyers' demand. Demand could pick up when the Chinese come back from their week long holiday. STYRENE MONOMER Markets have been quiet as China prepares to go on its week long National Day holiday. Styrene Monomer prices have dipped in the week of September 29, 2008 in Asia to hover around US$1300/MT. In response to deteriorating SM demand, upstream benzene producers are also reducing operating rates. Japan Energy Corp. plans to reduce runs at benzene plants in Chita and Kashima by 10-20% on waning demand and meager profit margin realization. South Korea's Yeochon Naphtha Cracking Centre (YNCC) plans to reduce by 10%, run rates at three of its BTX plants in Yeosu. VCM VCM prices have had a marginal fall below US$800/MT CFR China in the week of September 29, 2008, on weak downstream demand, particularly from China. EDC EDC prices have fallen to US$400/MT in the week of September 29, 2008 on restrained demand from buyers along with ample supplies in the region. Despite lowered offers, sellers continue to face dampened buying on subdued VCM and PVC markets. EDC prices are estimated to fall further, in line with falling feedstock costs. POLYMERS HDPE Wilting under pressure from deficient demand from China, HDPE prices for October shipment have dipped below US$1500/MT in Asia in the week of September 29, 2008. CFR China deals for October were concluded at the 1500 mark in response to supplier offers ranging at US$1500-1550/MT. In fact, a few cargoes from Malaysia were heard liquidated at US$1450/MT CFR China, and negotiations were on for South Korean material being offered at US$1475/MT. LDPE LDPE prices have dipped to US$1670/MT in Asia in the week of September 29, 2008, on lackluster demand from China at the onset of a week-long holiday. October shipment CFR China prices dropped lower than US$1700, with few quotes slipping to US$1650/MT. Buyers from China, however, have expressed an interest in buying at lower levels. LLDPE LLDPE prices dropped to US$1500/MT in Asia in the week of September 29, 2008. A persistent drop was witnessed in LLDPE prices, as demand from China was very meager. October LLDPE offers from Singapore were heard ranging from US$1500-1550/MT CFR China, and from Taiwan at around US$1550/MT. Few deals were heard concluded at US$1450/mt CFR China. POLYPROPYLENE Polypropylene prices in Asia for this week have dipped to hover around US$1370/MT. Offers have also receded, falling to 6 month lows on lackluster buying from China. Very few deals were heard concluded as the Chinese embark on their week long holiday. POLY VINYL CHLORIDE Weaker buying intentions and falling domestic prices in China continue to pull prices down. PVC prices in Asia have dipped to US$1025/MT in Asia in the week of September 29, 2008. In line with overseas prices, price of PVC for export in China also plunged by about 30-40 dollars from US$930/MT. Despite an attempt by Asian makers to keep prices above the thousand dollar mark, offers were heard at around US$975/MT CFR CMP. Despite these lowered offers, buyers seem to be less interested. GPPS Volatile crude oil and dipping feedstock SM prices, along with subdued demand from China have pulled down GPPS prices in Asia to less than US$1520/MT in the week of September 29, 2008. ABS Deteriorating buying interest prevails in ABS markets of Asia on declining oil and feedstock costs. Offers from a South Korean producer were heard at a marginal rebound, triggered by positive aspects such as need to build up inventories at the onset of the National Day holiday of China. However, very few deals were heard concluded as most buyers have stock piled, while others prefer to have a hand to mouth survival.