Price trends of oil, polymer feedstock and commodity polymers in Asia for the week of September1, 2008

CRUDE OIL During the week of September 1, 2008, crude oil prices rose after a surprising fall in US crude inventories by 100,000 barrels. Oil prices ended the week by plunging below US$111 a barrel as Hurricane Gustav weakened as it neared Louisiana. Oil prices rose by almost three dollars to US$118 a barrel earlier in the session. A stronger dollar, continuing decline in consumer demand and recent market down trend also helped the decline in oil prices as light, sweet crude for October delivery settled at US$111 levels on Monday. NAPHTHA A twenty dollar dip was affected in naphtha prices in Asia on shrinking downstream demand. Despite naphtha prices falling to US$1015/MT in the week of September 1, 2008, buyers prefer to be on guard and wait and watch before making a buying decision. ETHYLENE Ethylene price in Asia moved up marginally to US$1315/MT on fresh demand from SE Asia, in the week of September 1, 2008. A general price stagnancy has not yet reflected firming outlook of markets of the South East triggered by a supply paucity. Interestingly, despite supply constraints, most buyers in the SE prefer to wait in the sidelines on downbeat downstream Polyethylene and PVC market sentiments. The reluctance to buy spot cargoes was also reflected in the approach of buyers from the Far East. PROPYLENE Strengthened by a revival of demand from China, propylene prices have skyrocketed by over hundred dollars to US$1525/MT in Asia in the week of September 1, 2008. Notwithstanding inadequate downstream polypropylene, ACN and 2-EH demand, offers were hiked to US$1540/MT (US$1600/MT CFR China) after successful conclusion of deals for September shipment at US$1500/MT FOB Korea. FOB Korea buying intentions are currently gauged at US$1520/MT. VCM Dipping values of downstream PVC has exerted pressures on VCM prices in Asia. September shipment VCM prices in Asia have dipped to US$935/MT in the week of September 1, 2008. As PVC price in China's local markets drop, and demand in China continues to weaken, buyers have declined to accept the reduced VCM offers. This reluctance on buyer's part could result in a further drop in VCM values by about thirty-forty dollars. EDC As the PVC and VCM markets of Asia deteriorate and maintain a downbeat market outlook, EDC prices have also weakened to US$470/MT in Asia in this week. Despite a drop in seller's offers, very little interest was expressed from Chinese buyers, who preferred to peg their intentions at about US$450/MT. In view of the current market sentiments, falling ethylene values and weak downstream markets, coupled with falling EDC prices in spot markets of USA, Chinese buyers anticipate a further drop in prices. STYRENE MONOMER Regular demand from Asia has pushed styrene monomer prices up to US$1510/MT in Asia in this week. Feedstock benzene values have also shot up by twenty dollars to US$1200/MT FOB Korea for October shipment. POLYMERS HDPE Buyers from China have been abstaining from buying despite falling offers. This lackluster demand from China has pulled down HDPE prices to US$1730/MT in Asia this week. September shipment deals continue to be concluded for film grade uptil US$1740/MT CFR CMP, despite sellers offers hovering twenty dollars higher. CFR China offers from Taiwan were pegged at US$1765/MT, while those from the Middle East were pegged at US$1730/MT. LDPE Downcast demand from the continent has kept LDPE markets very quiet in this week. LDPE prices have fallen to US$1880/MT in Asia in the week of September 1, 2008, despite restricted availability and relatively high EVA prices. Quotes from South Korean producer heard for September shipment at highs of US$1900/MT CFR China were met with resistance from buyers who seem comfortable at fifty dollar lower bids. As a result, CFR China offers from SE Asia and Middle East dropped to US$1860/MT. LLDPE Akin to LDPE markets, the LLDPE markets have also eased as demand across the continent remains lackluster. LLDPE prices have dropped to US$1740/MT in Asia this week in line with falling HDPE prices Polypropylene A drop in seller's offers have pulled down polypropylene prices. PP prices have had a severe drop of about eighty dollars to US$1680/MT in Asia in the week of September 1, 2008. Deals for South Korean yarn as well as injection grade were concluded at about US$1680/MT CFR China, while most offers from Taiwan were pegged twenty dollars higher. PVC Sluggish demand and bearish market outlook have pulled PVC prices down in Asia this week. PVC prices for September shipment have dropped by about forty dollars to US$1210/MT toward China, but have been met with unenthusiastic buying sentiments from China. This fall in prices from overseas shipment has also pulled down offers of domestic PVC makers in China. GPPS Stability reigned in the GPPS prices of Asia in this week as feedstock SM and benzene rose. GPPS prices steadied at US$1620/MTeven as demand from China continues to be subdued. Pressures to sell have been mounting across Asia, compelling PS sellers to revise prices downwards, despite rising input costs. ABS Persistent lackluster demand from China has kept ABS prices on the decline. September shipment ABS offers have fallen to US$2090/MT in Asia this week in line with falling feedstock butadiene values. In fact, as apprehensions of a further price cut becomes more pronounced, few Chinese traders have dropped offers as low as US$2050/MT, in a bid to clear up stocks. Prices in domestic markets of China are being quoted lower than offers from Asian suppliers, hence the buyers prefer to source material locally.