Price trends of oil, polymer feedstock & commodity polymers in Asia for the week of December 31, 2007

SUMMARY Oil prices have moved up to US$96 a barrel on fears of a possible economic slowdown in US and supply disruptions in OPEC nations. Naphtha rose in line with rising crude values. EDC and VCM prices picked up as PVC demand strengthened. Ethylene and propylene prices moved northwards on account of limited supplies. Styrene Monomer prices dipped as downstream PS markets remained subdued. Polyethylenes moved up on tight supplies, while polypropylene moved in tandem with rising propylene prices. PVC rose on revival of buying interest in the region. ABS markets dipped on lower buying interest. OIL Oil prices in Asia moved up to US$96 a barrel in electronic trading on the New York Mercantile Exchange. Prices have been hovering at this level, affected by dual factors of fears of a possible economic slowdown in the world's largest consumer of oil products on one hand and supply disruptions from the Middle East due to geo political reasons on the other hand. Supply hitches keep oil prices high, on worries that oil shipments from the region will be reduced or halted. NAPHTHA Naphtha prices rose in line with rising crude oil prices in the week of Dec 31, 2007. Naphtha prices rose to levels of US$870/MT and could see an upward movement in the next few weeks of January 2008. POLYMER FEEDSTOCKS EDC EDC was up marginally to US$400/MT in the week of December 31, 2007 in Asia. The main culprit for the rise is a stronger VCM and PVC market. As PVC market picks up, EDC could firm up in the next few weeks. VCM VCM gained strength on stronger demand from PVC makers, rising marginally to US$760/MT in Asia in the week of December 31, 2007. ETHYLENE Ethylene prices gained strength, rising to US$1290/MT in Asia in the week of December 31, 2007, on account of restricted supplies. PROPYLENE Propylene price firmed up to US$1170/MT in the week of Dec 31, 2007 in Asia, due to limited supply and could possibly go up marginally due to eagerness of buyers to build up inventories. An unplanned outage last month at Mitsubishi's No. 2 cracker in Kashima has affected supply. Supply will determine the price of propylene in the remaining days of January 2008. STYRENE MONOMER Styrene Monomer markets remained subdued at US$1310/MT for the week ending December 31, 2007 in Asia, due to quiet demand from downstream users. Prices dipped by about fifteen dollars despite a gain in upstream benzene prices. POLYMERS HDPE HDPE prices strengthened to US$1590/MT on account of limited supplies across the region in the week of December 31, 2007 in Asia. The supply situation will determine the price of HDPE in the remaining days of January 2008. LDPE LDPE prices moved up by ten dollars to US$1665/MT in Asia in the week of December 31, 2007, as suppliers hiked offers. LLDPE LLDPE, like LDPE spiked up, but by a larger amount to US$1570/MT in Asia in the week of December 31, 2007, mainly due to a tight supply situation. PP Polypropylene market moved up marginally to US$1460/MT, in the week of Dec 31, 2007 in Asia; as the rising price of propylene eventually caught up with downstream values. PVC A revival of buying interest in the region kept PVC prices higher at US$1000/MT in Asia in the week of December 31, 2007. Coupled with rising price of VCM price, PVC prices could go up further in the remaining weeks of January 2008. GPPS GPPS market was lackluster after the holiday season on subdued demand from buyers. GPPS price slipped to US$1420/MT in Asia in the week of December 31, 2007. The price of GPPS would remain stagnant in the coming few weeks on uncertainty of demand from China ahead of the Lunar New Year Holidays. ABS The holiday season helped ABS to remain quiet at US$1755/MT in the week of December 31, 2007. Buyers were not willing to purchase ABS at a higher price while the suppliers were not willing to offer it at a lower price.