Price trends of oil, polymer feedstock & commodity polymers in Asia for the week of October 1, 2007

SUMMARY Crude oil prices spiked past US$83 in New York in the week. This spike was caused by a weakening US dollar. Naphtha prices did not show much movement despite runaway crude prices. EDC stagnated as Chinese buyers refrained from buying and VCM prices softened on weak demand from China as well as bearish downstream demand. Ethylene, propylene and styrene prices dropped on account of weaker demand from downstream markets. LDPE, LLDPE and PVC markets stagnated on refrained buying particularly from China, HDPE, PVC and GPPS prices dropped as markets adopted a wait and watch policy. ABS prices climbed along with rising feedstock prices. CRUDE OIL Crude oil prices spiked past US$83 in New York in the week of October 1, 2007. This spike was caused by a weakening US dollar. The week saw oil prices spike by over two dollars after the dollar fell to a sixth straight record low against the euro. The sliding US dollar drew investors to commodities as alternative investments. Adding to this was the concern that hurricanes may cut production in the Gulf of Mexico and hamper efforts to prepare fuel stockpiles for peak winter demand. NAPHTHA Naphtha prices in Asia remained stable at US$725/MT in the week of October 1, 2007. The absence of market requirement from China from the last week due to a weeklong holiday maintained the price almost stagnant. POLYMER FEEDSTOCKS EDC Market for EDC remained stagnant at US$460/MT in Asia in the week of October 1, 2007. EDC market of Asia maintained a stable note due to weaker market conditions prevalent globally. The suppliers wish to achieve higher prices but the users are unwilling to buy at these prices. Chinese buyers refrained from buying as they embark on their week long holiday. Subdued demand prevailed in the Far East, mainly due to the shutdown of VCM plants. Japan's Tosoh Corporation, on account of plant closure, will not purchase EDC till the beginning of next month. VCM VCM prices softened to US$830/MT in Asia in the week of October 1, 2007, mainly because of weak demand from China. The absence of market requirement from China due to a weeklong holiday affected this drop. Tough price opposition from the bearish PVC producers of China has kept VCM markets slack this week. However, VCM prices in Southeast Asia saw an uptrend on account of tight supply. ETHYLENE Ethylene prices dipped to US$1180/MT in Asia in the week of October 1, 2007. Increasing supply weighed down by inadequate demand from end users, particularly China, kept ethylene prices in Asia depressed in this week. PROPYLENE Propylene prices dropped by ten dollars in Asia in the week of October 1, 2007, to US$1070/MT as weak sentiments were witnessed in the propylene market due to lack of market requirement from Asia's major buyer China. STYRENE MONOMER Styrene monomer prices dipped to US$1360/MT in Asia in the week of October 1, 2007. Maoming Petrochemical Co. Ltd.'s 100000 tpa SM plant has come back on stream after a maintenance turnaround in which the company lost about 3,000-3,500 tons of SM output. Sinopec Guangzhou Petrochemical General Work plans to shut down its 80,000 tpa SM plant for replacement of catalyzer, expectedly after the end of the week long holiday on Oct 9th, for twenty days. In a bid to accumulate SM inventory to feed its downstream PS plant during the downtime the company suspended external sales this week. POLYMERS HDPE HDPE prices dropped to US$1400/MT in Asia in the week of October 1, 2007, on account of limited deals. Buyers from Asia, particularly China, preferred to wait and watch in anticipation of price revision and the onset of the week long holiday. However, quiet market conditions in Asia have not succeeded in lowering HDPE prices mainly because of strong demand from non-Asian countries. LDPE Stability reigned in the LDPE markets in Asia in the week of October 1, 2007. Prices stagnated at US$1560/MT in Asia due to low buying activity from China. Awaiting offers from the producers, buyers prefer to wait and watch in anticipation of downward price revision. A dip in LDPE prices is expected on the back of seasonally slow demand in Asia. LLDPE LLDPE markets remained lackluster, particularly on low market movement from China. LLDPE prices stagnated at US$1400/MT in Asia in the week of October 1, 2007. Buyers prefer to be in the sidelines in anticipation of downward price revision. LLDPE prices are estimated to drop on the back of seasonally slow demand in Asia. PP PP markets saw a price dip in Asia in the week of October 1, 2007 to US$1370-1360/MT levels. Lackluster buying from China kept the market conditions damp. PVC PVC prices remained stagnant at US$1030/MT in Asia in the week of October 1, 2007. Demand slackened from China as it prepares for a weeklong National Day holiday. Sellers could face higher price pressure ahead of upcoming low demand season. Buyers have adopted a wait-and-watch policy in anticipation of lower market prices in October. GPPS GPPS prices dropped to US$1460/MT in Asia in the week of October 1, 2007. Thin trading levels and weak buying sentiments from China kept prices under check. Buyers from China adopted a wait and watch policy as they embarked upon their week long holiday. ABS ABS prices firmed up to US$1740/MT in Asia in the week of October 1, 2007, in line with another gain of feedstock ACN and butadiene costs. Ongoing robust feedstock prices have led to strong prices in the Asian markets. Reports of deficient inventories in China project a rise in demand from the Chinese buyers after the week long holiday.