SUMMARY
Crude oil futures for November delivery closed for the week at US$88.60 a barrel on the New York Mercantile Exchange, after rising above US$90 a barrel this week for the first time. Naphtha prices continue rising in line with robust crude prices.
EDC and VCM prices have dipped due to sluggish market movement. Ethylene prices dipped on anticipation of escalating supplies from the Middle East and Far East region. Propylene prices have stagnated as buyers and traders both retreated to the sidelines to wait for a clearer picture of market movement. Styrene Monomer prices rose marginally on rising feedstock prices.
Markets for all the polymers stagnated at last weeks' levels, generally because of price expectations lower than supplier quotes. PVC prices dipped due to persistent dull market outlook and weak demand from China.
CRUDE OIL

Crude oil futures for November delivery closed for the week at US$88.60 a barrel on the New York Mercantile Exchange. This dip has been affected by signs that inventories in USA were sufficient to meet demand - 7.8% higher than the 5 year average for the period. Earlier this week, prices rose above US$90 a barrel for the first time, mainly due to a falling dollar and concerns of a possible attack by Turkey on the Kurdish rebels in Iraq, which has the world's third-biggest oil reserves.
NAPHTHA

Naphtha prices rose to US$770/MT in Asia, in line with rising crude oil prices in the week of October 22, 2007. Return of Formosa to the markets, after a three month break on account of maintenance shutdowns, has supplemented demand, bolstering the naphtha markets of Asia.
FEEDSTOCK
VCM

VCM prices dipped to US$790/MT in Asia in the week of October 22, 2007 on slow market movements. Few transactions were heard as downstream PVC buyers resisted strong prices. PVC demand in China as well as other markets globally, remained weak. A 40-50 dollar difference was maintained between supplier offers and buying intentions, mainly on bearish demand from China. On the supply side, spiking crude oil prices continue to exert price pressures on the Japanese producers, rendering a price dip almost unfeasible.
EDC

Sluggish markets with bearish demand caused EDC prices to dip to US$425/MT in Asia in the week of October 22, 2007. EDC market has been influenced by slow sales of downstream VCM and PVC markets, and has no takers despite the current low price levels. Infact, dull demand from China is estimated to have a further influence on EDC prices, forcing them further southwards in the next month. This anticipation of low prices has made the EDC market a laggard as buyers prefer to adopt a wait-and-watch strategy at the moment.
ETHYLENE

Ethylene prices in Asia plummeted to US$1095/MT in the week of October 22, 2007. Anticipation of escalating supplies from the Middle East and Far East region has been mainly responsible for this sharp drop. Current offers from sellers seem to be lowering in anticipation of a further price drop in November, when prices are expected to take a sharp turn southwards on increased supplies.
On the supply side, Formosa plans to restart its 900,000 tpa no.2 cracker by second week of November, followed by the start up of Taiwan's CPC's 230,000 tpa no.3 cracker. South Korean producers are also expected to restart crackers shortly after completion of annual turnarounds. All these start ups will cause a supply glut.
Europe has had tighter ethylene supplies on account of planned turnaround outages at several cracking plants in November this year, leading to an influx of material from the Middle East. Iran, Qatar and Saudi Arabia are exporting almost half their output to Europe on account of better price realization.
PROPYLENE

Propylene markets lacked movement and stagnated at US$1090/MT in Asia in the week of October 22, 2007. Sellers expect to sell material at least twenty dollars higher than current market prices, resulting in no deals being transacted. Buyers and traders both retreated to the sidelines to wait for a clearer picture of market movement. South Korea's Hyosung Corporation plans to shut down its exchanger unit for a 25-day turnaround in H2- November; resulting in a possible reduction in supply in the region.
STYRENE MONOMER

Styrene Monomer prices rose to US$1380/MT in Asia in the week of October 22, 2007. This hike was affected mostly by strong gains of almost fifty dollars in upstream benzene values. Benzene prices rose in line with bullish crude oil prices.
POLYMERS
HDPE

Listless HDPE markets stagnated at US$1410/MT in Asia in the week of October 22, 2007. The dullness was a result of a price gap between selling intentions and buyers' bids.
LDPE

LDPE prices sustained at US$1580/MT in Asia in the week on October 22, 2007. The markets were faced with restricted supplies, which, however, did not result in price hikes, as major suppliers have closed October deals, leading to very few firm offers.
LLDPE

LLDPE markets were lackluster and stagnated at US$1385/MT in Asia in the week of October 22, 2007. The markets were stable amid thin transaction due to lack of firm offers.
PP

Polypropylene prices remained flat at US$1360/MT in Asia in the week of October 22, 2007. Stagnancy prevailed in the markets, despite last weeks' feedstock propylene price rebound, mainly because buyers from China, with price expectations at least twenty dollars lower than supplier quotes, adopted a wait and watch policy.
PVC

PVC prices in Asia dipped to US$970/MT in the week of October 22, 2007, resulting from slow buyer demand. Lower offers were heard from Taiwanese producers, but their Japanese counterparts did not budge from above the US$1000/MT mark as they try to bear the backlash of sharply rising crude oil and naphtha values.
Downcast demand from China will lead to further downward movement in prices for the next few weeks of October.
GPPS

Downcast demand from the Chinese buyers has rendered a stagnancy in the polystyrene markets in Asia. Prices stagnated at US$1465/MT in the week of October 22, 2007, as the buyers did not step out of the sidelines and preferred to wait and watch. Buying intentions were pegged atleast twenty dollars lower than offers from producers in Korea and Taiwan. Rising upstream benzene and SM prices have rendered a price drop unfeasible for polystyrene manufacturers.
ABS

Markets for ABS in Asia stood at last weeks' US$1745/MT in the week of October 22, 2007, because of a tussle between buyers and sellers. Backed by high oil and feedstock prices, supplier offers continued at levels higher than buying intentions. Upstream butadiene, ACN and SM prices continue to remain strong in Asia.
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