Price trends of oil, polymer feedstock & commodity polymers in Asia for the week of October 29, 2007

SUMMARY Crude oil futures for November delivery closed at a high of US$91 a barrel on the New York Mercantile Exchange. Naphtha prices continue rising in line with robust crude prices. EDC and VCM prices have dipped due to sluggish market movement on downbeat demand from downstream buyers. Ethylene prices dipped as increased supplies from the Middle East is expected to continue. Propylene prices dipped despite limited supplies, and prices did not rise on weak end user demand. Styrene Monomer prices stagnated as downstream demand continues on a subdued note. HDPE, LDPE, LLDPE prices rose on improved market conditions. PP, GPPS, ABS prices stagnated amid subdued demand from China. PVC prices dipped due to persistent dull market outlook and weak demand from China. CRUDE OIL Crude oil futures leapt past US$91 a barrel in New York in the week of October 29, 2007. This spike in prices can be attributed to an unexpected drop in weekly inventory levels in USA, concerns about political tensions in the Middle East and the weakening U.S. dollar. Prices have also found support due to worries about inadequate supplies ahead of the Northern Hemisphere winter, when demand is expected to be stronger. The US has accused Iran's military of supporting terrorism and announced new sanctions on the country that holds the world's second-biggest oil reserves. NAPHTHA Rising in line with runaway crude oil prices, naphtha prices have seen a sharp hike to US$795/MT in Asia in the week of October 29, 2007. FEEDSTOCK EDC EDC prices dipped to US$415/MT in Asia in the week of October 29, 2007, on downbeat demand from downstream VCM and PVC buyers. The dull market sentiments from end users have been coupled with bearish prices of upstream ethylene. A gap of almost twenty dollars exists between buying intention from Chinese vinyl producers and sellers offers at around US$420/MT. VCM Restrained demand from downstream PVC makers has pushed VCM prices down to US$780/MT in Asia in the week of October 29, 2007. Bearish sentiments prevail in the VCM markets, on low buying activity in general along with renewed buying interest in the Far East region at lower levels. ETHYLENE Ethylene prices in Asia dipped to US$1085/MT in the week of October 29, 2007. Ethylene markets in Asia mellowed down last week under the influence of a supply glut from the Middle East. Bearish market sentiments continue in anticipation of continued supply from the Middle East. Also adding to the supply glut woes will be the return of a few crackers in Asia back online after completion of maintenance turnarounds. Asian ethylene prices are expected to see a further downward correction as supply increases in December. PROPYLENE Propylene prices dipped to US$1080/MT in Asia in the week of October 29, 2007. Limited supplies did not boost prices on weak end user demand as buyers preferred to wait and watch. The hesitation on part of the buyers is in anticipation of a clearer picture of the market movement that will influence future pricing. Influx of propylene in the market upon restart of Taiwans' Mailiao and Formosa Plastics Corporation is expected to further push down November prices. STYRENE MONOMER Styrene Monomer prices stagnated in Asia at US$1375/MT in the week of October 29, 2007. Supply remains abundant, while downstream demand continues on a subdued note, widening the gap between supply and demand. This has caused a downward adjustment in prices despite robust international crude oil prices and healthy SM demand in certain pockets of Asia. Feedstock benzene prices dipped marginally to US$1050/MT despite bullish crude oil and naphtha market. POLYMERS HDPE HDPE prices have moved up to US$1420/MT in Asia in the week of October 29, 2007. A recovery in demand from China has improved market conditions, boosting prices for November shipment. LDPE LDPE prices rose to US$1590/MT in Asia in the week of October 29, 2007 on higher quotations issued by suppliers in the face of improving demand. Prices are expected to reign higher in the weeks of November. LLDPE LLDPE prices spiked to US$1400/MT in Asia in the week of October 29, 2007, as markets turned slightly optimistic on improved buyer sentiments. PP Dull market sentiments, particularly from China, have kept the PVC markets lackluster. Prices stagnated at US$1360/MT in Asia in the week of October 29, 2007. Deals were not transacted as a wide gap of almost twenty dollars existed between supplier quotation and buyers intentions. Buyers expect that the supply and demand would be balanced in November, causing no improvement in demand from China. PVC PVC prices saw a dip to US$965/MT in the markets of Asia in the week of October 29, 2007, on strong price resistance from Chinese buyers. Downbeat market sentiments from buyers in China affected trading volumes and kept prices bearish. Prices are expected to dip further in the weeks of November 2007. GPPS GPPS markets remained dull and stabilized at last weeks level of US$1465/MT in Asia in the week of October 29, 2007. Seller offers remained unchanged at last weeks level amid subdued demand from China. Infact, further lowering of buying intention is expected from China as buyers keep in the sideline. However, a further dip in prices does not seem to be on the cards as sellers find it unfeasible to lower offers due to squeezed production margins. ABS Lackluster markets sustained ABS prices at US$1745/MT in Asia in the week of October 29, 2007. Higher crude oil and feedstock prices kept supplier offers high. But buying could not be sustained at this price level and few deals were heard done on limited buying interest from China.