Price trends of oil, polymer feedstock & commodity polymers in Asia for the week of October 8, 2007

SUMMARY Crude oil prices dipped marginally to US$81 a barrel in New York in the week, due to a stock build up in USA that has eased concerns regarding inadequacy of supplies during peak demand season in winter. Naphtha prices have dipped in line with weakening crude prices and a supply glut into Asia from India. EDC stagnated as downstream VCM and PVC buyers refrained from buying and VCM prices softened on weak PVC demand. Ethylene and propylene prices stagnated due to lack of buying intentions. Styrene prices rose marginally on firming demand. HDPE prices rose on robust demand from non Asian countries, LDPE prices rose on tightening availability, ABS prices climbed along with rising feedstock prices. LLDPE markets stagnated. PVC and PP prices dipped on lack of transactions. CRUDE OIL Crude oil prices slipped marginally to US$81.22 per barrel in New York in the week of Oct 8, 2007. An unexpected increase recorded in oil inventories in USA was responsible for the bearish market sentiments. A stock build up has eased concerns regarding inadequacy of supplies during peak demand season in winter. NAPHTHA Naphtha prices have dropped to US$715/MT in Asia in the week of October 8, 2007. This price dip has been caused by weakening crude oil market and a supply glut in Asia mainly on expectation of increased exports from India into Asia. Traders expect India to continue exporting an average of 700,000-800,000 tons of naphtha a month into Asia, up from less than 500,000 tons a month between January and March EDC EDC markets remained stagnant at US$460/MT in Asia in the week of October 8, 2007. A series of scheduled turnarounds for VCM plants across Asia has been mainly responsible for the declining demand. Declining demand from downstream VCM as well as PVC makers has kept EDC markets lackluster. A difference of 20-25 dollars lingers between the sellers offers and buyers bearish sentiments. VCM VCM prices dipped to US$820/MT in Asia in the week of October 8, 2007 on account of softening demand and lowering prices of downstream PVC. PVC markets were lackluster due to lack of demand from end users. Movement in VCM market was slow due to lack of firm offers from sellers and bids for October shipment. Buying intention has dipped almost 10-15 dollars lower than sellers' price. As the downstream PVC market continues to weaken, VCM prices are expected to fade and drop further in the next few weeks of October 2007. POLYMER FEEDSTOCK ETHYLENE Ethylene prices remained unchanged at US$1180/MT in Asia in the week of October 8, 2007 mainly due to lack of buying intentions. Ethylene markets in Asia remained subdued as buyers remained uncertain about the course that prices would take amid lack of clarity about end users intentions. PROPYLENE Propylene prices remained intact at last weeks' US$1070/MT in Asia in the week of October 8, 2007. This stagnancy crept into the markets as very little activity was seen either from the sellers or buyers. STYRENE MONOMER Styrene Monomer prices saw marginal upward movement to US$1365/MT despite a drop in feedstock benzene prices in Asia in the week of October 8, 2007. Firm demand from buyers helped strengthen SM prices, despite a ten dollar dip in benzene prices. POLYMERS HDPE HDPE prices rose to US$1410/MT in Asia in the week of October 8, 2007, amid firm offers quoted by sellers. This rise in prices was recorded due to strong demand from non Asian countries, despite lack of trading in China. Lower price expectations from buyers in China, even as they return after a week long holiday, could in fact, see a reduction in exports by Asian suppliers to China. LDPE Film LDPE prices rose to US$1580/MT in Asia in the week of October 8, 2007, on raised offers from sellers. Tight availability led to stringent supplies, encouraging sellers to raise their offers. LLDPE Film LLDPE markets stagnated at last weeks' US$1400/MT in Asia in the week of October 8, 2007. This lull in the market prevailed mainly due to lack of firm offers for October shipment from major suppliers. PP Price of polypropylene in Asia dipped to US$1360/MT in the week of October 8, 2007. Low demand due to absence of buying from China last week on account of a seven day holiday has put downward pressure on PP prices. This growing supply from major producers has created an urge in sellers to liquidate cargoes at reduced prices, despite subdued buying interest. Asian PP prices may continue to be under downward pressure on attempts to move deep-sea cargoes from USA toward Asian countries. PVC PVC prices in Asia dipped to US$1020/MT in the week of October 8, 2007 due to quiet market conditions. November offers from PVC producers are expected to open concurrent with the return of the Chinese buyers after the week long National Day holiday. Interestingly, lower offers for November are expected on reduced demand from Chinese buyers for PVC imports on account of softer domestic prices, a drop in feedstock VCM values and weakening buying interest from the Middle East due to the influx of cheap U.S cargoes. GPPS GPPS prices rose marginally to US$1465/MT in Asia in the week of October 8, 2007. Polystyrene prices saw little movement in Asia as the Chinese took a week long break for the National day holiday. ABS ABS prices rose to US$1745/MT in Asia in the week of October 8, 2007. Despite lack of buying from China, sellers' offers were pegged higher, mainly due to rising costs of feedstock butadiene and ACN.