Price trends of oil, polymer feedstocks and commodity polymers for the week of 18th June 2007

Oil prices increased sharply to US$ 68/barrel, due to higher demand in USA on account of onslaught of summer and inability of US refineries to meet the higher demand. Naphtha declined on account of weaker market conditions of its derivatives. Olefin feedstocks, (both ethylene and propylene) declined despite an increase in the price of oil. Propylene prices ebbed to a nine month low. EDC and VCM, on account of stronger global demand of PVC, rose; but styrene monomer remained stagnant. Only LLDPE among all PE polymers gained slightly. All other PE polymers remained stagnant and dull. PP also remained firm. PVC continued to remain strong due to stronger demand globally. On the other hand, both styrenics (GPPS and ABS) remained lackluster. In fact, ABS declined slightly. July 2007 is expected to show higher price of oil. Consequently all feedstock and commodity polymers could go up in prices. However, PVC is the only commodity polymer that is likely to remain strongest in July 2007 due to stronger demand. All other commodity polymers are expected to show lackluster performance OIL Oil rose quite sharply and reached US$68/barrel in the week of 18th June 2007. The main reason was that the US refineries are not capable of meeting increased supply demand in USA that conventionally rises in summer, until August end. It is therefore expected that the price of oil would remain in a higher range of US$66-70/barrel in the coming few weeks and July 2007. NAPHTHA Naphtha declined further and dipped to US$670-672/MT in the week of 18th June 2007, mainly due to subdued demand - despite high oil prices. For July 2007, naphtha is expected to remain around US$675-680/MT. POLYMER FEEDSTOCKS ETHYLENE Despite an increase in oil price, ethylene declined slightly to US$1100/MT in the week of 18th June 2007. For July 2007, ethylene price is likely to move in the range of 1100-1120/MT. PROPYLENE Propylene, due to subdued demand of its derivatives, remained slightly weaker at US$1000-1010/MT in the week of 18th June 2007. This possibly is the lowest price observed in the last several months - after September 2006. July 2007 is anticipated to witness similar price of propylene due to weaker demand. It is expected that the price of propylene would remain range bound around US$1000-1025/MT until end of July 2007. EDC EDC, on account of stronger demand of PVC has moved upwards marginally and reached US$420-425/MT in the week of 18th June 2007. It is likely to remain at higher level of US$425-440/MT in the next 2 months. VCM Despite stronger market conditions of PVC, VCM moved in a narrow range of US$800-810/MT in the week of 18th June 2007. The suppliers are interested in achieving the price realization of US$825-850/MT in July 2007. STYRENE MONOMER (SM) SM remained quiet at US$1380/MT mainly due to weaker market conditions. For July the future quotation indicates that SM will remain around US$1320-1340/MT. POLYMERS LDPE LDPE remained in a narrow range of US$1410-1420/MT in the week of 18th June 2007. Prices are predicted to be higher at US$1430-1460/MT for July. LLDPE LLDPE showed some movement upward and reached US$1340-1350/MT in the week of 18th June 2007. The supply situation has not improved yet. July 2007 could witness a price band of US$1370-1380/MT. HDPE HDPE also remained static at US$1340-1350/MT in the week of 18th June 2007. July 2007 could see a price range of US$1360-1380/MT. PP PP remained firm, but its price hovered around US$1320-1330/MT in the week of 18th June 2007. July 2007 could witness a rise in the price. It could be in the range of US$1340-1360/MT. PVC US$980/MT in the week of 18th June 2007. A stronger global demand could keep price of PVC higher and possibly beyond US$1000 very soon. July 2007 could witness the price in the range of US 1025-1050/MT GPPS GPPS has remained quiet due to subdued market conditions. The price remained around US$1500/MT in the week of 18th June 2007. It is expected that GPPS would remain at US$1500-1520/MT possibly in the remaining weeks of June 2007 and in July 2007. ABS ABS marginally reduced and reached US$1680-1690/MT in the week of 18th June 2007. July 2007 could continue to keep the price in the range of US$1700-1710/MT.