Price trends of oil, polymer feedstocks and commodity polymers for the week of 26th March 2007

SUMMARY Oil flared up significantly in the week 26th March 2007 due to increased inventory build up in USA and commencement of geo political tensions between Iran and UK. Naphtha reflected the price increase of oil. All polymer feedstocks with the expectation of VCM remained flat. All commodity polymers with exception of PVC also remained stagnant or soft. Higher price of oil is bound to increase the price of feedstocks and all the commodity polymers in the coming weeks. OIL Oil rose very sharply to reach about US$63/barrel in the week of 26th March 2007. One of the prime reasons for this stupendous rise is increased output of US refiners in a bid to build up an inventory for the upcoming summer where fuel demand will increase during vacation time. The OPEC countries arrived a decision to maintain production level last week. The indications are that oil prices will go up further and could reach even US$70/barrel. NAPHTHA An increase in price of oil was reflected in the increase in the price of naphtha to US$632/MT in the week of 26th March 2007. Higher price of naphtha cannot be ruled out in early April because of high price of oil that is likely to happen. POLYMER FEEDSTOCKS ETHYLENE Ethylene price continued to slide downwards despite an increase in prices of oil as well as of naphtha. It reached US$900/MT in the week of 26th March 2007, a steep decline which is difficult to explain. Perhaps the price would go up in the next few days or weeks due to higher oil and naphtha prices. PROPYLENE Propylene, like ethylene also remained lower than ethylene, but did not fall as steeply as ethylene. It declined by US$10/MT and reached US$1100/MT in the week of 26th March 2007. A decline in price of PP as well as softer ethylene could have driven the price decline of propylene. Eventually, propylene will also reflect the increase in the price of oil and naphtha. It is quite possible that the price would go up in the next week. EDC Despite firm prices of VCM and PVC due to stronger demand, EDC remained stagnant at US$410/MT in the week of 26th March 2007. VCM VCM price firmed up and reached US$700/MT in the week of 26th March 2007 due to stronger demand of PVC in Asia. It is likely to go up in the next few weeks due to stronger price of oil and naphtha. STYRENE Styrene remained stable at the same price of US$1245/MT despite an increase in both oil and naphtha price. A slight decline in benzene price could have influenced this price trend but it is not expected to remain stagnant. It will increase inevitably in the coming few weeks due to over all increase in the price of oil and naphtha. POLYMERS LDPE LDPE continued to remain stable at US$1330-1340/MT in the week of 26th March 2007 possible because of lack of demand from China since the agriculture season is now over. It is likely to go up eventually in the coming weeks due to over all increase in the price of oil. LLDPE LLDPE like LDPE also remained stagnant at US$1300-1310/MT in the week of 26th March 2007 due to subdued demand in China. It is expected to go up in the next few weeks due to higher price of oil. HDPE HDPE remained almost stable at US$1280/MT due to higher inventories in China leading to no purchase. However, eventually price rise can not be ruled out in the coming few weeks due to higher price of oil. PP PP price remained stagnant in the range of US$1260-1270/MT in week of 26th March 2007. The price of PP will reflect an increase in the price of oil very soon. PVC PVC price hardened due to continued stronger demand in China and reached US$900/MT in the week of 26th March 2007. It will increase further and could reach US$930/MT in the coming few weeks. PS The continued lackluster demand helped in maintaining the price at about US$1390-1400/MT in the week of 26th March 2007. It is bound to go up due to higher price of oil and naphtha. The price could remain flatter around US$1400/MT in the coming few weeks. ABS ABS like GPPS also remained subdued at US$1580-1590/MT in the week of 26th March 2007. It is expected to remain flat in the coming few weeks due to lackluster market conditions.