Price trends of oil, polymer feedstocks and commodity polymers for the week of 9th April 2007

SUMMARY Oil declined slightly and reached US$64.30/barrel in the week of 9th April 2007. It is likely to remain in the range of US$64-65/barrel in the coming few weeks. Naphtha increased during the week of 9th April. It led to an increase in styrene monomer and therefore of GPPS and ABS polymers. Ethylene and propylene were softer in the week of 9th April 2007. EDC showed some weakness in the price, but VCM increased due to insufficient supplies because of plant maintenance of the Asian producers. All polyolefins with the exception of LDPE showed some hardening. LDPE remained quieter at the same price level. While both GPPS and ABS got slightly stronger due to feedstock prices, PVC was stable. Next few weeks will continue in uncertainty since the demand of polymers does not seem to be reviving. Only increase in feedstock prices would make the commodity polymers to rise at the cost of unhappiness of plastic processors. OIL Oil, after rising for the last two weeks slipped to US$64.30/barrel in the week of 9th April 2007. It will continue to be in the range of US$63-65/barrel in the coming few weeks. However, the uncertainty is likely to persist. NAPHTHA Further increase in price of naphtha reflected a revival of its derivative market. A decline in oil price could not nullify the increase in price of naphtha. It reached US$685-687/MT in the week of 9th April 2007. It will continue to remain bullish for the next few weeks. POLYMER FEEDSTOCKS ETHYLENE The large availability of ethylene along with bearish market trends of ethylene derivatives reflected in a decline in the price of ethylene. It reached US$830/MT in the week of 9th April 2007. It will continue to remain dull due to reluctance of customers to absorb higher prices. Some softness in oil price also would help in some decline in the price of ethylene. PROPYLENE Propylene also faced bearish market conditions and declined to US$1060/MT in the week of 9th April 2007. The customers are expecting the price to remain soft due to some weakness in oil price and therefore are willing to wait and watch how the price moves southwards. EDC EDC showed a slight decrease in the price of EDC to reach US$400-410/MT in the week of 9th April 2007. Lack luster business in VCM and softness in ethylene resulted in the decline. It is likely to trade at about the same price in the coming few weeks. VCM VCM price remained stable at US$720-730/MT in the week of 9th April 2007. The tighter supply situation continues due to further maintenance shutdown in Asia. A decline in EDC did not affect the price of VCM. The Chinese customers are not willing to pay a higher price. PVC scene appears to be losing steam. VCM is likely to remain range bound around US$730/MT in the coming few weeks. STYRENE Styrene marginally increased to reach US$1275-1280/MT in the week of 9th April 2007. Styrene is likely to remain range bound around US$1280/MT in the coming few weeks. POLYMERS LDPE LDPE remained flat at US$1350/MT in the week of 9th April 2007. Chinese market does not seem to revive. LDPE is likely to remain stagnant or could go up by about US$10/MT and reach US$1360/MT in the coming few weeks and possibly in May 2007. LLDPE LLDPE is gaining some momentum and showing a rise to some extent. For the week of 9th April 2007 it reached about US$1280/MT. LLDPE due to some revival of demand could remain harder in the coming few weeks. HDPE HDPE increased to US$1280-1290/MT in the week of 9th April 2007 due to firmer market conditions in China. It will continue to remain range bound around US$1290-1300/MT in the coming few weeks and possibly in early May 2007. PP PP started showing some hardening due to increase in prices in China. It reached US$1260-1270/MT in the week of 9th April 2007. It is not certain whether PP will continue its movement upwards in the coming few weeks. PVC PVC continued to remain quieter. Its price hovered around US$1285-1290/MT in the week of 9th April 2007. However, PVC scenario does not seem very bullish. It is therefore expected that PVC will continue to remain stable at this price level in the coming few weeks. PS GPPS again rose due to an increase in naphtha and benzene prices and reached about US$1400/MT in the week of 9th April 2007. It is likely to remain bullish to some extent until May 2007. ABS Further increase took place due to increase in feedstocks and naphtha. It reached US$1600/MT in the week of 9th April 2007. It is likely to hover around US$1590-1600/Mt in May 2007.