Price trends of oil, polymer feedstocks and commodity polymers for the week of February 19, 2007

SUMMARY Oil prices continued to remain flat and stagnant due to lack of trading due to lunar holidays in China. Oil could see some weakening in March 2007 due to lower demand on account of onset of warmer weather in USA. Naphtha declined due to lack of demand of its derivatives. Some of the polymer feedstocks such as ethylene, propylene and EDC became weaker while VCM remained flat. Only styrene monomer prices were marginally up. All commodity polymers except ABS remained stagnant. ABS marginally declined in the week of 19th February 2007. In early March 2007, China will restart its working and therefore some price fluctuations are estimated to occur. Oil could remain either flat or decline. Naphtha also could decline due to dull market conditions. All polymer feedstocks except EDC could remain range bound or flat except EDC which is likely to decline in March 2007. LLDPE, HDPE, PP and ABS are likely to become stronger in March 2007, while PVC could remain stagnant. ABS could marginally increase in March 2007 OIL Oil remained practically stagnant around US$59.50-60/barrel in the week of 19th February 2007. Onset of warmer weather exerting lesser demand on oil could marginally reduce the price of oil in the early March 2007. March 2007 could see price of oil remaining range bound between US$58-62/barrel. NAPHTHA After a sharp increase in the price of naphtha in the last few weeks, prices declined to US$564/MT in the week of 19th February 2007 from almost US$600/MT in the week of 12th February 2007 due to lower oil price and weaker demand of naphtha. March 2007 could see either further fall or stagnate in the price of naphtha. POLYMER FEEDSTOCKS ETHYLENE Ethylene price had continued to decline sharply and reached US$1060/MT in the week of 19th February 2007. The fall was due to increased availability. Besides, Japanese suppliers decided to postpone the annual maintenance shut down of a few plants. Ethylene is not likely to go up in March 2007 because of inactive markets in Asia. The price could hover around US$1040-1050/MT in March 2007. PROPYLENE Propylene continued its downward fall due to lack of demand. It reached US$1050/MT in the week of 19th February 2007. March 2007 could remain weaker for propylene with the price ranging between US$1030-1050/MT. EDC The bearish demand of EC derivatives compelled the price of EDC to fall to US$430/MT in the week of 19th February 2007. The customers are only willing to purchase EDC at US$400/M T It is therefore expected that the price could decline further to US$400/MT in March 2007. VCM The lunar holidays in China kept major activity of PVC lack luster. VCM therefore remained stagnant at US$680/MT in the week of 19th February 2007. VCM could continue to remain range bound around US$660-680/MT in March 2007. STYRENE Styrene remained range bound around US$1245-1250/MT mainly due to inactive market scenario. A new movement could be seen in March 2007 after the completion of lunar holidays. However, it is likely to remain stagnant at this level due to wait and watch policy adopted by major customers in Asia. POLYMERS LDPE LDPE price remained quiet at US$1300 in the week of 19th February 2007. The dull market conditions will ensure very little fluctuation in the price of LDPE. Only revival of market after starting of factories after the lunar holidays in China could provide support to the price. March 2007 could see price range of US$1280-1310/MT. LLDPE The lunar holidays in China saved an increase in the price of LLDPE due to supply constraints. The price remained stable at US$1290/MT in the week of 19th February 2007. It is quite possible that the price in March 2007 could increase to US$1320-1330/MT. HDPE HDPE like LLDPE also remained stagnant at US$1285/MT in the week of 19th February 2007 due to inactive market conditions. It is quite possible that like LLDPE HDPE after starting of work from the holidays of lunar holidays in early March 2007 could increase to US$190-1300/MT if not higher. PP PP also was inactive in the week of 19th February 2007 and the price remained flat at US$1265. March could see inching of price of PP by about US$5-10/MT to reach a level of US$1275/MT. PVC PVC like most of the commodity polymer in the week of 19th February 2007 remained dull and flat at US$850/MT. March 2007 offers from suppliers are at US$870/MT but most of the customers are not willing to purchase at this price. It is to be seen whether finally customers accept an increase or the suppliers lower the price to US$850/MT in March 2007. PS The inactive market due to lunar holidays in China reflected no change in the price of GPPS stagnant at US $1380/MT in the week of February 19th 2007. The price is likely to decline some what to US$1360/MT in March 2007. ABS ABS, due to inactive demand declined marginally and remained at US$1580/MT in the week of 19th February 2007. March 2007 witness some revival because presently suppliers are quoting a price of about US$1600/MT for early March supply.