Price trends of oil, polymer feedstocks & commodity polymers for the week of 11th June 2007

SUMMARY Oil due to fear of slowing of global economy & increase in the interest rates has slightly weakened & reached US $ 64.75/barrel in the week of 11th June 2007. Naphtha declined due to softening of oil. EDC was the only one feedstock that was rather stagnant. All other feedstocks with the exception of VCM declined or weakened. VCM gained smartly due to rise in the global demand of PVC. All PE polymers marginally increased in the prices but not due to demand rise but due to tighter supplies. PP on the other hand rose due to strong demand. PVC remained strong due to stronger demand globally. On the other hand both styrenics (GPPS & ABS) remained lack luster & stagnant. Future prices particularly in July 2007 are likely to remain firm or stronger. Oil & naphtha are likely to remain range bound. All olefin monomers are likely to remain static or marginally move upwards. EDC & VCM could rise due to downstream products demand. Styrene monomer is likely to remain range bound. PP & PVC are likely to remain stronger in July compared to the other commodity polymers. The other commodity polymers will remain stagnant or lackluster in July 2007. OIL The slowing of economy in USA in particular & in general globally in 2007 has given some relief to oil consumers. Oil marginally declined to US $ 64.75/barell in the week of 11th June 2007. However, it does not look to slide down steeply. It could remain around US $ 63-67/barrel in the remaining weeks of June 2007 & possibly in July 2007. NAPHTHA The softening of oil price also contributed to decline in the price of naphtha from US $ 685/MT to about US $ 683-684/MT. Apparently the derivative market of naphtha are doing well. It is therefore expected that naphtha would not slide down significantly. It is expected that the price of naphtha in the remaining weeks of June 2007 & July 2007 could be around US $ 680-685/MT. POLYMER FEEDSTOCKS ETHYLENE The weaker demand from Asian region & softening of oil led to decline in the price of ethylene to US $ 1100-1120/MT in the week of 11th June 2007. Ethylene price linked with the price of oil & also overall demand in the World could remain around US $ 1125/MT in July 2007. PROPYLENE The weaker market conditions & softening of oil & naphtha caused some decline in the price of propylene in the week of 11th June 2007. It reached US $ 1010/MT. Propylene is likely to stay at around US $ 1020-1040/MT in the next two months. EDC It seems that EDC has been stabilized at US $ 410-420/MT in the week of 11th June 2007. No much movement is expected from this price in the remaining weeks of June 2007/ July 2007 could see the price of US $ 430-440/MT due to rising demand of EDC derivatives particularly that of PVC. VCM VCM due to stronger demand of PVC increased to reach US $ 770/MT in the week of 11th June 2007. While the purchase interest appears to be at about US $ 800/MT the suppliers are interested to achieve almost US $ 830-840/MT in the later part of June 2007 & if not feasible definitely by July 2007. STYRENE MONOMER (SM) SM declined to US $ 1360/MT mainly due to weaker demand not only of its derivatives but that of all aromatics in Asia. For July the future quotation indicates that SM will remain around US $ 1320-1340/MT. POLYMERS LDPE While the demand of LDPE looked little dull or quiet, the tight supply resulted in a marginal rise of LDPE to US $ 1410/MT in the week of 11th June 2007. July future appears to show that the price could go up to US & 1430-1450/MT in July 2007. LLDPE While Asian market seems to show a sign of weakening, tighter supply & limited offer from suppliers have raised the price of LLDPE marginally to reach 1330/MT in the week of 11th June 2007. All indications show a likely increase in the price of LLDPE to reach a level of US $ 1350-1370/MT in July 2007. HDPE All PE types are adversely affected in price due to weaker supply or tighter supply & unwillingness of the suppliers to offer larger supplies. However, the demand does not remain as strong as it was a few weeks back. The price however increased slightly to reach US $ 1340-1350/MT in the week of 11th June 2007. July 2007 will witness the price to remain around US $ 1360-1380/MT. PP PP price shot up due to bullish demand in Asia although propylene became softer. PP gained & reached a level of US $ 1320-1330/MT in the week of 11th June 2007. July 2007 could witness the firmer price. It could be in the range of US $ 1340-1360/MT. PVC A strong demand from China propelled an increase in the price of PVC to US $ 970/MT in the week of 11th June 2007. However, the other Asian regions remained rather lackluster. The global demand seems to be picking up sharply. PVC is therefore expected to be very strong in the next two months. It is believed that PVC could go up by about US 100/MT higher in July 2007. Anyway the price of US $ 1030-1050/MT can not be ruled out. GPPS While SM declined rather sharply, GPPS remained inactive & remained rather static at US $ 1480/MT in the week of 11th June 2007. It is expected that GPPS would reach US $ 1480-1490/MT possibly in the remaining weeks of June 2007 & not reached it definitely will reach in July 2007. ABS The decline in SM & butadiene did not reduce the price of ABS. It continued to remain at US $ 1700/MT in the week of 11th June 2007. Most of the customers are adopting the policy of wait & watch because of overall decline of the aromatic markets. It is expected that ABS would remain range bound around US $ 1700-1720/MT in July 2007.