Price trends of oil, polymer feedstocks & commodity polymers for the week of 16th July 2007

SUMMARY Oil prices surged to their highest levels since August 11, 2006 to US$74 due to diminishing North Sea Brent oil production on account of a pipeline shutdown and maintenance work. Naphtha increased in line with strong crude prices. Ethylene and propylene also increased corresponding to an increase in the price of oil. EDC and VCM market remained stagnant. Styrene monomer (SM) rose marginally. Market for LLDPE remained stagnant, while HDPE and LDPE rose. PP market witnessed some upward movement. PVC, GPPS and ABS prices also recorded upward movement. July 2007 is expected to show higher price of oil. Consequently all feedstock & commodity polymers could go up in prices. CRUDE OIL Crude oil prices continued on their uptrend as they hovered around US$74 in the week of 16th July 2007. Futures prices closed at their highest since Aug 11, 2006 at US$73.93 a barrel on the New York Mercantile Exchange. This rise continues in the face of rising U.S. gasoline inventories on account of diminishing North Sea Brent oil production due to a pipeline shutdown and maintenance work. NAPHTHA Asian naphtha market remained firm on the back of strong crude oil prices, rising to levels above US$710/mt in the week of 16th July 2007. POLYMER FEEDSTOCKS ETHYLENE Stringent supplies affected a surge in prices of ethylene to US$1120-1130/MT in the Far East region in the week of 16th July 2007. In sharp contrast was the market scenario in South East Asia that remained subdued at last weeks levels of US$1060/MT on the arrival of cargoes from the Middle East region. PROPYLENE A supply cut from major Asian producers has kept prices at a firm level of US$1030/MT in the week of 16th July 2007. Prices are expected to remain firm for most part of July 2007. Styrene Monomer (SM) Styrene prices rose marginally in the week of 16th July 2007 to US$1400/MT. Steady upstream benzene market coupled with robust buying interest has led to activity in the market for styrene. VCM A lull in downstream PVC markets has caused VCM prices to stagnate at last weeks' price level of around US$820/MT in the week of 16th July 2007. This dip indicates lean transactions in the VCM market. Improving market for downstream PVC will see prices for VCM rise by US$30-40/MT in the next month. EDC Stability reigned in EDC prices at last weeks' price level of around US$440/MT in the week of 16th July 2007. Improving market for downstream PVC will see prices for VCM rise by US$20-30/MT in the next month. POLYMERS LDPE Despite a sluggish market for LDPE, prices rose to US$1470/MT in the week of 16th July 2007, due to restricted supply. Prices are expected to rise by US$30-40 in the month of August 2007 as supply restriction continues. LLDPE LLDPE remained a laggard in the week of July 16th 2007 as prices maintained at US$1380/MT. Buying interest was seen lower than seller's price indication. Prices are expected to rise marginally in the month of August 2007. HDPE An uptake in global demand for HDPE has led to ten dollar increase in price, pushing up prices to US$1390/MT in the week of 16th July 2007. A price hike is being mulled by producers on account of ongoing strong global demand for HDPE. Prices are expected to rise by US$25-40 in the month of August 2007. PP Stringent supply has helped PP rise to levels of US$1370-1375/MT in the week of 16th July 2007. Though transactions remained thin, prices are expected to be in a higher price range of US$131380-1395/MT in the month of August 2007. PVC PVC prices have risen to US$990-1000/MT in the week of 16th July 2007 on account of stringent supplies along with upbeat demand. Prices are expected to rise by US$20-25 in the month of August 2007, on the back of healthy demand. GPPS GPPS prices rose to US$1490/MT in the week of 16th July 2007. A rise in price of feedstock Styrene Monomer has firmed up offers for GPPS by US$10-15/Mt in the week. ABS Producers hiked offers for ABS to US$1680/MT corresponding with better market conditions in the week of 16th July 2007. Rising cost of feedstock materials SM and CAN could keep ABS prices in a higher price bracket for the month of August 2007.