Price Trends of Oil, Polymer Feedstock and Commodity Polymers in Asia
Jun 24, 2009
CRUDE OIL
Crude oil prices dipped by over a dollar to US$71 per barrel in the week of June 22, 2009. Weak fuel demand despite data indicating a recovery in the global economy has kept crude oil pegged at US$71 per barrel. This marks a stop to four consecutive weeks of oil price hike. The weakening dollar has made oil an attractive option for investors, pushing up oil prices as they buy contracts as an inflation hedge to offset a decline in the dollar. Players anticipate a further fall in oil prices this week on speculation that US fuel stockpiles will increase due to weakening demand and gas supplies will increase on augmented refinery output and imports gain. Gasoline inventories rose 3.39 mln barrels to 205 mln in the week, the biggest increase since January, as daily demand for fuels is pegged 6% lower than last year.
NAPHTHA
Naphtha prices have increased to US$620/MT in Asia in the week of June 22, 2009. Naphtha prices were supported by robust downstream demand, and have moved up despite a dip in oil prices. Open spec naphtha for H2 delivery for July closed at US$620/MT CFR Japan levels. The price hike can be attributed to a tight naphtha supply situation despite increased run rates in Northeast Asian plants, mainly because of drastically reduced volumes of exports from the West. Western exports for July arrival are less than 150,000 tons, as compared to 800,000 tons in May.
ETHYLENE
Under the dual influence of restricted supplies in the region and increasing derivative polyethylene prices, ethylene prices have increased to US$865/MT in Asia in the week of June 22, 2009. Key producers in Far East Asia and Iran have reduced supplies, while their Chinese counterparts have reduced run rates. As downstream demand continues to be robust and the market outlook continues to be optimistic, seller's offers have increased to US$900/MT.
PROPYLENE
Propylene prices have increased to US$875/MT in Asia in the week of June 22, 2009 as supplies continue to be restricted in the region. FOB Korea offers have been heard at an elevated level of US$900/MT.
STYRENE MONOMER
Styrene Monomer prices for July shipment have dipped to US$1025/MT in Asia in the week of June 22, 2009. As crude values have seen a change in direction, sellers preferred to wait and watch in anticipation of a price revision. Few offers heard at US$1030/MT levels have met with low response due to a dearth of buying bids in anticipation of further price correction. Feedstock benzene has increased by ten dollar to US$790/MT despite falling crude values amid a dearth of deal conclusion.
POLYMERS
HDPE
Persistently rising ethylene prices have propped up HDPE prices to US$1255/MT in Asia in the week of June 22, 2009. Several typical CFR China offers for July shipment increased to US$1260/MT for film grade, with deal conclusion about ten dollars lower. Offers for film grade from South Korea and Thailand continue to hover around US$1260/MT. Deep-sea cargoes of blow molding grades are being offered at US$1160-1175/MT. The market could witness a supply glut from Petro Rabigh's 300,000 tpa HDPE plant by end of month.
LDPE
Robust demand continues to push up LDPE prices, elevating them to US$1215/MT in Asia in the week of June 22, 2009. July shipment offers increased to levels of US$1240/MT CFR China. Deal conclusion by sellers from South Korea as well as Middle East was about ten dollars lower.
LLDPE
Healthy demand from processors has pushed up LLDPE prices to US$1201/MT in Asia in the week of June 22, 2009. After successful conclusion of deals above the 1200 dollar mark, offers were hiked to US$1235/MT level.
POLYPROPYLENE
Upward moving propylene prices have pushed up polypropylene prices to US$1100/MT in Asia in the week of June 22, 2009. CFR China offers for July shipment for yarn/injection grades increased to levels of US$1125-1145/MT, while block copolymer is being quoted about 30-40 dollars higher, homopolymers are being offered at US$1155/MT
POLYVINYL CHLORIDE
A bullish trend amid increased feedstock costs pushed up Polyvinyl Chloride prices in Asia to US$845/MT in the week of June 22, 2009. Very few offers for July were heard in the region. A producer in Taiwan has increased July shipment CFR offers to US$850/MT, July offers from the Middle East increased to hover below the 900 dollar mark. FOB offers from domestic players in China were also heard at an up-revised level of US$825/MT.
ABS
July shipment ABS prices have increased to US$1405/MT in Asia in the week of June 23, 2009 on persistently robust sentiments and corresponding with increases is cost of feedstock SM, butadiene and ACN. After successful conclusion of deals at these levels, offers have been hiked by an additional 25-40 dollars by sellers from Taiwan and South Korea.
