Information
| PP/PE/PS/PVC PRICES ASIA June 15th,2009 |
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Written by bod010
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Tuesday, 04 August 2009 08:28
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Crude oil prices fell on Friday for the first time in four days on reports of a contraction in industrial production in Europe and a rise in the value of the US dollar. Crude oil prices turned slightly bearish as a report indicated that as compared to 2008, there was a decline of 21.6 percent in industrial production in the euro region in 2009. As per the statistics office of the European Union, this is the biggest plunge in the industrial production in the 16 member euro region since the start of the data series in 1986. A fall in production levels in the euro region is an indication of the fact that recessionary trends have not ebbed fully and this may have an impact on demand for commodities like crude. The fall in prices was also supported by the strengthening of the US dollar. The US greenback gained 0.7 percent to USD 1.4017 per euro from USD 1.4108 per euro yesterday. A rise in the US dollar diminishes the appeal of dollar denominated commodities like crude as an investment option, sending price levels down. Nymex crude futures decreased to trade at USD 72.04/barrel while Dated Brent spot prices fell to trade at USD 70.84/barrel. WTI Cushing spot prices turned lower to trade at USD 72.04/barrel.Polyethylene
Traders expect ethylene prices to cross the USD 900/mt CFR levels within June. So do sellers of anti bird netting. Although margins of most ethylene derivatives will be squeezed at these high price levels, PE producers will continue to enjoy good margins given the current rising prices of HDPE, LLDPE and LDPE. With regional demand for PE healthy, buying volumes in ethylene are currently on the rise. In the downstream markets, HDPE film prices were assessed on Thursday at the USD 1235/mt CFR Far East Asia levels. LDPE prices were assessed at the USD 1190/mt CFR Far East Asia levels while LLDPE prices were assessed at the USD 1175/mt CFR Far East Asia levels. Propylene prices in Asia also climbed with FOB Korea rates up at the USD 830/mt mark. PP raffia and PP injection prices were assessed at the USD 1085/mt CFR Far East Asia levels with seller offers pegged at above the USD 1100/mt CFR mark.PE PRICES IN CHINA FIRM UPIn China’s domestic markets, PE prices were seen climbing. Offers were on the modest increase in the PE market of Guangzhou City in Guangdong province of southern China following price hikes accounted by PetroChina and Sinopec. LLDPE 7042 and LDPE 2426H were quoting up at RMB 9550/mt and RMB 9650/mt respectively. Fuelling the price rise were higher prices of crude, naphtha and ethylene feedstock. The market prices for PE edged up modestly in Shantou City of southern China’s Guangdong province. LDPE 2426K was priced at RMB 9700/mt. LLDPE 7042 from Sinopec Guangzhou Petrochemical Co., Ltd. was quoted at RMB 9700/mt. Following the ex-warehouse price hikes by PetroChina, traders in the PE market of Xiamen City in Fujian province followed suit in succession and market prices were quoted slightly higher. In consideration of rising costs, even traders were unwilling to sell PE cargoes at low prices. Yes, this situation always makes traders unhappy, just as Gallen Net only have to keep the prices of pea & bean net and pallet net wrap. A source reported that the market prices for LDPE 2426H and LLDPE 7042 were at RMB 9750-9800/mt and RMB 9700-9750/mt respectively.Polypropylene
Fob Korea prices of propylene on Friday last week were assessed up at the USD 840/mt levels with bids pegged at above the USD 850/mt FOB levels. CFR China prices were assessed at the USD 900/mt mark. For PP producers the margins remained lucrative and demand was therefore robust. However it was noted that even for derivative producers working with negative cash margins, including ACN makers, buying interest for propylene feedstock did not slow, as producers had pre-sold their cargoes and hence had to keep their output high in order to cater to these orders. These were brought by the market of plastic net bags and window screen. In the downstream markets, PP injection and PP raffia prices were assessed up last Friday at the USD 1090/mt CFR Far East Asia levels with offers on Monday morning pegged firm at above the USD 1100/mt CFR mark.PROPYLENE AND PP PRICES IN ASIA EDGE HIGHERA steady lift in demand for downstream PP coupled with gains in global crude and Asian naphtha rates, prompted sellers of propylene in Asia to hike their prices on Wednesday. Since production margins continued to remain lucrative, propylene buyers did not resist the price gains as rates on Wednesday were assessed up at the USD 820/mt FOB Korea levels. Good situation for sale of protective sleeve. PP raffia prices meanwhile were assessed up on Wednesday at the USD 1075/mt to USD 1085/mt CFR Far East Asia levels while PP injection prices were also assessed up at the USD 1075/mt to USD 1085/mt levels. Offers on Thursday were higher at above the USD 1100/mt CFR mark.PP OFFERS IN CHINA BOLSTER HIGHERTraders raised their PP offers in the markets of Guangzhou City in Guangdong province of southern China last Friday following price surges in international crude oil prices, higher naphtha and propylene values, price hikes by PetroChina’s southern China sales branch and availability constraints in the region. Market players were more confident in future pricing trends and PP T30S and EPS30R were up at RMB 9700-9750/mt and RMB 10250/mt respectively. Following the ex-warehouse price hikes by PetroChina, the market prices for PP were bolstered up in Chengdu City of Southwest China. PP T30S from PetroChina was quoted at RMB9800/mt. Traders were unwilling to sell cargoes at low prices and rejected bids which did not match their offer targets. In Jiangsu province of eastern China, the PP market saw offers raised across the board in line with price surges in global crude prices. Also supporting gains were higher prices of naphtha and propylene feedstock. A source reported that PP yarn grade T30S was on offer at RMB 9900/mt.Polystyrene
Higher global crude prices, strength in naphtha rates, firmer ethylene values and bullish benzene feedstock prices supported sellers in their efforts to steer their offers higher. Also helping prop up SM were gains recorded last week in downstream PS and ABS prices. SM export avails from South Korea, Japan and from Taiwan were reduced last week as domestic demand was robust. This situation along with ongoing plant turnarounds including at Taiwan’s FCFC and China’s Shanghai Secco, constrained supplies and pressured prices higher. In China, SM inventories were down last week at the 50,000 mt levels. A lift in demand for PS and ABS helped keep buying activity in SM active through last week.SM PRICES IN CHINA PEGGED FIRMSM prices in China quoted firm, bullish on the back of strength in upstream energy, naphtha, ethylene and benzene feedstock rates. In eastern China’s Jiangsu province, traders with SM stock on hand were upbeat about future trends. Offers for SM were at RMB 8300/mt (Zhangjiagang, ex-tank). However buyers were reluctant to pay these high rates, despite gains recorded in downstream PS and ABS market prices. The mainstream price talks were held at RMB 8200-8250/mt (Zhangjiagang, ex-tank). A source meanwhile informed the polymerupdate team that the 500 kt/yr SM plant of Shanghai Secco Petrochemical Co., Ltd. was closed for a turnaround and capacity expansion since May 16th. The work was expected to last 75 days or so. Its upstream ethylene-cracking unit was brought down on May 19th this year and capacity expansion work at the facility was also underway during the same period. The company has already accomplished the contractual delivery for May SM cargoes. However, the contracts for June and July SM deliveries have been cancelled.GPPS AND HIPS PRICES IN ASIA BOLSTER HIGHERPolystyrene (PS) prices raced higher in Asia this week. Strength in prices of crude, bullish naphtha values, a steep spike in prices of upstream ethylene, firmer benzene and a surge in SM feedstock numbers together supported PS producers in their efforts to hike their offer rates. GPPS prices were assessed up this week at the USD 1090/mt CFR China mark, a gain of USD 60/mt from the previous weeks assessed levels. CFR South East Asia prices of GPPS were assessed at the USD 1080/mt levels. HIPS prices were assessed at the USD 1190/mt CFR China and CFR South East Asia levels. With ethylene at the USD 850/mt CFR Asia mark and higher, with benzene up at the USD 785/mt to USD 790/mt FOB Korea mark and with SM feedstock prices at the USD 1035/mt to USD 1040/mt FOB Korea levels, PS sellers remained bullish in their near term outlook. Many turned active in their purchases, afraid to delay buying as they were convinced that prices hereon were bound to further climb.Poly Vinyl Chloride
In China, PVC prices were assessed at the USD 800/mt CFR levels, a gain of USD 20/mt from the previous weeks assessed price levels. In South East Asia prices were also assessed at the USD 800/mt CFR levels. With prices of ethylene up at the USD 850/mt CFR levels and with VCM at the USD 700/mt mark, July offers were up at above the USD 850/mt CFR China levels on Friday. Asian availability of PVC remains tight and exhausted inventories need to be replenished. There has been talk in the markets that demand for ethylene based PVC in China will slowdown as the price gap between carbide based PVC and ethylene based PVC has been widening. However, there are no signs of sellers relenting to any pressures thus far as bids at below the USD 850/mt CFR mark are being brushed off. In fact anyone delaying purchasing will likely end up paying a price near the USD 900/mt CFR within a fortnight.GAINS REPORTED IN PVC PRICES IN CHINAPrices of PVC in the markets of Hangzhou City in Zhejiang province of eastern China kept on inching higher. Low-priced cargoes were impossible to find prompting buyers in need of product to increase their bids. This helped boost seller confidence and prices were seen firming. Supporting the price gains was strength in upstream product values coupled with reports of gains in PVC prices in the rest of Asia. The mainstream dealing prices for PVC No.5 resin were at RMB 6500-6550/mt in the regional market of Hangzhou. The dealing prices for some individual high-end resources or small orders were pegged at around RMB 6600/mt (on a delivered basis). In Shantou City of southern China’s Guangdong province, the market prices for PVC edged up. The mainstream dealing prices for PVC No.5 resin were at RMB 6450-6500/mt (cargoes to be picked up by buyers themselves). According to source, offers for some high-end individual resources were heard at RMB 50/mt higher.Acrylonitrile Butadiene Styrene
Forward naphtha prices opened steady today morning. The forward naphtha market price indications for the 2nd half of July were at the USD 616.50/mt levels while for the 1st half of August the forward naphtha market price indications were at the USD 614/mt levels. For the 2nd half of August the forward naphtha market price indications were at the USD 612.50/mt levels.
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