Information
| PP/PE/PS/PVC PRICES ASIA June 29th,2009 |
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Written by bod010
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Tuesday, 04 August 2009 09:01
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Crude oil prices decreased on Friday on a statement by the US government that there was a rise in the US savings rate to the highest level in more than 15 years. This trend signifies that economic recovery in the world’s largest energy consuming country will be very slow. Crude oil prices turned bearish after a statement by the US Commerce Department that household savings rate in the US had risen to 6.9 percent, the highest since December 1993. The data led to speculation that the US economy will continue to go further into recession as consumers stay away from making purchases. There was a fall for the first time in four days in the Standard and Poor’s 500 Index. It fell by 0.2 percent to 918.69. The Dow Jones Industrial Average fell to 8,438.16, a fall of 0.4 percent. The fall in prices was also supported by a rise in unemployment rates in the world’s largest economy. The unemployment rate, which touched a 25 year high of 9.4 percent in May has risen tentatively to 9.6 percent in June, predicted by economists, ahead of the government’s monthly jobs report due to be released next week. Crude prices were also pressured down as the weekly crude inventory report brought out by the US Energy Information Administration (EIA) for the week ended June 19 stated that there was an increase in gasoline inventories by 3.9 million barrels, more than market expectations of an increase of one million barrels. There was a gain in US distillate stocks by 2.1 million barrels, a much larger increase as compared to a forecast of gains of 800,000 barrels. However, there was a drop in crude stockpiles by 3.8 million barrels. Nymex crude futures decreased to trade at USD 69.16/barrel while Barrier fencing mesh Dated Brent spot prices fell to trade at USD 68.29/barrel. WTI Cushing spot prices turned lower to trade at USD 69.16/barrel.Polyethylene
In the downstream markets, prices were steady with HD film prices assessed at the USD 1270/mt CFR Far East Asia levels while LDPE prices were assessed at the USD 1230/mt CFR Far East Asia levels. LLDPE prices were assessed at the USD 1220/mt CFR Far East Asia levels. Triggering the price rise in ethylene was news of unplanned plant trouble in a market already considered to be tight of avails. South Korea’s YNCC on Saturday last week shutdown one of its furnaces for repairs as a result of which run rates at its 550 kt/annum No. 2 cracker were reduced. Following reports of the output cuts, buyer bids for ethylene were seen climbing. With ethylene prices as high as they currently are, production margins have shrunk greatly. Hence ethylene demand from downstream producers of MEG and vinyls is steadily reducing. The only demand seen for ethylene is from makers of PE, where margins continue to remain attractive. If PE buying in Asia slows and if producers of PE respond by slashing ethylene purchases, we will see a rapid downward pressure build on regional spot prices of the feedstock. In South East Asia meanwhile, prices of ethylene were up on account of supply constraints from Iran. National Petrochemical Co of Iran was unable to achieve on spec production at its 1.32 million mt/annum Olefin-10 cracker which in turn delayed loading commitments for Asia. Export offers from Taiwan were also limited as Formosa had fewer parcels available for sale to Asia.LLDPE PRICES IN ASIA EDGE HIGHERLLDPE prices in Asia last week edged higher. Prices gained as buying interest in LLDPE was seen lifting. CFR Far East Asia prices were assessed up at the USD 1210/mt to USD 1220/mt levels as were LLDPE prices on a CFR South East Asia basis. CFR South Asia prices of LLDPE were assessed up at the USD 1240/mt to USD 1250/mt levels. July shipment offers for LLDPE from the Middle East were on offer at the USD 1250/mt CFR China levels and higher. Avails from LLDPE producers in Taiwan for July were nil as they claimed to have sold out for the month. August offers were awaited. LLDPE offers from the US were on offer at the USD 1200/mt to USD 1210/mt CFR China mark. Although there was buying interest at this price, several buyers kept their bids for US material at below the USD 1200/mt CFR mark, given the long sailing time to Asia. Actual users across the region were seen restocking on their LLDPE inventories ahead of the approaching peak season for LLDPE consumption in the region.LDPE PRICES EDGE HIGHER IN ASIALDPE prices edged higher this week in Asia. Are LDPE products—protective sleeves effected by LDPE’s prices? Although demand was nowhere near robust, sellers were able to achieve price increases on the back of tight regional product availability sparked partially by a switch in production to EVA at select Asian LDPE/ EVA swing plants given the higher profitability in production of EVA as that compared to LDPE. Spot prices of EVA were pegged at the USD 1550/mt to USD 1580/mt levels. CFR Far East Asia prices of LDPE were assessed up this week at the USD 1230/mt levels while CFR South East Asia prices were also assessed at the USD 1230/mt levels. Offers on Friday were heard up a the USD 1250/mt to USD 1270/mt CFR China and CFR South East Asia levels. Data made available by the Chinese customs meanwhile showed a fall in monthly LDPE imports in China in the month of May. Imports of LDPE were down 21.66% month on month at 105,181 mt.CHINESE PE MARKET SEES A STEADY UNDERTONE, deer mesh fencing and anti bird netting are all PE products. They are manufactured in one factory in China. Certainly their prices keep steady as PE in China.The PE market of Shantou City in Guangdong province of Southern China witnessed a steady pricing trend. The market prices for LDPE 2426K, 2426H, LLDPE7042, HDPE5502 and 9001 were heard at RMB9750/mt, RMB9700/mt, RMB9700/mt, RMB10850/mt and RMB11100/mt respectively. Average market transactions were observed and a stable pricing undertone was seen in Hangzhou City of Zhejiang province in eastern China. LDPE 2426H, LLDPE 7042, HDPE 5000S, 5502, 5306J and MH602 were quoted at RMB10000-10100/mt, RMB9700-9750/mt, RMB11100-11200/mt, RMB10400/mt, RMB10400-10500/mt and RMB10900-11000/mt respectively. Market offers for PE in the Qilu Chemical city of Shandong province maintained a steady to weak sentiment, according to source. A few traders offloaded their stocks at low prices to book profits. However, a major number of petrochemical producers having contractual cargoes in hand stated that they were not ready to sell cargoes at very low prices. Market offers for LDPE TN26, LLDPE7042 and HDPE 6098 were heard at RMB9700-9750/mt, RMB9450/mt and RMB10800/mt respectively.Polypropylene
Sellers are targeting higher propylene offers going forward as refining margins are weak and crude runs have been slashed. As a result, they expect naphtha production in Asia to reduce. This in turn will curb production of propylene. Therefore sellers are looking to up adjust propylene offers across Asia and believe that they will be supported in their efforts as propylene rates in the west are pegged high thereby lowering arbitrage opportunities to ship western product to Asia. They remain confident as propylene consumption in Asia is quite robust at the moment. Despite producers of 2EH, phenol and ACN, suffering negative production margins, they are operating their plants at high rates and propylene feedstock demand as a result remains healthy. Offers for propylene are currently at the USD 920/mt FOB Korea levels. They plan to increase these by a further USD 20/mt this week. CFR offers to China are at the USD 980/mt levels with bids for propylene at the USD 950/mt CFR mark.PP MARKETS REMAIN STEADY IN CHINAThe PP market of Tianjin port witnessed steady offers while transactions were weak. A general wait and watch trend was being observed by buyers and enquiries were low. A deal for PP products—window screen couldn’t be made eventually because of prices. Market offers for PP T30S and EPS30R were pegged at RMB9500-9600/mt and around RMB10700/mt respectively. Due to a decline in prices in the international crude oil market, enquiry sentiments have scaled down in the PP market of Xiamen City. A source reported that a wait and watch approach has been adopted by downstream plants and concessions were being offered by traders in small margins to boost sales. Imported cargoes of PP yarn grade were pegged at RMB9500/mt. Hardly any transactions were seen in the market. In plant news, a trial run has not yet been successfully carried out at a new 200,000 mt/year PP plant of Yan’An Refinery. A specific date for the startup has not yet been decided. So did our factory. Because there’s no order for turf reinforcement and debris safety netting, that is, on one needs our products, our machine couldn’t run.Polystyrene
The mainstream prices assessed for second-class HIPS were at RMB 9600-9800/mt. Traders slashed their prices in an effort to promote sales in the PS market of southern China. Last weekend, the prices for second-class GPPS closed at RMB 8900-9100/mt in southern China. The low-end prices were for 635 brand from Fujian Fangxing Chemical Co., Ltd., 118 brand from SK Polystyrene (Shantou) Co., Ltd. and 525 brand from Sinopec Guangzhou Petrochemical Co., Ltd.. A source reported that the prices for second-class HIPS were at RMB 9450-9650/mt.PS DEMAND SOFTENS IN ASIADemand for PS was seen softening across Asia this week. A drop in crude prices mid week prompted buyers of GPPS and HIPS to withdraw their inquiries and to retreat to the sidelines. Sellers dropped their offer prices, despite which PS buyers were reluctant to commit to purchases. CFR China prices of GPPS were assessed at the USD 1110/mt levels while CFR South East Asia prices were assessed at the USD 1100/mt to USD 1110/mt levels. HIPS prices were assessed down at the USD 1180/mt CFR China mark while CFR South East Asia prices of HIPS were assessed at the USD 1170/mt to USD 1180/mt levels. A PS seller tried to justify defending his offers firm by citing the high cost of feedstock including ethylene, benzene and SM feedstock at the USD 1020/mt FOB Korea mark. Buyers of PS however were not influenced by this argument and insisted that the current weak demand situation warrants lower PS offers.Poly Vinyl Chloride
CFR Far East Asia prices of EDC were assessed up at the USD 420/mt levels while CFR South East Asia prices of EDC were assessed this week at the USD 425/mt levels. Firm prices of ethylene feedstock coupled with strong VCM values and a spike in prices of downstream PVC, together, supported EDC sellers in their efforts to keep their price targets for Asia firm. For July, EDC offers were heard up at the USD 450/mt CFR levels. VCM prices were assessed at the USD 710/mt CFR Far East Asia and CFR South East Asia levels with Japanese firm Tosoh reported to have set its July offers for VCM at the USD 720/mt CFR China levels.PVC PRICES IN ASIA MARCH HIGHER THIS WEEKPVC prices firmed in Asia this week. Gains came on the back of a tightness in key feedstock availability which allowed sellers to hike their spot offer prices. CFR China prices of PVC were assessed up at the USD 870/mt levels while CFR South East Asia prices of PVC were also assessed up at the USD 870/mt levels. For July, PVC producers were heard targeting hikes of USD 100/mt. This despite the fact that the peak buying season in key markets like China and India had ended. Tight product availability coupled with high input costs were seen keeping the scales tipped in the sellers favour. According to data made available by the Chinese customs, PVC exports to China from the US in May were at 30,359 mt. Total imports in May were 186,790 mt. In plant news, Hanwha Chemical’s 275 kt/annum PVC facility in Ulsan was restarted a fortnight ago on completion of a maintenance turnaround. The producer had limited export availability as it had to first cater to domestic buyer requirements.PVC PRICES MARGINALLY DOWN IN SOUTHERN CHINAA slight decline was seen in market prices for PVC yesterday. At present, dealing prices for low-end resources of PVCNo.5 resin have been brought down to levels of RMB6400/mt (on delivered basis). Price levels of around RMB6450/mt(on delivered basis) was heard for high end resources. According to source, material arriving in the PVC market of Guangdong province has been reportedly imported from countries such as Mexico and Venezuela. These cargoes are selling at around RMB100/mt higher than prices of domestic products, which have affected the regional market to some extent at a time of weak demand. Meanwhile, a few traders were selling imported PVC in the futures markets. The dealing prices for low end resources of PVCNo.5 resin in the PVC market of Jieyang City in Guangdong province were pegged at nearly RMB6350/mt(cargoes to be picked by buyers themselves). A few traders were heard trading at higher prices but deals were hard to conclude. Common imported PVC were pegged at around RMB6500/mt(on delivered basis). Resistance was seen for sales at higher prices.Acrylonitrile Butadiene Styrene
Forward naphtha prices opened softer today morning. The forward naphtha market price indications for the 1st half of August were higher at the USD 608/mt levels while for the 2nd half of August the forward naphtha market price indications were at the USD 602.50/mt levels. For the 1st half of September the forward naphtha market price indications were at the USD 598.50/mt levels.
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