POLYMERS
By the middle of the week of May 24, 2010, sellers began to reveal their sell ideas for PE products to Southeast Asia with decreases for June, in line with expectations. Amid falling crude oil prices, Asian petrochemical prices have plunged partly due to destocking activities. The declines are likely to continue due to high inventory levels amid lackluster market sentiments. Concerns are mounting in Asia over Europe’s debt crisis that has resulted in austerity measures, which could continue, threatening to restrict exports from Asia to Europe. These worries brought demand to a standstill. High levels of inventory abound in the polyethylene market with PetroChina and Sinopec currently holding a total of 750,000 tons. Fearing a repeat of the 2008 crisis scenario, when polyolefin prices had a US$100-200/ton weekly decline, traders are currently rushing to liquidate cargoes (mostly of Middle East origin), even at a loss.
HDPE 
HDPE prices have fallen below US$1200/MT in Asia in the week of May 24, 2010 amid lackluster demand and bearish market outlook. Despite offers at such low offers, demand continues to be subdued, and deal conclusion has been sporadic. Iranian film-grade is being offered by Chinese sellers at US$1170-1180/ton CFR China for prompt lifting at the bonded warehouse. Offers for Southeast Asian origins were also lower by US$40-50/ton. Buy interest has been reported even lower, showing a gap between buyers interest and sellers offers. Buy idea for HDPE film has been heard US$180-200/ton below the new prices for Southeast Asian origin material.
LDPE
LDPE prices have fallen below US$1400/MT in Asia in the week of May 24, 2010 as markets await deal conclusion amid slothful buying interest. For LDPE film, a Middle East offer was received with an US$80/ton decrease and from Indonesia, the decrease amount on a sell idea was at $50/ton. A trader, meanwhile, gave a sell idea for Iranian origin which was US$20-50/ton lower for materials sitting in their bonded warehouse in China as demand is rather slow both in China and Southeast Asia. Traders prefer to deplete inventories instead of buying any more material.
LLDPE
LLDPE prices have fallen to US$1285/MT in Asia in the week of May 24, 2010 as the markets await deal conclusion. For LLDPE film, sell ideas and offers were down US$40-70/ton, and down US$70-100/ton for sell ideas to India. A trader offering Iranian origin reduced his sell idea by US$40-70/ton, while Middle Eastern producers decreased prices by US$50-60/ton, and from Indonesia a sell idea was down US$70/ton. Producers are not under too much pressure to sell LLDPE because of limited inventory, but the market sentiment continues to be bearish.
POLYPROPYLENE
Polypropylene prices have fallen below US$1300/MT in Asia in the week of May 24, 2010 amid weak demand and falling propylene values. The lackluster sentiments and pessimistic outlook have been triggered by sharply lower oil prices, amid concerns of Europe’s sovereign debt crisis, its contagion, especially to the US banking system, that has raised concerns of a repeat of the global recession of 2008-2009. These worries brought demand to a standstill. Uncertain global consumer confidence is expected to erode factory orders for finished goods made in Asia, leading to a lull in demand, prompting destocking amongst buyers. As PP is the largest derivative sector for propylene, a prolonged squeeze on PP margins has the potential to spark a fresh round of production cuts, and a price slash was imminent to prevent propylene stocks from building too quickly.
Source : plastemart
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