Crude oil prices hit a 26-month high at over US$ 92 a barrel this week-end, closing 2010 up 15% on expectations that the economic recovery will drive demand growth next year and push prices into triple digits. Strong growth from Asia, especially China, and a rebound in demand from recovering economies elsewhere fueled a four-month rally that knocked crude over the US$ 70-80 range it held for much of the year. Many experts opine that oil may break US$ 100 a barrel in 2011, while they don't expect a surge to levels near US$ 150 seen in 2008. If prices explode the OPEC would step in to cool off markets. In 2010, oil production jumped 2.2 million barrels per day (bpd), the biggest increase since 2004, and another healthy 1.5 million bpd gain is forecast for 2011. On the New York Mercantile Exchange, oil futures surged to a 2010 high, settling at US$ 91.38 a barrel, after touching US$ 92.06, the highest level since October 2008. The settlement marked the largest end-year price since 2007. London Brent gained settled at US$ 94.75 a barrel, its highest end-December settlement since 2007 and up nearly 22 percent on the year.
Polyester Chain: PSF-PFY prices up
Polyester feedstock, ethylene prices were on the uptrend in Asian and European markets while they sobered in USA as Shell decided to lift its force majeure on US ethylene on 1 January, after cracker restart. Paraxylene prices too were up marginally in Asia while they weakened in Europe. Supply is expected to remain tight due to upcoming turnarounds amidst modest demand. However, with the year coming to a close, activities were low and price discussions were limited due to upcoming New Year holidays. MEG markets in Asia saw some upward corrections as crude and ethylene prices up trended. PTA markets were also amidst upward corrections in Asia with prices rising US$ 20-30 on support of inching up paraxylene prices amidst tight supply and over uptrend in the energy complex. Polyester chip markets were backed by higher contract settlement spurred firm sentiment of PTA futures. Asian polyester filament yarn markets were stable after rising sharply earlier in the week. In China, markets trended up given strong impetus and producers continued to raise their offers. In India, prices rolled over previous week’s numbers while in Pakistan, DTY prices dropped in some categories. Prices in Indonesia/Malaysia markets were also up. Polyester staple fibre markets in Asia sustained last week’s good sentiment and producers actively raised prices amidst sound liquidity.
Nylon Chain: Cost pressure increases
Benzene prices were up across Asia, Europe and USA backed by rising crude values and tightening of supplies amidst expected rise in demand in Q1 of 2011. The European January benzene contract was up Euro149 a ton while producers in USA sought US cents 72 increase in January benzene contract numbers. As feedstock benzene values firmed up, Asian caprolactum markets witnessed sellers hiking offers, pushing up spot numbers. Asian supplies are expected to tighten due to a 2-day shutdown of DSM Nanjing’s unit in January and a 5-day turnaround at Ube (Thailand) in January. However, downstream demand had weakened, and the operating rates are likely to fall as Spring Festival will follow New Year holidays in China. The cost pressure on nylon chips producers increased and they resorted to cutting operating rates to push up prices. However, buying interest of downstream converters was weak and buyers mostly replenished in small volume. Nylon filament yarn prices continued to remain firm, but cost pressure increased as caprolactum and nylon chip producers raised their offers. However, NFY producers were opera