Crude oil prices declined by a sharp 9% in May 12 hit by euro zone crisis and not so good economic data from major oil consuming economies. In China, the manufacturing sector fell more than expected in May, the weakest level this year and down from its 13-month high hit in April. In US, weak job growth added to concerns about slowing economic activity. European manufacturing industries too contracted at a faster pace in three years in France and Germany while it weakened in Italy, Spain and Greece.

European Brent dropped 8.7% in May averaging US$109.88 per barrel. WTI spot too declined 8.9% to US$94.09 per barrel as compared to previous month. In Asian market, crude oil prices was traded at US$105.25 per barrel, whereas, naphtha prices averaged at US$885.68 per metric ton.

Bugged by falling energy complex, ethylene prices plummeted in Asian region coupled with bearish demand across markets. European ethylene too plunged as contract price for June plummeted from May s number. US spot ethylene strengthened due to production issues in the US Gulf Coast region. Paraxylene prices declined in Asia as both upstream feedstock naphtha values declined sharply while downstream demand weakened waiting for prices to fall further. European paraxylene producers were eying the US market as an outlet to offload ample supplies because the Europe-US arbitration was technically open. In turn, the US market was now the highest-pricing region this week. In May 12, ethylene prices averaged at US$1175.25 per metric ton, down 15.5% as compared to previous month. Meanwhile, paraxylene prices dropped 6.9% to 1425.80 per metric ton FOB Korea.

Mono ethylene glycol markets in Asia saw some price recovery helped by production disruptions in the Middle East. MEG markets also received a little boost on news that SABIC had started maintenance at its 700 kt/yr MEG plant ahead of schedule given the operational issues. PTA prices fell in Asia, hit by a gloomy polyester demand outlook and fresh global economic fears. Upstream crude oil posted sharp falls while paraxylene spot values also recorded obvious drops, which means cost support for PTA had weakened. During the month, PTA prices averaged US$1097 per metric ton, FOB Korea.

Polyester filament yarn markets in Asia were weakening and prices declined, both due to easing cost support on one side and poor demand on the other side. In China, polyester filament yarn prices averaged US$2.25 per kg CIF China. Polyester staple fibre markets too kept moving down even faster, triggered by unfavorable news and continuously mute cost support from feedstock. During the month, polyester staple fiber marginally declined and was averaged at US$1.74 per kg.

Benzene prices declined in Asian markets pulled down by falling crude oil prices and eurozone concerns. NWE spot benzene market declined as prices weakened on the back of crude fall and lack of buyers amid more sellers. In South Korea, Benzene was traded at US$1117 per metric ton, FOB.

Caprolactum prices moved down rapidly on weak demand coupled with dropping feedstock market. Trading was thin with insufficient confidence. The slump of caprolactum prices along with cautious buying stance among nylon yarn makers dragged nylon chip prices down. Overall transactions were also thin amid poor demand. Caprolactam prices averaged US$2,488 per metric ton CFR SE Asia. Nylon filament yarn prices were somewhat weighed down by weakness in nylon chip market and cautious purchasing behaviors of downstream segment. In China, nylon filament FDY 70D/24F SD was traded at US$4.25 per kg CIF China.

Propylene prices declined in Asia tracking the fall in crude oil prices amid poor demand. However, the last week was better as falling energy complex did not deter propylene prices from rising on supply concerns. US spot prices fell sharply amid a continued selloff in the olefins market. European propylene spot prices extended its losses as feedstock naphtha headed further south. Acrylonitrile prices dropped significantly across markets due to weak demand.

US acrylonitrile export prices also fell due to sluggish demand. Acrylonitrile was traded at US$2,250 per metric ton CFR China, down 4.26% as compared last month. Acrylic staple fibre markets in Asian were insipid and range-bound. With many turnarounds the cut in supply was offset by thin demand and weaker cost support. In China, acrylic staple fiber traded at US$2.80 per kg CIF China.

Cotton

US cotton futures hit a nearly three-year low on all-around liquidation and weak economic data in the US and China combined with fears of crisis in Europe to deflate the markets. The world economic outlook weakened after news that US employment growth slowed sharply, Chinese factory orders barely grew and European manufacturing fell deeper into crisis.

The Cotlook A index averaged 87.59 cents per pound, down 12% as compared to previous month, while China Cotton Index averaged 19,038 yuan per ton. In Pakistan, KCA spot numbers surged 2.5% to average PakRs.6050 per maund. In India, Shankar-6 was marginally cheaper averaging INR 33,450 per candy, whereas, Bengal Deshi was dearer by 1.3% averaging INR 34,000 per candy.