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ICIS Forecasting Launches Asian Benzene-Styrene-Polystyrene-Expandable Polystyrene Monthly Report

2007-01-17 16:32 1341

Monthly Service Blends Three Innovative Modeling Techniques to Deliver Industry's Most Frequent, Precise Price Forecast

SINGAPORE, Jan. 17 /Xinhua-PRNewswire/ -- ICIS, the world's leading information provider to the chemical and oil industry, today announced the launch of a price forecast report for the Benzene-Styrene-Polystyrene-EPS product chain covering the Asia market. This is the second Asian product chain included in ICIS forecasting.

"Due to continuing market volatility, there is a strong demand for price forecasting of the Benzene-Styrene-Polystyrene-EPS product chain in the petrochemical industry," said Allison Farone, ICIS Vice President - Americas. "This specific monthly edition of ICIS forecasting will help traders and purchasers minimize the risk in their decisions regarding this Asian market."

Benzene is a primary raw material in the production of styrene, phenol, cyclohexane and other chemicals. Styrene is predominantly used in polystyrene (PS), which is produced in general purpose (GPPS), high impact (HIPS) and expandable polystyrene (EPS) grades. Polystyrene is used in a variety of consumer and commercial products with major application in domestic appliances, construction, electronics, toys and food packaging. EPS is divided into two grades, block and packaging. Block material is primarily used in heat and sound isolation for buildings, siding and exterior wall sheathing. Packaging material is used in disposable containers and packaging of sensitive equipment.

ICIS forecasting will report on Benzene FOB Korea, Styrene China CFR, GPPS CFR Hong Kong, HIPS CFR Hong Kong, and EPS Packaging Grade CFR China.

The Asian benzene market has been hallmarked by volatility, thus creating a demand for monthly forecasts, with spot values fluctuating in a yawning $600/tonne gap over the past 2 years of trade at $600-1,200/tonne FOB Korea. Prices have hinged on Asia's growing benzene demand that rides on the continued health of the downstream styrene and phenol industries. Aside from factors directly influencing supply and demand like start-ups and shutdowns in aromatics and downstream facilities, market players have paid close attention to US benzene prices for Asia-US arbitrage opportunities. Seasonal variables in the US, like driving season demand and the hurricane season have held considerable sway over the Asian spot benzene market. Toluene, another aromatic that has seen volatile trade, is a feedstock that has been contributing to about 30% of Asian supplies. Toluene and crude fluctuations upstream have added an added layer of complexity towards benzene price forecasting.

"ICIS forecasting monthly reports enable industry suppliers, manufacturers, and other stakeholders to more accurately forecast their investments," Farone added. "We are excited to launch a service that will support smart business decisions."

Continuing volatility of petrochemical prices throughout the past years has exposed the weakness in current forecasting methodologies and highlighted the need for a scientific rather than experiential approach to forecasting. Scientific models create consistency, precision and eliminate reliance on the judgment of key individuals. ICIS forecasting's three modeling techniques are:

1. ICIS Market Sentiment Index:

A breakthrough in price forecasting, the innovative ICIS Market Sentiment Index identifies events (e.g., plant closings, product shortages) previously reported by ICIS that impact the behavior of market participants (in terms of supply, demand and price). In short, it establishes the quantitative relationship between a combination of multiple events and market reaction to those events.

The Market Sentiment Index quantifies the combination of inflationary and deflationary news stories reported by ICIS and expresses them as a number. This number is positive in months where more inflationary than deflationary events have occurred; it is negative where the combination of events is likely to have a deflationary impact on sentiment.

2. Time Series:

Time series modeling analyzes patterns in historic prices and is particularly useful in short-term forecasts.

3. Multivariate:

Multivariate pricing identifies relationships between prices and other variables, including consumer and industrial indicators and trade and price data.

ICIS forecasting's methodology forecasts prices by incorporating the output of the index in the forecasting model of each feedstock product (e.g., Benzene, Styrene, and Polystyrene). The price generated by incorporating the Market Sentiment Index is provided separately in the monthly report.

ICIS forecasting is completely independent from ICIS price reporting and is based on statistical analysis of historical assessments plus textual analysis of news files.

ICIS forecasting was developed in partnership with BMG DecisionCraft, a consulting firm that uses advanced analytical tools to help companies increase profitability and manage risk. Co-based in London and India, BMG DecisionCraft clients include one of North America's largest car manufacturers, one of the United Kingdom's largest lenders and one of Europe's leading private equity funds. Principals in London include Mark Giles, managing director, and Dr. Stephen Price, director. Principals in India include Dr. P.R. Shukla, co-founder of the Ahmedabad management school, Dr. Nilotpal Chakrvarti, head of the Modeling Laboratory at Ahmedabad (India's leading management school), and Dr. Pankaj Chandra, head of Supply Chain Analytics at Ahmedabad.

A free sample of ICIS forecasting can be obtained at http://www.icis.com/forecasting .

Notes to Editors:

ICIS forecasting ( http://www.icis.com/forecasting ) is part of ICIS, the world's leading information provider for the chemical and oil industry. ICIS operates with a team of more than 170 people in key markets around the world. For more information about ICIS products and services, please visit http://www.icis.com .

Reed Business Information

ICIS is part of Reed Business Information (RBI), a division of Reed Business and a member of Reed Elsevier plc, the world's leading publisher and information provider. RBI publishes more than 100 market leading publications, directories and online services, and organizes many industry conferences and awards. The RBI portfolio includes Computer Weekly, Caterer & Hotelkeeper, Commercial Motor, Community Care, Estates Gazette, Farmers Weekly, Flight International, New Scientist, Travel Weekly, Totaljobs.com, Caterer.com, CWJobs, Estates Gazette Interactive (EGi), ATI (Air Transport Intelligence), ICIS, Kellysearch, Kompass UK, and Bankers' Almanac. For a full listing visit http://www.reedbusiness.co.uk .

For more information, contact:

Allison Farone

ICIS

3730 Kirby Drive, Suite 1030

Houston, TX 77098

Tel: +1-713-525-2618

Fax: +1-713-525-2659

Email: allison.farone@icis.com

Source: ICIS Forecasting
Keywords: Oil/Energy
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