Asia Light Olefins Monthly

Jinsu Yim (Olefins, Asia) [email protected] +(65) 6501-1535Samuel Liew (Olefins, Asia) [email protected] +(65) 6501-1534Aaron Cheong (Olefins, Asia) [email protected] +(65) 6501-1518Kelly Lu (Client Services) [email protected] +(65) 6501-1510Vince Sinclair (Styrenics, Asia) [email protected] +(65) 6501-1537Ashish Pujari (MEG, Asia) [email protected] +(65) 6501-1540Eddie Kok (Vinyls, Asia) [email protected] +(65) 6501-1536N. Ravivenkatesh (Purvin & Gertz, Asia Naphtha) [email protected] +(65) 6227-2758

20 McCallum Street # 17-01Tokio Marine Centre

Singapore 069046Telephone: (65) 6226-5363

Fax: (65) 6226-5157

www.cmaiglobal.com

ASIAN MARKET REPORTLIGHT OLEFINS

November 10, 2011 / Issue No. 047

This report is for the exclusive use of the client company. Distribution outside of the client company is strictly prohibited without the prior written consent of Chemical Market Associates, Inc. (CMAI).

©Copyright CMAI 2011. All Rights Reserved. 2011

The prices presented herein are strictly the opinion of CMAI and are based on information collected within the public sector and on assessments by CMAI staff. CMAI MAKES NO GUARANTEE OR WARRANTY AND ASSUMES NO LIABILITY AS TO THEIR USE.

MONTHLY ANALYSIS

CONTENTS/LINKS• Asia Olefins Price Settlement 2

- Focus -• CMAI’s 2012 World Light Olefins Analysis 3-4

- Graphical Analysis -• Monthly Ethylene Price Forecast 5• Monthly Propylene Price Forecast 6• Annual Olefins Forecast 7• Olefins Production Costs 8• Energy & Feedstock Costs 9• Ethylene Supply/Demand Balances 10• Propylene Supply/Demand Balances 11• Ethylene Trade Statistics 12• Propylene Trade Statistics 13

- Data Table -• Asia Olefins Price Forecast Table 14• New Olefins Capacity In Asia 15-17• 2011 Ethylene Plant Operating Schedule 18-20• 2011 On-Purpose Propylene Plant Operating Schedule 21• Ethylene Quarterly Supply/Demand (Latest Update as of October) 22-23• Propylene Quarterly Supply/Demand (Latest Update as of October) 24-25• Ethylene Net Equivalent Trade Table 26• Propylene Net Equivalent Trade Table 27

- Graphical Analysis (PowerPoint Version) -For graphical analysis in MS PowerPoint format, log on to

http://www.cmaiglobal.com with your username and password, and proceed to the "AMRLO report download section".

If you need further assistance, please contact Kelly Lu at [email protected]

Subscriber Notes: As part of CMAI’s continuous improvement efforts, we have updated two new charts on page 7 of the AMRLO Monthly Analysis report to reflect the production economics of an integrated ethylene cracker (with both butadiene and BTX extraction units) in NE and SE Asia. We believe that this will further add value to our customers in view of the current economic conditions.

November 10, 2011 / Issue No. 047 Page 2

Asian Market Report Light Olefins

Energy & Feedstock HydrogenCrude Oil WTI 86 $/bbl Crude Oil Brent 109 $/bbl NE Asia Est. 2,135Naphtha C&F Japan 884 $/ton Naphtha FOB Sin 96 $/bbl SE Asia Est. 2,096Propane CIF Japan 797 $/ton Butane CIF Japan 865 $/ton Methane FuelGas Oil C&F Japan 932 $/ton Gas Oil FOB Sin 123 $/bbl NE Asia Est. 836

SE Asia Est. 820Crude C4Asia Pacific 1,094

Ethylene Production CostsNaphtha NE Asia 1,161Naphtha SE Asia 1,137 EthyleneLPG NE Asia 1,111 NE Asia CFR 1,063LPG SE Asia 999 NE Asia FOB 1,039Gas Oil NE Asia 1,660 SE Asia CFR 1,041Ethane SE Asia 495 SE Asia FOB 1,021Wtd Avg Asia 1,118 Propylene

NE Asia CFR 1,351Propylene Production Costs NE Asia FOB 1,326*Cracker NE Asia 1,209 SE Asia CFR 1,354*Cracker SE Asia 1,195 SE Asia FOB 1,308Splitter NE Asia 900Splitter SE Asia 879PDH NE Asia 1,044PDH SE Asia 1,026 PygasMetathesis NE Asia 1,122 NE Asia CFR 808Metathesis SE Asia 1,024 SE Asia CFR 793Wtd Avg Asia 1,064 Fuel Oil 180 cst

C&F Japan 672FOB Sin 659

Ethylene Affordabilities Propylene AffordabilitiesPE (LLDPE) 1,049 PP (Homopoly) 1,132 Ethylene PropyleneStyrene 995 Acrylonitrile 1,188 Sep-11 1,203 1,205 HistoryMEG 1,583 Phenol 1,753 Oct-11 1,145 1,131 SettledVCM 1,347 2-Ethylhexanol 1,359 Nov-11 1,150 1,067 MTDWtd Avg Asia 1,155 N-Butanol 1,368 Dec-11 1,175 1,178 Forecast

Wtd Avg Asia 1,200

Prices are in U.S. Dollars Per Metric Ton, unless otherwise stated*Production costs based on per ton C2 & C3

CMAI Asia Contract Price (ACP)

October 2011 Asia Olefins Price Settlements

production cash cost) and CMAI’s production cost model for olefins derivatives (olefins affordability). CMAI ACP is the price at which chain profitability of olefins and derivative producers is split according

to the proportion of capital investment for their respective production units.

Please refer to May/August 2008 issue of AMRLO Focus for more information

CMAI ACP is an unbiased third-party olefins contract price reference that preserves the economicinterest of both producers/sellers and consumers/buyers, and minimizes pricing risks by ensuring an

equitable distribution of olefins and derivative margins, taking into consideration the average production cash cost of olefins producers and the average affordability of olefins consumers.

CMAI ACP is derived from CMAI’s production cash cost model for olefins (ethylene/propylene


Asian Market Report Light OlefinsCMAI’s 2012 World Light Olefins Analysis

The following is an extract from CMAI’s 2012 World Light Olefins Analysis, which was compiled to provide clients with a historical perspective of the global light olefins market, and also to analyze and predict the changes in the global market for light olefins and the associated derivatives over the next five years. Areas covered in this analysis include capacity, supply, demand, trade, prices, production costs, profitability and technology. Economic outlook, energy growth forecast and price projections provide the basis for forecasts of supply/demand fundamentals and production economics. Complementing the forecasts are assessments of historical and current market developments by country and region, with a focus on strategic issues such as cost competitiveness, trade flow, and production/consumption growth. Comprehensive datasets covering the period from 2006 to 2016 present economic developments, market share, technologies, capacities, prices, supply, demand, and trade on a country level to support the conclusions.

IntroductionThe 2012 World Light Olefins Analysis is intended to provide clients with a general overview of the global supply and demand trends for light olefins markets, as well as a more detailed examination of key market issues that, in CMAI’s opinion, will have a significant strategic impact on ethylene and propylene markets over the next five years.

In this write-up, we will focus on some of the key themes and issues from the 2012 World Light Olefins Analysis that will have an impact on the future of the global olefins market.

Global Economic GrowthGlobal demand for ethylene and propylene has historically grown at a multiple of world gross domestic product (GDP) growth. However, the relationship between olefin demand growth and economic growth is becoming more ambiguous, since many products produced by olefin end-users are increasingly being used for less cyclical non-durable applications. This is resulting in lower multiples to GDP growth, particularly in developed countries. In addition, the olefin demand to GDP elasticity is diluted by the increasing influence of the services sector on GDP growth and the correspondingly lower impact of manufacturing.

The 2011 to 2016 forecast anticipates ethylene demand and propylene demand to grow at an average rate of 1.0 and 1.2 times GDP, respectively. Compared to the past 20 years, the spread between propylene and ethylene demand growth rates will become increasingly narrow. Historically, when propylene prices were discounted

versus ethylene—thereby making propylene derivatives more competitive than ethylene derivatives—it was common for propylene demand growth to far outpace ethylene demand growth on a global basis.

Alternative Economic Growth Scenarios Will Have a Large Impact on Market OutlookEthylene demand growth projections are based on CMAI’s long-term GDP forecast. The main scenario anticipates global GDP growth of 3.8 percent on average between 2011 and 2016. Based on a GDP elasticity of around 1.2, when averaged over the next five years, ethylene demand is expected to expand at a rate of 4.3 percent, while operating rates should reach 90 percent by the end of the forecast period.

Deviations in the pace of global economic growth from CMAI’s main scenario, all else being equal, would lead to corresponding changes in ethylene demand growth trends, which would in turn either lower or raise average plant utilization. A one percent deviation either up or down from CMAI’s main GDP forecast scenario would result in a 1.2 percent increase or decrease in average annual ethylene demand growth rates. By 2016, ethylene demand volumes would be 8.4 million metric

tons lower in the pessimistic case compared to the base assumption. Conversely, they would be almost 8.8 million metric tons higher in the optimistic case if global GDP expands one percentage point faster than assumed in the base assumption.

Focus

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

World Light Olefin GDP Elasticity

Ethylene Propylene ~

Elasticity (Demand/GDP Ratio)

Forecast

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

PercentMillion Metric Tons

Base Demand Optimistic DemandPessimistic Demand Base Operating RateOptimistic Operating Rate Pessimistic Operating Rate

World Ethylene Supply and Demand Scenarios

5-year Global GDP Growth CasesBase Assumption: 3.8%/yrOptimistic Case: 4.8%/yrPessimistic Case 2.8%/yr

Forecast

~


Asian Market Report Light OlefinsThe Divergence in Energy Prices is Creating Regional OpportunitiesEthylene production costs are mostly determined by underlying feedstock prices derived from either natural gas (ethane, butane and propane) or crude oil (naphtha and gas oil). While steam crackers in West Europe and Asia are mainly naphtha-based, ethylene production in the Middle East and North America, as well as parts of SE Asia and South America, uses mainly ethane-based feedstocks. Therefore, changes in the price of natural gas relative to crude oil determine the competitiveness of producers, countries and whole regions. The recent shift in global crude oil market dynamics and changes in the energy markets in North America have dramatically changed the competitiveness of different regions. The current advantage of ethane-based production in North America is based on ample supplies from shale developments and growing demand for crude oil, particularly in developing economies. The focus of

future ethylene capacity additions has thus shifted back to North America.

Ethylene Derivative Demand is Centered in AsiaGrowth in ethylene derivative consumption will be mainly driven by the rapid economic development in Asia—particularly in China and increasingly also in India. Today the Asian region, including SE Asia, NE Asia and the Indian Subcontinent, accounts for an estimated 45 percent of the global ethylene equivalent consumption contained in derivatives. Asia’s share is expected to increase steadily as economic growth is expected to be modest in North America and West Europe, the other major consuming regions.

Propylene and Ethylene Prices Forecast to Remain Closer Compared to Historical LevelsPropylene demand typically has grown slightly faster than demand for ethylene. The faster pace stemmed mainly from higher consumption rates by polypropylene, propylene’s largest derivative, when compared to polyethylene, which dominates ethylene demand. However, as propylene prices have increased relative to ethylene prices, demand growth for polypropylene has slowed in comparison to polyethylene. In the future, the propylene to ethylene (P/E) price ratio is expected to remain close to 1.0, suggesting that the rate of demand growth for ethylene and propylene will be more closely aligned than in the past.

The 2012 World Light Olefins Analysis is now available in both book and CD-ROM format. To order, please contact Ms Kelly Lu at (65) 6501-1510 or via email at [email protected].

Focus

0

10

20

30

40

50

60

70

80

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

North America West Europe AsiaOthers Middle East South America

Million Metric Tons

~

2010 Consumption (kg/capita):North America = 54West Europe = 51 Asia = 15Middle East = 22

Equivalent Ethylene ConsumptionBy Major Region

Forecast

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

RatioSteam Cracker Propylene By-Product Values

U.S. P/E Ratio Europe P/E Ratio Asia P/E Ratio

Forecast

0%

20%

40%

60%

80%

100%

120%

0

2

4

6

8

10

12

14

16

18

20

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Gas as % of Crude Dollars per MMBtu

Energy Price Trends

Crude (WTI) Natural Gas Gas as % of Crude ~

Middle East Natural Gas Prices


Asian Market Report Light Olefins Monthly Ethylene Price Forecast

-400

0

400

800

1,200

1,600

2,000

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

Fixed Variable Net Feedstock Price CFR Month-to-date Cash Margin

Dollars Per Metric Ton

Southeast Asia Spot Ethylene Cash Cost and Margin Low Severity Full Range Naphtha

Forecast

~

-400

0

400

800

1,200

1,600

2,000


Fixed Variable

Net Feedstock Price CFR

Month-to-date Cash Margin


Northeast Asia Spot Ethylene Cash Cost and Margin Low Severity Full Range Naphtha

Forecast

~

300

600

900

1,200

1,500

1,800

2,100


Asia Ethylene Contract Prices

Thailand - Map Ta Phut Taiwan - CPC

S.Korea - Ulsan CMAI ACP

Forecast


~

300

600

900

1,200

1,500

1,800

2,100


Asia Ethylene Spot Prices

NEA CFR NAM Pipeline WEP CIF

Forecast


~

-500

0

500

1,000

1,500

2,000

2,500


PE-C2 Spreads Ethylene CFR NEA

LLDPE Butene CFR China LLDPE Non-Integrated Cash Margin

Ethylene and LLDPE Price Spreads

Forecast


~

-200

-100

0

100

200

300

400

250

500

750

1,000

1,250

1,500

1,750


NE & SE Asia Ethylene CFR Price Spread

SEA CFR - NEA CFR NEA CFR Spot Price SEA CFR Spot Price

Forecast

Dollars Per Metric Ton Spreads, Dollars Per Metric Ton

~

Monthly Ethylene Price Forecast: In Asia, the majority of crackers suffered from negative margins in October due to low ethylene prices and surging energy and feedstock values in line with sharply decreasing by-product prices. China’s tightened credit policy has been hampering downstream demand, while stable-to-high cracker running rates in the Middle East have been ensuring sufficient monomer and polymer supplies in Asia. Some crackers in Asia started to reduce their operating rates in October and further rate reductions are expected in November. Compared with stable cracker operations in other Middle Eastern countries, Iran faced feedstock restrictions for much of October. Many crackers in Iran were impacted by those restrictions with low running rates; however, export volumes should once again increase in November as availability improves. Ethylene prices in Asia have almost bottomed out around $1,000 per metric ton CFR Asia as producers in many countries have started to reduce running rates. Prices are forecast to remain around the current levels, with small rebounds expected at the end of November or in early December.



-400

0

400

800

1,200

1,600

2,000


NE Asia Propylene Cash Cost and Margin

Naphtha Cracking Cash Cost (per ton C2 & C3)

Propylene CFR NEA

Cash Margin

Forecast


~

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5


NE & SE Asia Propylene/Ethylene Ratio

P/E Ratio NEA CFR P/E Ratio SEA CFR

Forecast

~

300

600

900

1,200

1,500

1,800

2,100


Asia PG Propylene Contract Prices

Thailand - Map Ta Phut Taiwan - CPC CMAI ACP

Forecast


~

300

600

900

1,200

1,500

1,800

2,100

2,400


Asia Propylene Spot Prices

NEA CFR NAM Pipeline WEP CIF

Forecast


~

-500

0

500

1,000

1,500

2,000

2,500


Propylene and PP Price Spreads

PP-C3 Spreads PG Propylene CFR NEA

PP Homopolymer CFR China PP Non-Integrated Cash Margin

Forecast


~

-200

-100

0

100

200

300

400

300

600

900

1,200

1,500

1,800

2,100


NE & SE Asia Propylene CFR Price Spread

SEA CFR - NEA CFR NEA CFR Spot Price SEA CFR Spot Price

Forecast

Spreads, Dollars Per Metric Ton Dollars Per Metric Ton

~

Monthly Propylene Price Forecast: Propylene prices in Asia fell further in October amid a worsening global economy and weak downstream demand. In addition to excess regional cargoes caused by reduced derivative operating rates, deep-sea cargoes weighed on already weak sentiments in various regions. Increasingly negative cracker margins in Asia forced many crackers to reduce their running rates to below 90 percent in October, and further rate cuts have been announced since the beginning of November. The propylene balance turned long to balanced with no more cargoes expected from Europe and reduced cracker operations in Asia; however, demand is not expected to recover soon. Prices in Asia have not yet bottomed out, but they are unlikely to drop below $1,200 per metric ton CFR Asia. High cost pressure will support low-end prices around $1,200 per metric ton CFR Asia, with prices expected to rebound to above $1,300 per metric ton in November or early December. However, with the year-end approaching, cracker operators will try to reduce their inventories before the end of December and this will cap the price rebound.

Monthly Propylene Price Forecast



-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

SE Asia Ethylene Cash Cost and Margins

Net Feedstock Variable Fixed Ethylene SEA CFR Spot Cash Margins (Naphtha)

Forecast


~

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NE Asia Ethylene Cash Cost and Margins

Net Feedstock Variable Fixed Ethylene NEA CFR Spot Cash Margins (Naphtha)

Forecast


~

0

300

600

900

1,200

1,500

1,800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NE Asia Propylene Cash Cost and Margins

Naphtha Cracking Cash Cost Propylene NEA CFR Spot Price

Cash Margin

Forecast


~

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

P/E Ratio NE & SE Asia Propylene/Ethylene Ratio

P/E Ratio NEA CFR P/E Ratio SEA CFR

Forecast

~

-400

0

400

800

1,200

1,600

2,000

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Net Feedstock Variable Fixed Month-to-date Cash Margin Price CFR

Forecast


Southeast Asia Spot Ethylene Cash Cost and Margin Integrated Naphtha Cracker (BDE/ BTX)

~

-400

0

400

800

1,200

1,600

2,000

Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Net Feedstock Variable Fixed Month-to-date Cash Margin Price CFR

Forecast


Northeast Asia Spot Ethylene Cash Cost and Margin Integrated Naphtha Cracker (BDE/ BTX)

~

Annual Olefins Forecast: The new baseline GDP forecast now includes the assumption of a mild recession in the eurozone extending from 4Q 2011 to 1Q 2012. The recession will be triggered by the ongoing European debt crisis and the inability of policymakers to avoid a Greek default as Greece continues to miss its financial targets. Downward revisions of regional GDP growth not only for Europe, but also for other regions—particularly for the next two quarters—have resulted in lower global rates, now estimated at 2.8 percent for 4Q 2011 and 2.5 percent for 1Q 2012. The 3.0 percent global GDP growth forecast for the full year 2012 now matches the 2011 rate, but growth is still expected to accelerate to 3.8 percent by 2013 as a more solidly based recovery gains traction. Based on Purvin & Gertz’s latest naphtha supply/demand fundamentals and crude oil forecast, naphtha price projections have been adjusted to an average of $948 per metric ton CFR Japan for 2011 and $969 per metric ton CFR Japan for 2012. Correspondingly, our Asian naphtha cash cost projections based on Purvin & Gertz’s energy and feedstock forecasts are at an average of $1,038 per metric ton for 2011 and $1,230 per metric ton for 2012.

Annual Olefins Forecast



0

300

600

900

1,200

1,500

1,800


SE Asia Ethylene Production Cash Cost

Wtd Avg Naphtha LPG Ethane

Forecast


~

0

500

1,000

1,500

2,000


NE Asia Ethylene Production Cash Cost

Wtd Avg Naphtha LPG Gasoil

Forecast


~

0

200

400

600

800

1,000

1,200

1,400

1,600

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NE Asia Propylene Production Cash Cost

Wtd Avg Naphtha Splitter Propane Dehydro Metathesis

Forecast


~

0

400

800

1,200

1,600

2,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NE Asia Ethylene Production Cash Cost

Wtd Avg LPG Gasoil Naphtha

Forecast


~

NAM Avg. SEA Avg.

NEA Avg.

WEP Avg.

MDE Avg.

ISC Avg.

50

200

350

500

650

800

950

1,100

1,250

1,400

1,550

0 20 40 60 80 100 120 140 160

CUMULATIVE ETHYLENE CAPACITY (million tons)

2011 Global Ethylene Cash Costs by Site Dollars Per Metric Ton

94 2011 Annual Average WTI Crude Oil, Dollars Per Barrel =

Average Feedstock Basis

~

101

828

970 1007 1109 1111 1137 1149 1161

0

200

400

600

800

1,000

1,200

1,400

Global Ethylene Cash Cost in

*MDE cash costs are average values of Iran and Saudi Arabia


Oct 2011

~

Olefins Production Costs: Global petroleum prices rallied strongly in October, with WTI increasing nearly $20 per barrel and Brent increasing just below $15 per barrel throughout the month. Despite the strong price movement, WTI and Brent prices ended the month averaging just above $85 and $109 per barrel, respectively. As a result, the spread between Brent and WTI narrowed, with the monthly average spread at just under $24 per barrel. Based on Purvin & Gertz’s forecasts for December 2011 and January 2012, naphtha prices are expected to be $934 and $937 per metric ton CFR Japan, respectively, which translates into naphtha cracking production cash cost of around $1,328 per metric ton for December and $1,286 per metric ton for January. Based on CMAI’s latest forecast, integrated cracker (with butadiene and BTX extraction units) margins are expected to recover by 1H 2012, much earlier than standalone cracker margins.

Olefins Production Costs


Asian Market Report Light Olefins Energy & Feedstock Costs

20

30

40

50

60

70

80

90

100

110

120

130

140

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Global Crude Oil Prices

Crude WTI

Brent Crude

Crude Dubai

Forecast

Source: Purvin & Gertz, Inc.

Dollars Per Barrel

~

30

50

70

90

110

130

150


Global Crude Oil Prices

Crude WTI

Crude Brent

Crude Dubai


Dollars Per Barrel

~

Forecast

0

50

100

150

200

250

300

350

200

300

400

500

600

700

800

900

1,000

1,100

1,200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Brent Crude & Japan Naphtha - Crack Spread

Naphtha Japan - Brent Spread Brent Crude Naphtha Japan

Forecast

Spreads, Dollars Per Metric Ton



~

0

100

200

300

400

500

0

200

400

600

800

1,000

1,200

1,400


Brent Crude & Japan Naphtha - Crack Spread

Naphtha Japan - Brent Spread Brent Crude Japan Naphtha

Forecast Source: Purvin & Gertz Inc.


~

(600)

(400)

(200)

0

200

400

600

0

300

600

900

1,200

1,500

1,800


Japan Naphtha & LPG Steam Cracking - Spread Based on NE Asia production cost

Japan Naphtha - LPG Spread Japan LPG Cash Cost

Japan Naphtha Cash Cost

Forecast Naphtha Cracking Advantageous

LPG Cracking Advantageous Source: Purvin & Gertz


~

0

20

40

60

80

100

200

400

600

800

1,000

1,200

1,400


Singapore vs. Japan Naphtha Spread

Sin-Jap Naphtha Spread Singapore FOB Japan CFR

Forecast Source: Purvin & Gertz Inc.

Dollars Per Metric Ton Spread, Dollars Per Metric Ton

~

Energy & Feedstock Costs: The Dated Brent price has been volatile in the past weeks, but it now appears to be stabilizing at around $110 per barrel. The potential for near-term supply-side improvement is limited. The economic threats from the eurozone debt crisis are mounting to undermine some support in the total demand growth outlook. The resulting price outlook carries some near-term downside before stabilizing again at about $110 per barrel. The Dated Brent to WTI spread has started narrowing to the $16–$17 per barrel range with the recovery in production from Libya and inventories at Cushing below the 2011 peak. Asian naphtha market sentiment remained bearish despite the recovery in regional demand from NE Asia. The market was supported by demand from continued higher operating rates at South Korean petrochemical plants, excluding SK Corp's small cracker. Petrochemical demand has remained soft amid monetary tightening measures in China and India to tame inflation, coupled with the extremely uncertain European economic outlook. Our latest balances show that the East-of-Suez naphtha market is forecast to remain marginally net short. However, weakening of the gasoline market is expected to weigh on naphtha market sentiment.


Asian Market Report Light Olefins Ethylene Supply/Demand Balances

Ethylene Supply/Demand Balances: Cracker operators in Asia have started to cut their operating rates since October amid weak downstream demand. Integrated producers are also affected as downstream derivative prices continue on the downtrend with no respite in sight. As most crackers return from their turnarounds and shutdowns in 4Q, the ample availability in the region has forced producers to slash their operating rates amid falling demand. Crackers in China, Taiwan and Japan are running at 80–90 percent, while South Korean crackers are at around 90–95 percent. Crackers in SE Asia have also reduced their run rates to around 85 percent in the face of weak demand. This situation is expected to remain unchanged for the rest of the year. As the economic climate remains weak with the ongoing crisis in Europe, buyers will remain cautious and purchase only on a hand-to-mouth basis. The peak buying period for the year-end holidays is already over, hence there is limited optimism among downstream producers for the remaining months of 2011.

0%

4%

8%

12%

16%

20%


WEP SEA NEA NAM

Lost Capacity

~

Forecast includes 1.5% unplanned and variable

market outages

Regional Ethylene Production Outages

55%

65%

75%

85%

95%

105%

115%

0.0

0.3

0.5

0.8

1.0

1.3

1.5


Ethylene Production Capacity Loss in Asia

Australia Thailand Singapore Malaysia Indonesia Taiwan South Korea Japan China NEA Cracker Availability SEA Cracker Availability

Million Metric Tons


market outages

Availability

~

Ethylene Production Lost to planned/unplanned cracker shutdowns (million metric tons)

2010 2011fct 2012fct 3.89 4.40 5.34

50

60

70

80

90

100

110

25

30

35

40

45

50

55

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Asia Ethylene Supply/Demand Balance

Total Ethylene Demand Total Ethylene Capacity Cracker Operating Rate

Forecast

Million Metric Tons Operating Rate, Percent

~

50%

60%

70%

80%

90%

100%

110%

2.3

2.6

2.9

3.2

3.5

3.8

4.1


Asia Ethylene Supply/Demand Balance

Domestic Ethylene Demand Monthly Ethylene Production

Cracker Availability

Forecast

Million Metric Tons Availability

Note: Domestic demand excludes export volume

~

-8.0

-4.0

0.0

4.0

8.0

12.0

16.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Global Ethylene Capacity & Demand Additions

Asia North America West Europe

Middle East Other World Demand

Forecast

Million Metric Tons

~

Ethane 7.2%

Propane 2.2%

Butane 2.9%

Naphtha 81.5%

Gas Oil 5.0%

Others 1.2%

Alpha Olefins 0.3% Ethylbenzene

9.7%

EDC 10.8%

Ethylene Oxide 13.7%

HDPE 27.7%

LDPE 14.9%

LLDPE 17.1%

Vinyl Acetate 1.7%

Others 4.1%

2011 Asian Ethylene Market

Supply

Demand


Asian Market Report Light Olefins Propylene Supply/Demand Balances

Propylene Supply/Demand Balances: With the reduction in Asian cracker operating rates, propylene production will also be cut, in addition to ethylene supply. Weak demand in the downstream derivatives market has forced producers to reduce their operating rates as availability improved with the return of crackers and on-purpose propylene units from their earlier shutdowns. The reduction in cracker operating rates is expected to continue for at least the next two months given the worsening global economy and the slump in downstream derivative prices in recent weeks. Meanwhile, non-steam cracking operating rates remain at 90–95 percent. However, should propylene margins remain weak, it is likely that on-purpose availability will be decreased further to cope with the downturn. With the uncertainties in the global economy, market players remain on the sidelines and continue to operate at low inventory levels to minimize inventory risk.

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Asia Propylene Supply Additions By Production Type

Stm. Crackers FCC Splitter Dehydro Metathesis Others

Forecast

Million Metric Tons

~

75%

80%

85%

90%

95%

100%

105%

0

200

400

600

800

1,000

1,200


Propylene Production Capacity Loss in Asia

Steam Cracker FCC unit

PDH & Metathesis Non-Steam Cracking Availability*

Thousand Metric Tons Availability

*Non-steam cracking availability includes production from metathesis, PDH and FCC splitter

~


market outages

50

60

70

80

90

100

110

20

25

30

35

40

45

50

55

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Asia Propylene Supply/Demand Balance

Total Propylene Demand Total Propylene Capacity

C3 Production Operating Rate

Forecast

Million Metric Tons Operating Rate, Percent

~

50%

60%

70%

80%

90%

100%

110%

1.6

1.9

2.2

2.5

2.8

3.1

3.4


Domestic Propylene Demand Monthly Propylene Production

Non-Steam Cracking Availability*

Forecast

Million Metric Tons Availability

*Non-steam cracking availability includes production from metathesis, PDH and FCC splitter

Asia Propylene Supply/Demand Balance Propylene Production from Steam Cracking and Non-Steam Cracking Technologies

~

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Global Propylene Capacity & Demand Additions

Asia North America West Europe

Middle East Other World Demand

Forecast

Million Metric Tons

~

Ex Stm. Crackers

68.4%

Ex FCC Splitter 22.6%

Ex Dehydro 3.0%

Metathesis 5.3%

Olefin Cracking 0.3%

Gas-to-Olefins 2.9%

HS FCC 2.3%

Acrylic Acid 4%

Acrylonitrile 10%

Cumene 6%

Isopropanol 1%

Oligomers 1%

2-Ethyl Hexanol 5%

Butanols 3%

Polypropylene 65%

Propylene Oxide 5%

Others 1%

2011 Asian Propylene Market

Supply

Demand


Asian Market Report Light Olefins Ethylene Trade Statistics

-2.4

-1.8

-1.2

-0.6

0.0

0.6

1.2

1.8

2.4

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Global Net Ethylene Monomer Trade

North America West Europe Middle East

Northeast Asia Southeast Asia Others

Million Metric Tons

Forecast

Net Import

Net Export

~

-240

-180

-120

-60

0

60

120

180

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11

Net Ethylene Monomer Trade in Asia

Japan China Taiwan S Korea Singapore Indonesia Malaysia Thailand

Thousand Metric Tons

Net Import

Net Export

~

-32.0

-24.0

-16.0

-8.0

0.0

8.0

16.0

24.0

32.0

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Global Net Ethylene Equivalent Trade

North America West Europe Middle East Northeast Asia Southeast Asia Other

Million Metric Tons

Forecast

Net Import

Net Export

~

-1.8

-1.4

-1.0

-0.6

-0.2

0.2

0.6

1.0


Net Ethylene Equivalent Trade in Asia


Million Metric Tons

Net Import

Net Export

~

(1.5)

(1.2)

(0.9)

(0.6)

(0.3)

0.0

0.3

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11

Ethylene Polyethylene Vinyls Styrenics Glycol Others Net Trade

Net Import

Net Export

Million Metric Tons

China Monthly Ethylene Net Equivalent Imports

~

Ethylene International Spot Arbitrage Opportunities

Inter-region trade flows / arbitrage movements Inter-region arbitrage movement limited / closed

Inter-region, potential arbitrage opening

Estimated Freight Rates

U.S Gulf 1,103 – 1,147 delivered

155 – 175 4,500 basis

105– 115 4,500 basis

Middle East Gulf.

300 - 310

235 - 240

115 – 125 4,500 basis

N.W. Europe 1,180 – 1,220 CIF (n)

Mediterranean

Intra-region trade flows

N.E. Asia 1,000 - 1,050 FOB (n) 1,000 -1,070 CFR (n)

S.E. Asia 980 - 1,020 FOB (n) 980 - 1,020 CFR (n)

November 2011 (Dollars Per Metric Ton)

360 - 370

150 - 160

~

420 - 425

Ethylene Trade Statistics: Iranian exports for the rest of the year are expected to improve with the plant operation in Bandar Assaluyeh recovering. Work on a gas processing plant during October limited plant operating rates to the point that Morvarid PC had to shut down in October. There was also some excess supply of ethylene from Sabic for November arrival into SE Asia due to operational issues at the Kayan HDPE, but we expect export volumes to return to normal for the rest of the year. With the imminent start-up of the QAPCO LDPE plant in Qatar, export volumes are expected to decline slightly for the rest of the year. However, the increased operation of the Borouge II capacity is expected to increase export opportunities into SE Asia, even for 2012. The bleak global economic outlook for the remainder of the year has limited derivative trade volumes. In early November, China’s domestic market was stronger than the import market as buyers were reluctant to purchase import cargoes due to the longer delivery time, thus keeping Middle Eastern PE exports limited. We expect this to continue throughout the rest of the year. Some recovery in exports is expected during late 1Q and 2Q 2012 when positive economic sentiment recovers.


Asian Market Report Light Olefins Propylene Trade Statistics

-1.2

-0.9

-0.6

-0.3

0.0

0.3

0.6

0.9

1.2

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Global Net Propylene Monomer Trade



Million Metric Tons

Net Import

Net Export Forecast

~

-300

-240

-180

-120

-60

0

60

120

180

240


Net Propylene Monomer Trade in Asia


Thousand Metric Tons

Net Import

Net Export

~

-9.0

-6.0

-3.0

0.0

3.0

6.0

9.0

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Global Net Propylene Equivalent Trade



Million Metric Tons

Forecast

Net Import

Net Export

~

-1.2

-0.9

-0.6

-0.3

0.0

0.3

0.6

0.9

1.2


Net Propylene Equivalent Trade in Asia

Japan China Taiwan S Korea

Singapore Indonesia Malaysia Thailand

Million Metric Tons

Net Import

Net Export

~

(1.0)

(0.8)

(0.6)

(0.4)

(0.2)

0.0

0.2

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11

Propylene Polypropylene Acrylonitrile Cumene Others Net Trade

Net Import

Net Export

Million Metric Tons

China Monthly Propylene Net Equivalent Imports

~

Inter-region trade flows / arbitrage movements Inter-region arbitrage movement limited / closed

Inter-region, potential arbitrage opening

Estimated Freight Rates

Propylene International Spot Arbitrage Opportunities

N.W. Europe 1,193 - 1,235 CIF (n)

South America

120 - 130

200 - 205

80 - 90

Intra-region trade flows

N.E. Asia 1,200 – 1,260 FOB (n) 1,230 - 1,270 CFR (n)

S.E. Asia 1,230 - 1,270 FOB(n) 1,280 - 1,320 CFR (n)

(Dollars Per Metric Ton)

370 - 380 9000 MT Basis

November 2011

Middle East Gulf. 235 - 240

5000 MT basis

~

U.S Gulf 1,257 - 1,279 delivered

Propylene Trade Statistics: Propylene trade from Thailand has been impacted by the start-up of Dow’s new HPPO plant, which has reportedly achieved full operation. The reported start-up of Polytama’s PP plant in Indonesia is expected to increase import volumes into SE Asia. Thus, the arbitrage opportunity from NE Asia and Europe into SE Asia is expected to remain fairly open for the rest of the year. However, trade volumes from NE Asia are expected to be affected by the steam cracker operation cuts by most cracker operators in NE Asia. Chinese import volume for the rest of the year is also expected to be more cautious, depending on sentiment in the derivative markets. Some short-lived momentum in the PP market is expected to encourage some import interest for propylene for December, but this is expected to fade as China enters into the Lunar New Year holiday period in January. Domestic PP demand in Thailand is also not showing any signs of improving as the country struggles to cope with the flood situation, resulting is some export potential.

Novem

ber 10, 2011 / Issue No. 047

Page 14


Crude Oil Crude Oil Naphtha Naphtha Ethylene Spot Propylene Spot Spot Production Ethylene Spot Propylene Spot Spot Production Ethylene Contract Ethylene Contract PGP Contract PGP ContractWTI Dubai CFR Japan FOB Singapore CFR NE Asia CFR NE Asia Cash Cost CFR SE Asia CFR SE Asia Cash Cost North America West Europe North America West Europe

US$/Barrel US$/Barrel US$/Metric Ton US$/Barrel US$/Metric Ton US$/Metric Ton US$/Metric Ton US$/Metric Ton US$/Metric Ton US$/Metric Ton Cents/Pound €/Metric Ton Cents/Pound €/Metric Ton

2010 79.41 78.08 723.87 79.22 1,116 1,206 885 1,078 1,149 916 45.90 952 61.08 9352011 94.05 105.73 943.53 102.98 1,195 1,463 1,171 1,178 1,412 1,183 54.00 1,141 75.67 1,1202012 97.21 106.98 967.50 105.15 1,305 1,478 1,266 1,253 1,488 1,231 55.83 1,149 74.00 1,1492013 95.76 101.18 916.63 99.62 1,276 1,411 1,131 1,260 1,395 1,128 56.77 1,100 74.20 1,1102014 102.28 99.13 931.53 100.77 1,305 1,431 1,191 1,289 1,415 1,187 59.55 1,091 73.13 1,1202015 105.01 101.73 961.92 103.94 1,452 1,564 1,178 1,435 1,548 1,169 63.49 1,085 74.75 1,113

Jan-10 78.31 76.67 728.85 80.57 1,306 1,228 857 1,341 1,214 868 49.00 870 57.00 790Feb-10 76.45 73.48 687.94 75.76 1,319 1,195 809 1,286 1,146 843 52.50 940 63.50 875Mar-10 81.23 77.31 732.59 80.84 1,176 1,266 821 1,143 1,179 881 55.50 940 68.50 910Apr-10 84.44 83.59 755.47 83.13 1,244 1,300 852 1,185 1,241 885 52.50 960 75.50 980May-10 73.62 76.95 709.72 77.64 1,221 1,223 842 1,155 1,198 857 44.75 960 63.50 1,000Jun-10 75.29 73.99 665.83 72.42 943 1,096 838 914 1,036 865 39.50 970 55.50 1,000Jul-10 76.55 72.74 636.33 68.63 893 1,066 788 817 1,014 806 37.00 958 55.50 978

Aug-10 76.66 74.24 674.67 73.22 940 1,189 799 904 1,098 843 39.00 940 57.50 940Sep-10 75.17 75.20 687.13 74.54 1,044 1,173 847 1,025 1,145 849 39.00 950 60.00 930Oct-10 81.89 80.22 759.05 82.97 1,113 1,185 994 1,075 1,135 1,017 42.75 950 58.50 920Nov-10 84.20 83.67 794.28 87.24 1,020 1,253 1,032 1,005 1,178 1,080 50.75 978 57.50 938Dec-10 89.08 88.92 854.60 93.66 1,175 1,297 1,145 1,088 1,200 1,200 48.50 1,005 60.50 960Jan-11 89.38 92.48 869.96 95.04 1,245 1,346 1,104 1,131 1,291 1,121 45.25 1,110 77.50 1,070Feb-11 89.57 100.24 895.14 97.87 1,310 1,451 1,061 1,285 1,400 1,078 49.00 1,135 77.50 1,105Mar-11 102.99 108.71 981.61 107.83 1,321 1,570 1,183 1,266 1,492 1,221 53.75 1,195 72.50 1,185Apr-11 109.89 116.00 1,050.64 115.38 1,359 1,578 1,355 1,432 1,571 1,348 57.25 1,205 87.50 1,210May-11 101.22 108.40 989.41 108.50 1,356 1,589 1,164 1,319 1,544 1,174 58.50 1,230 97.00 1,245Jun-11 96.21 107.77 939.55 101.90 1,149 1,434 1,124 1,157 1,387 1,117 56.75 1,185 82.00 1,205Jul-11 97.26 109.99 974.27 105.92 1,136 1,509 1,119 1,198 1,419 1,150 56.75 1,090 78.00 1,130

Aug-11 86.30 105.02 946.30 103.00 1,164 1,598 1,024 1,156 1,438 1,100 55.50 1,120 78.00 1,115Sep-11 85.55 106.30 947.61 103.49 1,117 1,531 1,141 1,117 1,438 1,167 54.50 1,115 78.00 1,078Oct-11 86.45 103.95 883.86 96.19 1,063 1,351 1,161 1,041 1,354 1,137 54.00 1,115 64.00 1,068Nov-11 90.89 104.70 909.52 98.95 1,025 1,250 1,289 1,000 1,275 1,280 1,095Dec-11 92.87 105.25 934.48 101.68 1,100 1,350 1,328 1,030 1,330 1,310Jan-12 93.60 105.50 937.18 101.80 1,200 1,400 1,286 1,120 1,410 1,250Feb-12 95.41 106.05 968.42 104.40 1,250 1,430 1,325 1,180 1,425 1,289Mar-12 96.03 106.25 958.97 104.60 1,200 1,400 1,290 1,160 1,445 1,242Apr-12 96.71 106.50 963.53 104.85 1,240 1,500 1,221 1,195 1,490 1,198May-12 97.38 107.05 969.12 105.39 1,260 1,480 1,239 1,215 1,490 1,201Jun-12 97.35 107.20 975.67 105.54 1,270 1,490 1,259 1,220 1,500 1,213Jul-12 98.10 107.60 975.56 105.93 1,315 1,520 1,250 1,265 1,530 1,214

Aug-12 98.83 108.15 979.21 106.47 1,355 1,500 1,278 1,305 1,510 1,242Sep-12 98.47 107.90 973.82 106.23 1,375 1,495 1,272 1,325 1,505 1,240Oct-12 98.53 107.75 971.33 106.08 1,415 1,510 1,267 1,365 1,520 1,237Nov-12 98.35 107.37 972.82 105.70 1,415 1,535 1,257 1,365 1,545 1,222Dec-12 97.77 106.46 964.43 104.81 1,370 1,475 1,250 1,320 1,485 1,217

MONTHLY

ASIAN OLEFINS PRICE FORECAST TABLE SUMMARYEnergy Market Northeast Asia Southeast Asia North America & West Europe

ANNUAL

Asia O

lefins Price Forecast

For North America and West Europe Forecast Prices, please

log in to http://www.cmaiglobal.com

Novem

ber 10, 2011 / Issue No. 047

Page 15


Ethylene Propylene ButadieneCountry Company City Type Derivatives Comments

2011 1Q China Shandong Yuhuang Heze, Shandong - 200 - New FCC unit PP2011 Feb China BASF/Yangzi PC Nanjing, Jiangsu 150 75 130 Expansion EO/EG Construction started Jul 2006, feasibility study has been

submitted. Project postponed due to weak market. Butadiene unit is started up only in 2H Sep 2011.

2011 Apr S. Korea LG Chem Daesan 140 70 23 Expansion Purpose to balance downstream system2011 May S. Korea Samsung Total Daesan 150 80 - Expansion2011 May S. Korea Hyundai Oil Daesan - 200 - New FCC unit Majority of propylene production bound for exports.

Production will increase to 300kta by 2012.2011 Jun/Jul China Zhanjiang Zhongxing Zhanjiang, Guangdong - 120 - New FCC unit Propylene will likely be sold in spot market2011 Oct China Datang Int'l Power Duolun, Inner Mongolia - 500 - New MTP plant PP Project delayed from 1H 2010, methanol unit expected to

commence operation in Sep. Construction completed in Nov 2010. Trial runs in progress, expected to complete in 2H 2011. Methanol on-specification achieved in June 2011. Commercial operations expected in Oct 2011.

2011 Oct China Zhongyuan PC Puyang, Henan 100 100 - New CTO plant LLDPE, PP Construction started Apr 2010. Sinopec demonstration CTO demonstration unit.

2011 4Q Japan Idemitsu Kosan Chiba - 16 - FCC Upgrading. - In Aug 2011, completed a 16 billion yen ($208 million) upgrade to the 45,000 barrels per day FCC unit at its Chiba refinery. Commercial production expected in 4Q 2011.

2011 Oct China SINOPEC Beihai PC Beihai, Guangxi - 220 - New FCC unit PP Construction started Mar 2010. Started up in Oct 2011 but commercial operations expected in Dec 2011.

2011 4Q China Ningxia Ref & Chem Yinchuan, Ningxia - 100 - Expansion PP Start-up postponed from early 2011.Total capacity addition for year 2011 540 1,681 153

2012 1Q China Hohhot Refinery Hohhot, Inner Mongolia - 150 - New FCC unit PP2012 2Q China Fushun PC Fushun, Liaoning 800 400 120 New cracker HDPE, LLDPE, PP Ground broken Aug 2006. Project postponed due to

feedstock issues. Further postponement from 2010 due to construction issues.

2012 2Q Taiwan CPC Talin, Kaohsiung - 450 - New FCC unit Construction from Sep 2008 to Jan 2012. Start-up expected in 1H 2012.

2012 2Q China Qixiang Tengda Chem Zibo, Shandong - - 100 New butadiene unit - Expected start-up in 2Q 2012.2012 2H Singapore ExxonMobil Pulau Ayer Chawan 1,000 500 - New cracker HDPE, LLDPE, PP Official annoucement on Sep 2007. Shaw Stone &

Webster (S&W) awarded technology contract.Delayed to 2H 2012 start-up.

2012 Jul S. Korea LG Chem Daesan 50 25 - Cracker expansion - Daesan cracker expansion by 50 KTA ethylene capacity. No TA required.

2012 3Q S. Korea Honam PC Yeosu 250 130 - Expansion HDPE, PP Official announcement Jan 2010. Crude C4 from existing cracker will be diverted to butadiene production from 2010

2012 3Q Indonesia Pertamina Balongan, Java - 70 - New FCC unit PP Expected start-up in 3Q 2012.2012 Sep China Bohai Chemical Tanggu, Tianjin - 600 - New PDH plant PO Lummus Technology. Constructed began in May 2010.

Partially feed to Tianjin Dagu's propylene oxide plant, rest for spot sales

2012 Sep China Anqing PC Anqing, Anhui - 100 - Expansion AN, PP Expansion-cum-relocation project. No new derivative units, expansion of propylene capacity to balance downstream production and supply for domestic sale

2012 Nov China Jilin Chemical Jilin, Jilin - 200 - New FCC unit Using KBR Superflec technology to further improve C3 yield from FCC unit

2012 4Q China Tianjin Jin Weihui Dagang, Tianjin - 180 - New splitter unit Construction began Dec 2008. Buys LPG feedstock for processing in splitter unit

Total capacity addition for year 2012 2,100 2,805 220The data presented herein are based on information collected within the public sector and assessments by CMAI consultants. CMAI provides no guarantee or warranty of the presented information and assumes no liability as to their use.

Start-upDate (Thousand Metric Tons Per Year)

NEW OLEFINS CAPACITY ADDITIONS IN ASIA

New

Olefins C

apacity in Asia

Novem

ber 10, 2011 / Issue No. 047

Page 16



2013 1Q Thailand IRPC Rayong City - 100 - New metathesis unit PP Project approved in Jan 2009, construction in Aug 2010 2013 1Q Taiwan CPC Lin Yuan, Kaohsiung 720 360 110 New cracker - Scrap-and-build project, received government approval

in mid-2009. Groundbreaking ceremony in Aug 20092013 1Q S. Korea GS Caltex Yeosu - 250 - New FCC unit - Construction for 53 kbbl/day VGO FCC unit started in

May 2011. Expected to be completed by 1Q 2013.2013 Feb China SINOPEC Wuhan Wuhan, Hubei 800 400 120 New cracker HDPE, LLDPE, PP Approved by CNDRC in Apr 2007, ground broken Dec

2007. Framework agreement signed May 2008 between Sinopec and SK Energy. Project delayed due to expectation of weak demand. Construction scheduled to start in 1Q 2010

2013 1Q China Daqing Refinery Daqing, Heilong - 300 - New FCC unit PP Delayed start-up in line with cracker project, original S/U in mid-2009

2013 1Q China Daqing PC Daqing, Heilong. 600 300 90 New cracker HDPE, LLDPE, PP Received environmental approval, technology licensing and EPC contracted to Shaw. Ground broken Dec 2007,

2013 2Q China Yulin Energy & Chem Co. Yulin, Shaanxi 300 300 - New MTO plant HDPE, LLDPE, PP Owned by Shaanxi Yanchang Petroleum Group. Groundbreaking in Jun 2008

2013 2Q China Yulin Energy & Chem Co. Yulin, Shaanxi 300 300 - New DCC unit HDPE, LLDPE, PP2013 1H China Wison (Nanjing) Clean Energy Co. Nanjing 295 295 - New MTO plant - The project will be the first commercial-scale installation

of Honeywell UOP's advanced MTO methanol-to-olefins solution, which allows petrochemical producers to use methanol from natural gas or coal, instead of petroleum, to produce high yields of high-value plastics and petrochemicals.

2013 1H China Zhejiang Julong PC Pinghu City, Zhejiang - 450 - New PDH plant - Uses UOP Oleflex process. 2013 1H India Indian Oil Panipat, Har - - 138 New butadiene unit -2013 2H China Maoming PC Maoming, Guangdong - 200 - New FCC unit PP As part of its refinery expansion. Construction started in

May 2011.2013 Jul India BCPL Dibrugarh, Assam 220 60 - New cracker HDPE, LLDPE, PP Commissioning will be delayed to Jul 2013 from original

Apr 2012.2013 3Q China Pucheng Clean Energy Chem Pucheng, Shaanxi 300 380 - New MTO plant HDPE, LLDPE Groundbreaking Aug 20102013 3Q Indonesia Chandra Asri Merak, West Java - - 100 New butadiene unit - Construction scheduled to start in Q2 2011. Discussions

with engineering, procurement and construction contractors to be finalised in May 2011.

2013 3Q Philippines JG Summit PC Batangas, Batangas 320 190 - New cracker HDPE, LLDPE, PP Olefins production will be fed into existing downstream polyolefins units. Financing approved by Korean credit agency. Project was delayed due to financial crisis.Construction began in Jan 2011 and expected to be completed by 2012.

2013 4Q China Yantai Wanhua Yantai, Shandong - 750 - New PDH plant Acrylic Acid, PO UOP Oleflex Process.2013 Oct China Sichuan PC Chengdu, Sichuan 800 400 150 New cracker HDPE, LLDPE Ground broken Feb 2006. Project has been delayed

from original start-up in 2010 due to Sichuan earthquake. Construction began in Apr 2009. Start-up further delayed from 2012 to end 2013 due to shortage

2013 Oct China Sichuan PC Chengdu, Sichuan - 300 - New FCC unit PP Dow technologyTotal capacity addition for year 2013 4,655 5,335 708

2014 1Q China Shanghai PC Jinshan, Shanghai 300 300 - New MTO plant LDPE, PP Changed from original plan of 600kta ethylene cracker.2014 1Q China Ningbo Heyuan Chem Ningbo, Zhejiang 300 300 - New MTO plant EO, PP Construction begins in 2011

2014 1H China Fujian Meide PC Fujian, Fujian - 660 - New PDH plant PP The unit will use UOP's C3 Oleflex technology.

2014 1H China Ningbo Haiyue New Material Co Ningbo City - 600 - New PDH plant - The unit will use the Catofin dehydrogenation process (Lummus Technology).

2014 1H India OPAL Dahei, Guj 1,100 340 95 New cracker HDPE, LDPE, PP Dual-feed steam cracker2014 Aug China Shenhua Ningmei Ningdong, Ningxia - 500 - New MTO plant PP 2nd phase of the MTO complex using Lurgi technology.

Approved by NDRC in late 2011 and expected to start up in Aug/ Sep 2014.

2014 3Q China Shaanxi Yanchang Yan'an, Shaanxi 450 450 - New MTO plant HDPE, LLDPE, PP, oxo-alcohol

Agreement signed with provincial authorities Apr 2010. Construction began Jul 2010

2014 4Q India GAIL Auraiya, UP 450 - - New cracker HDPE, LLDPE Construction began 4Q 2010 for HDPE / LLDPE plant2014 4Q Philippines Petron Corp Limay, Bataan - 250 - New FCC unit - As part of Petron's phase 2 refinery upgrade. Expected

to be completed in end of 2014.2014 4Q China Shanxi Coking Hongdong, Shanxi 300 300 - New MTO plant HDPE, LLDPE, PP Construction began on 1 August 2011. 2014 4Q China Sinopec Zhijin Zhijin, Guizhou Province 300 300 - New MTO plant LLDPE, PP Construction began on 28 September 2011. JV between

Sinopec and Guizhou Shuicheng Coal Mining Group (49%/51%)

Total capacity addition for year 2014 3,200 4,000 95The data presented herein are based on information collected within the public sector and assessments by CMAI consultants. CMAI provides no guarantee or warranty of the presented information and assumes no liability as to their use.

NEW OLEFINS CAPACITY ADDITIONS IN ASIAStart-up

Date (Thousand Metric Tons Per Year)

New

Olefins C

apacity in Asia

Novem

ber 10, 2011 / Issue No. 047

Page 17



2015 1Q China Sinopec-KPC JV Zhanjiang, Guangdong 1,000 533 152 New cracker HDPE, LDPE, LLDPE, EG, PP

50:50 Sinopec-KPC JV. Approved by China's NDRC in Mar 2011. Construction will begin in 2012 and expected to complete by end 2014, with operations to begin in 1H 2015.

2015 1Q China Sinopec-KPC JV Zhanjiang, Guangdong - 235 - New FCC unit PP Refinery integrated with cracker unit2015 1Q China Yankuang Guohong Chem Zoucheng, Shandong 300 300 - New MTO plant EVA/LDPE, PP Planning stage.2015 1Q Thailand IRPC Rayong City - 260 - FCC expansion Part of IRPC's Pheonix Projects. 2015 1H Vietnam Ngi Son Ngi Son, Thanh Hoa - 150 - New FCC unit - Groundwork began in May 2008. Consturction expected

to complete by end of 2014.2015 1H China Ningxia Baofeng Energy Group Ningdong, Ningxia 300 300 - New MTO plant PP, LLDPE, HDPE2015 2H India Reliance Industries Jamnagar, Guj 1,350 150 - New cracker LDPE, LLDPE, EO Using naphtha and off-gas feedstock from refinery (high

severity FCC unit). Project will be delayedTotal capacity addition for year 2015 2,950 1,928 152

2016 2Q China Yili Meidianhua Yili, Xinjiang 300 300 - New CTO plant HDPE, LLDPE, PP Construction started in May 2011 and expected to take 48 months.

2016 1H China CNOOC & Shell Huizhou, Guangdong 1,000 530 - New cracker HDPE, LLDPE, PP

Total capacity addition for year 2016 1,300 830 0The data presented herein are based on information collected within the public sector and assessments by CMAI consultants. CMAI provides no guarantee or warranty of the presented information and assumes no liability as to their use.

NEW OLEFINS CAPACITY ADDITIONS IN ASIAStart-up

Date (Thousand Metric Tons Per Year)

New

Olefins C

apacity in Asia

Novem

ber 10, 2011 / Issue No. 047

Page 18

Asian Market Report Light OlefinsE

thylene Plant O

PS

Revised: November 10, 2011

Company Location Process Capacity Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Baotou Shenhua Baotou, Inner Mongolia 10 300 RRRR RRRR RRRR RRRR RRRR RRRR RMMM MMM - - - - -

BASF/Yangzi PC Nanjing, Jiangsu 5 750 XXXX XX - - - - RRRR RRRR - - - - - -

Beijing Dongfang Beijing, Hebei 5 150 - - MMMM - - - - - - - - -

CNOOC & Shell PC Huizhou, Guangdong 7 1,000 - - - - - - O - - - - - - - O Oo - - - -

Daqing PC Daqing, Heilong. 6 600 - - - - - - - - - - - -

Dushanzi PC Dushanzi, Xinjiang 6 220 - - - - - - - - MMM MMMM M - - - - -

Dushanzi, Xinjiang 6 1,000 - - - - - - - - MMM MMMM - - -

Fujian Ref & Chem Quanzhou, Fujian 5 800 - - - - RRRR RRRR - - - - - -

Fushun PC Fushun, Liaoning 7 180 - - - - - MMMM - - - - - -

Guangzhou PC Guangzhou, Guangdong 4 200 - - - MM MMM - - - - - - - - - -

Jilin Chemical Jilin, Jilin 7 150 - - - - - - MM MM - - - - - - - -

Jilin, Jilin 7 700 - - - - - - - - - - - -

Lanzhou PC Lanzhou, Gansu 6 240 - - - - - MMMM - - - - - -

Lanzhou, Gansu 6 450 - - - - - - - - - - - -

Liaoyang PC Liaoyang, Liaoning 6 200 - - - - - - - - - - - -

Maoming PC Maoming, Guangdong 7 380 M - - - - - - RRRR RRRR - - - - - MMMM

Maoming, Guangdong 7 620 - - - - RRRM Mm - - - - - - - -

Panjin Ethylene Panjin, Liaoning 4 160 - - - - - - - - - - - -

Panjin, Liaoning 4 450 - - - - - - - - - - - -

Qilu PC Zibo, Shandong 7 510 - - - - RRRR RRRR - - - - - -

Zibo, Shandong 7 350 - - - - RRRR RRRR - - - - - -

Secco Caojing, Shanghai 5 1,200 - - - - RRRR RRRR - MMM - - OOO - - -

Shanghai PC Jinshan, Shanghai 7 150 - - - - mMMM RRRR - - - - - -

Jinshan, Shanghai 7 700 - - - - RRRR RRRR - - RRRR RR - - - -

Shenyang Paraffin Shenyang, Liaoning 9 150 - - - - - - - - - - - -

SINOPEC Tianjin PC Tianjin, Tianjin 4 200 - - - - RRRR RRRR - - - - - -

SINOPEC/SABIC JV Tianjin, Tianjin 5 1,000 - - - - RRRR RRRR - - - - - -

Yangzi PC Nanjing, Jiangsu 5 450 - - - - RRRR RRRR - - - - - -

Nanjing, Jiangsu 5 350 - - - - RRRR RRRR - - - - - -

Yanshan PC Fangshan, Beijing 5 820 - - - - RRRR RRRR - - - MM MM - - - - -

Zhongyuan PC Puyang, Henan 4 200 - - - - mMMM MMM - - - - - - -

Puyang, Henan 10 100 CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC - - -

ZRCC Ningbo, Zhejiang 5 1,000 - - - - RRRR RRRR - - - - - -

Total China Capacity 15,642 1315 1199 1327 1285 1327 1285 1327 1327 1285 1336 1293 1336Total Capacity Lost 1,453 60 43 29 5 121 145 47 187 217 158 203 237

Percentage Lost 9.3% 4.6% 3.6% 2.2% 0.4% 9.1% 11.3% 3.6% 14.1% 16.9% 11.8% 15.7% 17.7%

Scheduled Outages 625 56 38 24 - 41 66 22 187 137 21 - 32Unplanned Outages (Due to operational reasons) 187 - - - - 12 10 25 - 79 27 14 20Market Outages (Due to economic reasons) 641 5 5 5 5 68 70 - - - 110 189 184Forecast period assumes a forecast of unplanned and market outages.

M = General Maintenance & Repair O = Operational Problem I = Plant Idled(1) Ethane (4) EPB/Naphtha (7) Naphtha/Gas Oil/Residues R = Reduced Operating Rates A = Accident X = Expansion(2) Ethane/Propane (5) Naphtha (9) Recovery from FCC/DCC Unit C = Under Construction/ Not Commercially Ready(3) E/P/B (6) EPB/Naphtha/Gas Oil/Residues (10) Methanol to Olefins (Upper case letter indicates 1 week duration. Lower case letter indicates 4 days or less.)

Note : Unplanned outages include both mechanical and business driven outages

2011 ETHYLENE OPERATING SCHEDULE FOR CHINA(000 Metric Tons)

CHINA

Process ID

Novem

ber 10, 2011 / Issue No. 047

Page 19


thylene Plant O

PS



Idemitsu Kosan Chiba 5 415 - - - - - M MMMM MMM - - - - - - - oO - -Tokuyama 5 686 - - - - - - - - - - - -

JX Nippon Oil & Energy Corp.Kawasaki 5 440 - - - AAA - - - - - O - - - - - -Keiyo Ethylene Chiba 5 768 - - - a - - - - - - - - - - -Maruzen Chiba 5 525 - - - AAA A - - - - - - O - - - - - - -Mitsub. Chemical Corp. Kashima, No.2 4 450 - - - AAA AAAA AAA - - - - MMMM MM - - - -

Kashima, No.1 4 375 - - - AAA AAAA AAMM MMMM - - - - - -Mizushima 4 360 - - - - - - MM MMMM - - - - - -

Mitsui Chemicals Chiba 5 612 ROo - - - R - - - - - MMMM - - - - -Osaka PC Sakai 4 460 - - - - - - - - - - - -Sanyo PC Mizushima 5 458 - - - - - - - - - - - -Showa Denko Oita 5 691 - - - - RR R - - - - - - - - - - -Sumitomo Chem. Chiba 5 415 - - - RRR - - - - - MMMM MM - - - -TonenGeneral Kawasaki 5 540 - - - - - - OO - - - - - - -TOSOH Yokkaichi 5 527 - - - - - - - - - - - -

Honam PC Daesan 5 1,000 - - - - - - - - - - MMM M - - - -Yeosu 5 750 - - - Mm - - - - - - - - - -

KPIC Onsan 5 470 - - - MMMM OO - - - - - - - - -LG Chem Daesan 5 900 - - - xXX XXO - - - o - - - - - - - o - - -

Yeosu 5 1,000 - - o - - - - - - - - - - - -Samsung Total PC Daesan 5 1,000 - - - - - - X XXX - - - - - - - -SK Energy Chemical Ulsan 5 190 - - - - - - - - - - - -

Ulsan 5 670 - - - - - - - - - - - -YNCC Yeosu 5 850 - - - - O RRR - mMMM M - - - - - - R - - - - - - O O - - - -

Yeosu 5 450 - - - - - - - - - - - -Yeosu 5 550 - ORR RRRR RRRR - - - - - - - - -

CPC-Taiwan Lin Yuan, Kaohsiung, No.5 7 500 - - - - - - RRRR - - MM MMM - - - -Lin Yuan, Kaohsiung, No.3 5 230 - - - MMMM M - - - - RRRR - - - - -Lin Yuan, Kaohsiung, No.4 7 385 - - - - R RRRR RRRR RRRR RRRR OO - - - - - - mMMM

FPCC Mai Liao, No.1 5 700 - - - - RRR RoOO OOOO OOOO OOOO OOOR RR - - - -Mai Liao, No.2 5 1,035 - - - - RRR RRRR RRRR RRRR - - - - -Mai Liao, No.3 5 1,200 - - - - RRR RRRR RRRR RRRR - - MM MMMM MM - - - -

Total Northeast Asia Capacity 19,554 1,645 1,486 1,645 1,592 1,657 1,616 1,670 1,670 1,616 1,670 1,616 1,670Total Capacity Lost 2,547 21 19 188 307 224 196 175 266 308 309 273 263

Percentage Lost 13.0% 1.3% 1.3% 11.4% 19.3% 13.5% 12.1% 10.5% 15.9% 19.0% 18.5% 16.9% 15.8%

Scheduled Outages 946 - - 40 203 115 56 49 79 204 150 25 25Unplanned Outages (Due to operational reasons) 761 21 19 148 91 93 103 82 67 47 34 31 25Market Outages (Due to economic reasons) 839 - - - 13 16 37 45 120 56 124 217 213Forecast period assumes a forecast of unplanned and market outages.

M = General Maintenance & Repair O = Operational Problem I = Plant Idled(1) Ethane (4) EPB/Naphtha (7) Naphtha/Gas Oil/Residues R = Reduced Operating Rates A = Accident X = Expansion(2) Ethane/Propane (5) Naphtha (9) Recovery from FCC/DCC Unit (Upper case letter indicates 1 week duration. Lower case letter indicates 4 days or less.)(3) E/P/B (6) EPB/Naphtha/Gas Oil/Residues Note : Unplanned outages include both mechanical and business driven outages

Process ID

2011 ETHYLENE OPERATING SCHEDULE FOR NORTHEAST ASIA EXCL. CHINA(000 Metric Tons)

JAPAN

SOUTH KOREA

TAIWAN

Novem

ber 10, 2011 / Issue No. 047

Page 20


thylene Plant O

PS



Chandra Asri PC Serang, W. Java 5 590 RRRR RRRR - - - - - - - Oo - MMMM MM - - -

Eth. Malaysia Kerteh, Terengganu 1 400 - - - - MM MM - - - RRR - - - - - OO - - -

OPTIMAL Olefins Kerteh, Terengganu 2 600 - - - - - - - - - - RR - - -

Titan Petchem Pasir Gudang, Johor, No.1 5 289 - - - - - - - - M MMm - - - - - - o - -

Pasir Gudang, Johor, No.2 5 434 - - - - - - - - - - - -

ExxonMobil Pulau Ayer Chawan, 7 875 - - - - - - - - - - - -

PCS Pulau Ayer Merbau, No.1 4 465 - - - - - - - - - RR - - - -

Pulau Ayer Merbau, No.2 4 615 - - - - - - - - - M MMMM - RR - - - -

Shell Chemical Pulau Bukom, 7 800 RRRR RRmM MMoO OOOO OOOR RRRR RRRR MMMM MMRR RRRR RRRR RRRR

IRPC Rayong City, Rayong 7 350 - - - - - - - - - - MMMM -

MOC Map Ta Phut, Rayong 5 900 - - - - - - - R RR - - - - - - - -

PTT Chemical Map Ta Phut, Rayong 3 463 - - - - - - - - R RR - - - - - - -

Map Ta Phut, Rayong 1 400 - - - - - - - - R RR - - - - - - -

Map Ta Phut, Rayong 4 515 - - - - RRRR RRRR RRRR - - - - -

PTT Polyethylene Map Ta Phut, Rayong 1 1,000 RRRR RRRR RRRR RRRR - - - - R - - MM MMMm - - - -

Rayong Olefins Map Ta Phut, Rayong 5 800 - - - - - - - - - - - -

Huntsman Austrl W. Footscray, Vic 1 32 RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR

Qenos Altona, Vic 1 122 - - - - - - - - - - - -

Altona, Vic 3 80 - - - - - - - - - - - -

Botany, NSW 4 270 RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR

Total Southeast Asia Capacity 10,000 849 767 849 822 849 822 849 849 822 849 822 849Total Capacity Lost 1,342 54 55 102 108 82 69 132 205 90 146 182 118

Percentage Lost 13.4% 6.4% 7.1% 12.0% 13.1% 9.7% 8.3% 15.6% 24.1% 10.9% 17.2% 22.1% 13.9%

Scheduled Outages 478 - 20 39 20 - 5 79 181 33 44 58 -Unplanned Outages (Due to operational reasons) 380 33 17 27 69 60 34 34 12 9 19 42 25Market Outages (Due to economic reasons) 483 21 18 36 20 22 30 19 11 48 83 82 93Forecast period assumes a forecast of unplanned and market outages.

M = General Maintenance & Repair O = Operational Problem I = Plant Idled(1) Ethane (4) EPB/Naphtha (7) Naphtha/Gas Oil/Residues R = Reduced Operating Rates A = Accident X = Expansion(2) Ethane/Propane (5) Naphtha (9) Recovery from FCC/DCC Unit (Upper case letter indicates 1 week duration. Lower case letter indicates 4 days or less.)(3) E/P/B (6) EPB/Naphtha/Gas Oil/Residues Note : Unplanned outages include both mechanical and business driven outages

Process ID

2011 SOUTHEAST ASIA ETHYLENE OPERATING SCHEDULE(000 Metric Tons)

INDONESIA

MALAYSIA

SINGAPORE

THAILAND

AUSTRALIA

Novem

ber 10, 2011 / Issue No. 047

Page 21

Asian Market Report Light OlefinsO

n-Purpose P

ropylene Plant O

PS



Baotou Shenhua Baotou, Inner Mongolia Methanol to Olefins 300 RRRR RRRR RRRR RRRR RRRR RRRR RMMM MMM - - - - -

Datang Int'l Power Duolun, Inner Mongolia Methanol to Propylene 500 CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC - -

Jilin Chemical Jilin, Jilin Olefin Cracking 74 - - - - - - - - - - - -

Secco Caojing, Shanghai Metathesis 150 - - - - - - - - - - - -

Shenhua Ningmei Ningdong, Ningxia Methanol to Propylene 500 CCCC CCCC CCCC CCCC - - - - - - - -

Zhongyuan PC Puyang, Henan Methanol to Olefins 100 CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC CCCC - - -

Chiba Propylene JV Chiba Metathesis 150 - - - - - M MMMM MMM - - - mMM MMMM - - - -

JX Nippon Oil & Energy Corp.Kawasaki Metathesis 140 - - - AAA - - - - - - MMM - - -

Mitsub. Chemical Corp. Kashima Metathesis 150 - - - - - - - - - - - -

Osaka PC Sakai Metathesis 140 - - - - - - - - - - - -

Sanyo PC Mizushima Olefin Cracking 50 - - - - - - - - - - - -

Hyosung Corp. Ulsan C3 Dehydro-Poly. grade 165 - - - - - - - - - - - -

KPIC Onsan Metathesis 110 - - - - - m MMMM m - - - - - - - - - -

LG Chem Yeosu Metathesis 120 - - - - - - - - - - - -

Samsung Total PC Daesan Metathesis 206 - - - - - - - - - - - -

Tae Kwang Ulsan C3 Dehydro-Poly. grade 250 - - RRRR RRRO o - - - - - MMMM - - - -

FPCC Mai Liao Metathesis 250 - - - MMM MMMM MM - - - - AAAA AAA - - - -

Pertamina Balongan, W. Java Metathesis 190 - - - - - - - - - - - -

Petronas Kuantan, Pahang C3 Dehydro-Poly. grade 300 - - - - - - - - - - - -

PP Malaysia Kuantan, Pahang C3 Dehydro-Poly. grade 80 - - - - - - - - - - - -

Titan Petchem Pasir Gudang, Johor Metathesis 130 - - - - - - - - - - - -

PCS Pulau Ayer Merbau Metathesis 200 - - - - - - - - - M MMMM - - - -

HMC Polymers Map Ta Phut, Rayong C3 Dehydro-Poly. grade 310 - - - - - - - - - - - -

MOC Map Ta Phut, Rayong Metathesis 300 RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR - - -

PTT Chemical Map Ta Phut, Rayong C3 Dehydro-Poly. grade 100 - - - - - - - - - - - -

Total Asia Capacity 4215 302 273 324 313 366 354 366 366 354 375 404 417Total Capacity Lost 352 10 12 52 57 32 10 42 91 22 8 7 10

Percentage Capacity Lost 8.4% 3.3% 4.4% 16.0% 18.2% 8.7% 2.8% 11.4% 24.8% 6.2% 2.1% 1.8% 2.5%

Scheduled Outages 178 - - 16 40 14 - 36 65 - 8 - -Unplanned Outages 174 10 12 36 17 18 10 6 26 22 - 7 10Forecast period assumes a forecast of unplanned outages.

M = General Maintenance & Repair O = Operational Problem I = Plant IdledR = Reduced Operating Rates A = Accident X = ExpansionC = Under Construction/ Not Commercially Ready(Upper case letter indicates 1 week without production. Lower case letter indicates 4 days or less.)

2011 ON-PURPOSE PROPYLENE PLANT OPERATING SCHEDULE FOR ASIA(000 Metric Tons)

NORTHEAST ASIA

SOUTHEAST ASIA

Note: Unplanned outages include both mechanical and business driven outages

Novem

ber 10, 2011 / Issue No. 047

Page 22


Revised November 10, 2011

NORTHEAST ASIA ETHYLENE QUARTERLY SUPPLY/DEMAND

2010 2011 2012 AGR(%)Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 10 - 11 11 - 12

Actual Actual Forecast Actual ForecastCapacity

Nameplate 8,154 8,541 8,744 8,798 8,603 8,747 8,880 8,906 8,982 9,058 9,200 9,200 34,236 35,136 36,440 2.6 3.7Effective 7,517 7,802 8,101 8,340 8,258 7,957 7,901 8,499 8,649 8,442 8,507 8,946 31,761 32,615 34,545 2.7 5.9

Operating RateNameplate 91.3 89.9 94.8 96.6 100.3 91.5 88.5 83.8 88.8 93.2 92.5 97.2 93.2 91.0 92.9Effective 99.0 98.4 102.3 101.8 104.5 100.6 99.5 87.8 92.2 100.0 100.0 100.0 100.4 98.0 98.0

SupplyProduction 7,442 7,677 8,288 8,495 8,630 8,006 7,859 7,462 7,974 8,442 8,507 8,946 31,902 31,958 33,869 0.2 6.0Imports 339 307 351 423 365 338 462 459 607 352 392 191 1,419 1,624 1,542

Total Supply 7,781 7,984 8,639 8,918 8,996 8,344 8,321 7,921 8,580 8,794 8,899 9,138 33,321 33,582 35,411 0.8 5.4

Alpha Olefins 30 30 30 30 31 31 31 31 35 35 35 35 119 125 141 4.7 13.0Ethylbenzene 759 767 899 939 1,008 875 862 857 909 934 981 987 3,364 3,601 3,811 7.0 5.8EDC 877 872 1,015 1,065 1,086 1,036 1,168 926 980 1,039 1,062 1,045 3,830 4,216 4,125 10.1 (2.2)Ethylene Oxide 977 919 1,229 1,226 1,422 1,256 1,169 1,197 1,275 1,299 1,340 1,262 4,351 5,044 5,177 15.9 2.6PE 4,282 4,723 4,651 4,818 4,706 4,338 4,398 4,276 4,573 4,754 4,860 4,942 18,475 17,719 19,129 (4.1) 8.0Vinyl Acetate 143 149 146 160 167 170 170 163 190 190 192 192 597 670 763 12.1 14.0Others 326 326 330 330 307 305 308 308 309 309 316 312 1,312 1,229 1,246 (6.4) 1.4

Domestic Demand 7,393 7,787 8,301 8,568 8,727 8,011 8,107 7,759 8,271 8,559 8,787 8,776 32,049 32,603 34,392 1.7 5.5Exports 338 264 279 330 293 329 355 151 251 235 347 362 1,212 1,128 1,195

Total Demand 7,731 8,051 8,580 8,898 9,020 8,340 8,462 7,909 8,522 8,794 9,134 9,138 33,260 33,732 35,588 1.4 5.5

Inventory Change 49 (67) 58 20 (24) 4 (141) 12 59 - (235) - 61 (150) (176) *Effective Capacity = Nameplate Capacity - Planned and Unplanned Losses

DEM

AN

D

(Thousand Metric Tons)2010 2011 2012

SUPP

LY

Ethylene Q

uarterly Supply/D

emand

For China, Japan, South Korea and Taiwan Ethylene Quarterly Supply/Demand Balances, please log on to http://www.cmaiglobal.com with your username and password, and proceed to the “Supplement data section ”

Novem

ber 10, 2011 / Issue No. 047

Page 23


Revised November 10, 2011

SOUTHEAST ASIA ETHYLENE QUARTERLY SUPPLY/DEMAND


Estimate Est. Forecast Est. ForecastCapacity

Nameplate 2,145 2,493 2,521 2,521 2,466 2,493 2,521 2,521 2,486 2,486 2,765 2,765 9,679 10,000 10,503 3.3 5.0Effective 1,878 2,160 2,155 2,173 2,330 2,306 2,163 2,360 2,401 2,444 2,719 2,719 8,366 9,159 10,283 9.5 12.3

Operating RateNameplate 83.9 82.2 80.8 81.8 91.4 89.6 84.5 86.2 86.0 89.3 88.6 87.7 82.1 87.9 87.9Effective 95.8 94.9 94.5 94.9 96.8 96.9 98.5 92.0 89.1 90.8 90.2 89.2 95.0 96.0 89.8

SupplyProduction 1,799 2,049 2,037 2,062 2,255 2,234 2,130 2,172 2,139 2,220 2,451 2,425 7,947 8,791 9,235 10.6 5.0Imports 267 250 237 312 259 288 227 230 304 315 289 286 1,066 1,005 1,195

Total Supply 2,066 2,299 2,274 2,375 2,514 2,522 2,357 2,402 2,443 2,535 2,740 2,711 9,014 9,796 10,430 8.7 6.5

Alpha Olefins 1 1 1 1 1 1 1 1 1 1 1 1 4 4 3 14.1 (24.8)Ethylbenzene 140 141 143 142 117 140 142 128 139 139 140 140 566 527 559 (6.9) 6.0EDC 148 156 155 157 160 155 150 153 171 172 174 174 615 618 691 0.5 11.9Ethylene Oxide 315 310 307 301 298 265 296 294 263 269 273 273 1,234 1,153 1,078 (6.6) (6.5)HDPE 652 714 716 726 845 838 744 759 756 811 838 819 2,807 3,185 3,223 13.4 1.2

LDPE 306 320 334 355 318 327 306 327 321 330 332 332 1,316 1,278 1,315 (2.8) 2.9LLDPE 361 407 400 412 536 509 486 542 556 573 714 716 1,579 2,074 2,558 31.3 23.4Vinyl Acetate 18 18 18 18 18 19 19 19 20 20 21 21 71 75 82 5.3 9.5Others 79 80 81 81 122 123 116 124 127 119 128 128 321 486 503 51.2 3.5

Domestic Demand 2,019 2,147 2,154 2,193 2,415 2,376 2,260 2,348 2,354 2,434 2,621 2,603 8,513 9,399 10,012 10.4 6.5Exports 40 109 150 114 99 109 96 55 91 101 119 108 414 358 419

Total Demand 2,060 2,256 2,304 2,307 2,515 2,484 2,356 2,402 2,444 2,535 2,740 2,711 8,928 9,757 10,431 9.3 6.9

Inventory Change 6 43 (30) 67 (0) 38 1 - (1) - - - 86 39 (1) *Effective Capacity = Nameplate Capacity - Planned and Unplanned Losses

DEM

AN

D

(Thousand Metric Tons)2010 2011 2012

SUPP

LY

Ethylene Q

uarterly Supply/D

emand

For Australia, Indonesia, Malaysia, Philippines, Singapore and Thailand Ethylene Quarterly Supply/Demand Balances, please log on to http://www.cmaiglobal.com with your username and password, and proceed to the “Supplement data section ”

Novem

ber 10, 2011 / Issue No. 047

Page 24

Asian Market Report Light OlefinsRevised November 10, 2011

NORTHEAST ASIA PG/CG PROPYLENE QUARTERLY SUPPLY/DEMAND


Actual Actual Forecast Actual ForecastPropylene Capacity 7,077 7,155 7,234 7,234 7,580 7,664 7,748 7,748 8,048 8,119 8,208 8,208 28,700 30,740 32,584 7.1 6.0Ethylene Production 7,442 7,677 8,288 8,495 8,630 8,006 7,704 8,052 8,297 8,449 8,748 8,651 31,902 32,392 34,146 1.5 5.4 P/E Ratio 0.550 0.548 0.549 0.542 0.534 0.533 0.536 0.535 0.522 0.522 0.522 0.522 0.547 0.534 0.522Propylene Production

Steam Crackers 4,094 4,209 4,551 4,602 4,605 4,270 4,129 4,307 4,333 4,413 4,571 4,520 17,455 17,311 17,838 (0.8) 3.0Catalytic Crackers 1,757 1,816 1,635 1,648 1,892 1,694 1,640 1,837 2,038 2,021 2,102 2,175 6,856 7,062 8,336 3.0 18.0Dehydrogenation 86 103 105 105 98 94 83 91 83 85 100 170 399 366 438 (8.2) 19.6Other 451 410 396 480 549 604 631 754 691 697 704 700 1,736 2,539 2,791 46.2 9.9

Total Production 6,486 6,609 6,763 6,837 7,017 6,598 6,483 6,989 7,145 7,215 7,477 7,565 26,696 27,086 29,402 1.5 8.6Imports 550 517 486 646 645 465 544 362 594 504 426 306 2,199 2,016 1,829

Total Supply 7,036 7,126 7,249 7,484 7,661 7,063 7,026 7,351 7,739 7,719 7,903 7,870 28,895 29,102 31,231 0.7 7.3

Acrylic Acid 311 311 314 314 311 330 332 332 356 356 360 360 1,251 1,305 1,433 4.3 9.8 Acrylonitrile 609 772 785 764 703 780 667 727 660 660 667 667 2,931 2,877 2,654 (1.8) (7.8) Cumene 390 402 393 351 443 373 384 446 439 439 445 444 1,537 1,645 1,767 7.0 7.4 Isopropanol 85 85 86 86 82 85 92 92 99 99 100 100 342 350 399 2.3 14.1 2-Ethyl Hexanol 295 316 341 331 294 304 342 347 356 356 360 360 1,283 1,287 1,432 0.3 11.3 n-Butanol 212 212 214 214 198 216 223 224 236 236 238 238 852 862 947 1.1 10.0 Polypropylene 4,294 4,237 4,235 4,535 4,583 4,122 4,232 4,419 4,787 4,768 4,872 4,882 17,301 17,356 19,309 0.3 11.3 Propylene Oxide 384 359 376 413 400 411 421 427 421 421 426 426 1,532 1,658 1,695 8.3 2.3 Others 87 87 88 88 82 90 90 90 94 94 95 95 350 353 376 0.9 6.6

Domestic Demand 6,667 6,782 6,832 7,098 7,096 6,709 6,783 7,104 7,448 7,429 7,564 7,572 27,378 27,692 30,013 1.1 8.4Exports 498 416 340 536 549 397 347 247 291 290 339 298 1,790 1,541 1,218

Total Demand 7,165 7,198 7,172 7,634 7,646 7,106 7,129 7,351 7,739 7,719 7,903 7,870 29,169 29,233 31,231 0.2 6.8

Inventory Change (128) (72) 77 (150) 16 (43) (103) - - - - - (273) (130) -

DEM

AN

D

(Thousand Metric Ton)2010 2011 2012

SUPP

LY

Propylene Q

uarterly Supply/D

emand

For China, Japan, South Korea and Taiwan Propylene Quarterly Supply/Demand Balances, please log on to http://www.cmaiglobal.com with your username and password, and proceed to the “Supplement data section ”

Novem

ber 10, 2011 / Issue No. 047

Page 25

Asian Market Report Light OlefinsRevised November 10, 2011

SOUTHEAST ASIA PG/CG PROPYLENE QUARTERLY SUPPLY/DEMAND


Estimate Est. Forecast Est. ForecastPropylene Capacity 1,328 1,551 1,568 1,568 1,646 1,660 1,678 1,678 1,711 1,720 1,739 1,739 6,015 6,663 6,908 10.8 3.7Ethylene Production 1,799 2,049 2,037 2,062 2,255 2,234 2,130 2,172 2,139 2,220 2,451 2,425 7,947 8,791 9,235 10.6 5.0 P/E Ratio 0.365 0.397 0.386 0.386 0.375 0.373 0.370 0.376 0.368 0.366 0.379 0.380 0.384 0.373 0.373Propylene Production

Steam Crackers 657 814 787 797 845 834 787 817 788 812 929 923 3,054 3,283 3,452 7.5 5.1Catalytic Crackers 217 238 253 277 245 258 259 244 282 286 285 288 985 1,006 1,141 2.1 13.4Dehydrogenation 77 92 86 121 89 146 136 146 161 153 155 163 376 517 632 37.4 22.2Other 118 155 202 232 214 204 198 215 205 207 207 208 707 831 827 17.6 (0.5)

Total Production 1,069 1,298 1,328 1,427 1,393 1,442 1,380 1,422 1,436 1,458 1,577 1,581 5,122 5,637 6,052 10.1 7.4Imports 95 61 97 102 106 108 111 99 73 41 50 40 354 424 205

Total Supply 1,164 1,359 1,424 1,528 1,498 1,550 1,491 1,521 1,509 1,499 1,627 1,622 5,476 6,061 6,257 10.7 3.2

Acrylic Acid 41 42 42 42 41 41 41 41 43 43 44 44 166 165 173 (0.9) 5.1 Acrylonitrile - - - - - - - - - - - - - - - N/A N/A Cumene 61 61 62 62 67 67 68 68 68 68 69 69 246 271 275 9.9 1.5 Isopropanol - - - - - - - - - - - - - - - N/A N/A 2-Ethyl Hexanol 38 38 39 39 41 41 34 37 38 38 38 38 154 153 152 (0.5) (0.7) n-Butanol 55 55 56 56 57 58 66 54 52 52 52 52 222 236 208 6.4 (11.9) Polypropylene 911 938 966 978 1,019 1,056 1,039 1,034 1,115 1,116 1,235 1,235 3,793 4,148 4,701 9.3 13.3 Propylene Oxide 83 84 85 85 87 87 73 161 131 131 133 133 338 407 528 20.7 29.6 Others 6 6 6 6 6 6 6 6 7 7 7 7 24 25 27 4.8 4.5

Domestic Demand 1,195 1,225 1,256 1,268 1,319 1,358 1,327 1,402 1,454 1,455 1,577 1,577 4,944 5,406 6,064 9.3 12.2Exports 62 133 142 134 147 134 181 120 54 43 48 43 472 581 188

Total Demand 1,257 1,358 1,398 1,402 1,466 1,492 1,508 1,522 1,508 1,498 1,625 1,620 5,415 5,987 6,252 10.6 4.4

Inventory Change (93) 1 27 126 32 59 (17) (0) 0 1 1 1 60 74 4

DEM

AN

D(Thousand Metric Ton)

2010 2011 2012

SUPP

LY

Propylene Q

uarterly Supply/D

emand

For Australia, Indonesia, Malaysia, Philippines, Singapore and Thailand Propylene Quarterly Supply/Demand Balances, please log on to http://www.cmaiglobal.com with your username and password, and proceed to the “Supplement data section ”

Novem

ber 10, 2011 / Issue No. 047

Page 26


Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11

Ethylene -76 -51 -69 -86 -87 -102 Ethylene -32 -49 -86 -36 -47 -53Vinyls -63 -43 -32 -24 -28 -53 Vinyls 2 0 2 -3 2 2Styrenics -112 -95 -70 -86 -95 -125 Styrenics -1 -1 1 1 2 3Polyethylene -342 -246 -226 -213 -240 -320 Polyethylene -14 -22 -18 -17 -15 -16Glycol -399 -318 -340 -388 -330 -415 Glycol -18 -17 -19 -20 -13 -24Others -24 -19 -23 -20 -10 -24 Others 7 11 3 -1 5 0Net Trade -1,016 -772 -761 -818 -790 -1,041 Net Trade -55 -78 -117 -77 -66 -88

Ethylene 47 49 38 43 55 63 Ethylene 12 13 10 11 4 3Vinyls 40 38 34 33 30 40 Vinyls 3 0 -5 -7 -3 -3Styrenics 42 23 26 25 31 36 Styrenics -4 -3 -3 -1 -4 1Polyethylene 13 7 2 2 2 2 Polyethylene 1 -3 -12 -10 -2 -3Glycol 9 -7 -13 -7 1 4 Glycol 10 1 3 8 3 16Others -23 -23 -16 -23 -18 -28 Others -3 -4 -2 -3 -2 -4Net Trade 126 87 71 72 101 116 Net Trade 19 4 -10 -2 -4 10

Ethylene 15 25 42 67 65 73 Ethylene -3 -11 -19 -8 18 17Vinyls -5 0 -4 -1 2 6 Vinyls 0 0 0 0 0 0Styrenics 9 0 7 21 27 29 Styrenics 21 30 17 22 24 21Polyethylene 87 64 67 79 90 101 Polyethylene 31 14 18 35 27 25Glycol -8 -7 3 -2 3 -5 Glycol 37 57 12 39 42 48Others -8 -9 -9 -6 -10 -7 Others 1 -10 4 -3 -2 -7Net Trade 90 73 106 156 176 196 Net Trade 88 81 32 85 109 104

Ethylene 13 -10 2 -6 -27 -53 Ethylene -10 1 3 8 10 -4Vinyls 26 11 11 -4 4 -1 Vinyls -6 -5 -12 -5 1 -3Styrenics 27 17 24 15 13 9 Styrenics -1 1 1 1 1 2Polyethylene 16 14 14 18 31 16 Polyethylene 82 83 83 77 82 73Glycol 40 55 56 23 12 51 Glycol -14 -12 -12 -19 -19 -18Others 8 6 1 1 4 4 Others -3 -10 -17 -9 -5 -23Net Trade 129 93 108 48 36 26 Net Trade 47 58 46 53 70 27

South Korea

Taiwan

ETHYLENE NET EQUIVALENT TRADE TABLENortheast Asia Southeast Asia

Indonesia

Singapore

Thailand

Malaysia

China

Japan

Ethylene N

et Equivalent Trade

Novem

ber 10, 2011 / Issue No. 047

Page 27


Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11

Propylene -132 -104 -74 -97 -158 -146 Propylene -15 -12 -13 -8 -13 -10Polypropylene -433 -312 -291 -315 -391 -448 Polypropylene -70 -88 -86 -83 -70 -60Acrylonitrile -61 -59 -44 -46 -31 -41 Acrylonitrile 0 -1 -1 -2 -1 -1Cumene 1 -1 -1 -2 -1 -1 Cumene 0 0 0 0 0 0Others -122 -88 -80 -67 -73 -71 Others -2 0 2 1 -6 3Net Trade -748 -563 -490 -529 -653 -706 Net Trade -87 -101 -97 -92 -89 -68

Propylene 69 46 52 42 41 47 Propylene 0 0 0 -3 0 3Polypropylene 44 16 2 2 11 10 Polypropylene 10 8 4 1 -5 5Acrylonitrile 32 32 31 24 30 29 Acrylonitrile -6 -9 -7 -6 -13 -7Cumene 17 14 14 10 16 17 Cumene 0 0 0 0 0 0Others 31 17 17 13 18 21 Others 14 15 11 10 10 18Net Trade 194 125 117 91 115 125 Net Trade 18 14 8 2 -8 19

Propylene 6 -18 23 65 72 63 Propylene -2 -5 -16 -18 3 12Polypropylene 182 167 178 188 216 213 Polypropylene 78 71 66 92 104 100Acrylonitrile 4 11 2 7 9 13 Acrylonitrile 0 0 0 0 0 0Cumene -3 -3 -4 -1 -5 -3 Cumene 0 0 0 0 0 0Others -1 2 -6 -4 -4 -1 Others 19 25 7 21 10 18Net Trade 188 160 194 255 288 286 Net Trade 95 91 57 96 117 129

Propylene 32 38 -15 -26 -7 -46 Propylene 32 25 21 30 23 20Polypropylene 51 51 53 43 58 33 Polypropylene 39 48 41 39 34 58Acrylonitrile -3 10 -1 4 7 -2 Acrylonitrile -18 -14 -14 -14 -12 -8Cumene -9 -4 -6 -7 -5 -6 Cumene 0 0 0 0 0 0Others 20 6 6 4 4 8 Others -7 -11 -8 -8 -9 -6Net Trade 91 101 37 19 58 -13 Net Trade 46 49 40 46 35 65

PROPYLENE NET EQUIVALENT TRADE TABLENortheast Asia Southeast Asia

China

Japan

South Korea

Taiwan

Indonesia

Singapore

Thailand

Malaysia

Propylene N

et Equivalent Trade



2012 World

The - will function as your most versatile

source of manufacturing, marketing, eco-nomic and forecast information.

Clients are entitled to a reasonable amount of consulting time and data requests in the respective product area for a period of one year. Access to CMAI’s online capacity and supply/demand databases is also included. Clients have the ability to access and download in a spreadsheet format the most up-to-date capacity data for the products covered.

Available in book format and CD-ROM format, this an-nual study comprises a truly extensive collec-tion of data derived from CMAI’s own database. To order your copy of CMAI’s 2012 World

, contact CMAI at [email protected].

Data presented over a period of eleven years2006 - 2016

www.cmaiglobal.com

CMAI - Headquarters1401 Enclave Parkway, Suite 500

Houston, TX 77077 USATel: 1-281-531-4660Fax: 1-281-531-9966

Dubai - Düsseldorf - London

New York - Shanghai - Singapore - Bangkok

~

Documents

Asia Light Olefins Monthly