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Polymerscan Volume 32 / Issue 11 / March 18, 2009

Americas and Asian Polymer Spot Price Assessments

FAS Houston US Contract FOT Brazil* CFR FE Asia CFR SE Asia CFR South Asia China
($/mt) dlvd railcar ($/mt) ($/mt) ($/mt) ($/mt) Domestic
(cts/lb) (Yuan/mt)
PVC SUSP 550-560 40.00-41.00 —- 660-670 660-670 —- —-

LDPE G-P 915-926 46.00-47.00 1180-1190 980-990 980-990 —- 8700-8800

LLDPE (Butene) 871-882 43.00-44.00 980-1000 985-995 985-995 1005-1015 8900-9100

HDPE Inj 822-832 43.00-44.00 980-1000 970-980 985-995 960-970 —-

Bmldg 810-820 43.00-44.00 970-990 950-960 965-975 950-960 —-
Film 926-948 47.00-48.00 970-990 950-960 965-975 970-980 8400-8500
Yarn —- —- —- 970-980 985-995 —- —-

PP Homo Inj/Raffia+ 777-799 40.00-41.00 880-890 880-890 890-900 910-920 7900-8000

Fiber —- 38.50-39.50 —- —- —- —- —-
Copol 826-848 —- 980-990 920-930 920-930 920-930 —-
IPP Film 910-920 910-920 950-960 —-
BOPP 910-920 920-930 920-930 —-

PS G-P 1065-1075 48.00-49.00 —- 950-960 950-960 —- —-

HIPS 1175-1185 53.00-54.00 —- 1060-1070 1060-1070 —- —-
ABS Inj —- 67.00-68.00 —- 1210-1220 1220-1230 —- —-

PET bottle grade 1146-1168# 1213-1235## 934-936 ** 934-936 ** —- —-

Notes: All price assessments reflect spot trades with the exception of US Contract Delivered railcar. * FOT Brazil assessments are for export material via truck to MERCOSUR markets. For Asian
PVC, PS, and ABS, FE Asia refers to China. All Asian polymer assessments are basis L/C 0-30 days Credit differentials calculated using 1 month LIBOR +1.5%. + PP Raffia grade reflects
assessments for Asia only. # US PET bottle grade refers to DDP US West Coast. ## US PET contract price is in $/mt. ** Asian PET prices denote FOB North East Asia (South Korea, China) and
FOB Southeast Asia (Thailand, Indonesia) respectively.

Daily Polymer Assessments Contents

Thursday Friday Monday Tuesday Wednesday Average Polymers
CFR FE Asia ($/mt)
Polyvinyl Chloride 3
HDPE film 930-940 940-950 940-950 950-960 950-960 942.0-952.0 Low Density Polyethylene 4
LDPE 970-980 980-990 970-980 970-980 980-990 974.0-984.0 Linear Low Density Polyethylene 5
LLDPE 970-980 980-990 980-990 980-990 985-995 979.0-989.0
High-Density Polyethylene 6
PP Homo 855-865 860-870 865-875 870-880 880-890 866.0-876.0
Polypropylene 8
FD NWE (Euro/mt)
Polystyrene 9
LDPE 830-840 830-840 830-840 830-840 830-840 830.0-840.0 Acrylonitrile Butadiene Styrene 10
LLDPE 780-790 780-790 780-790 780-790 780-790 780.0-790.0 Polyethylene Terephthalate 11
PP Homo 690-700 690-700 690-700 690-700 690-700 690.0-700.0
FCA Antwerp (Euro/mt) Polymer Feedstocks: Olefins
LDPE 800-810 800-810 800-810 800-810 800-810 800.0-810.0 Ethylene 13
LLDPE 750-760 750-760 750-760 750-760 750-760 750.0-760.0 Ethylene Glycol 14
PP Homo 660-670 660-670 660-670 660-670 660-670 660.0-670.0 Propylene 15
FAS Houston ($/mt) Butadiene 16
LDPE 1025-10471025-1047 992-1014 992-1014 915-926 989.8-1009.6
LLDPE 920-930 920-930 910-930 910-930 871-882 906.2-920.4 Polymer Feedstocks: Aromatics
PP Homo 777-799 777-799 777-799 777-799 777-799 777.0-799.0 Paraxylene 18
Notes: The weekly average represents the average of Thursday through Wednesday of the previous week. Styrene 18

Polymer Feedstocks: Intermediates

FOB Middle East Weekly Polymer Netbacks ($/mt)
Purified Terephthalic Acid 20
Thursday Friday Monday Tuesday Wednesday Average Acrylonitrile 20
HDPE 914-924 924-934 924-934 934-944 934-944 926.0-936.0 Ethylene Dichloride /
LDPE 954-964 964-974 954-964 954-964 964-974 958.0-968.0 Vinyl Chloride Monomer 21
LLDPE 954-964 964-974 964-974 964-974 969-979 963.0-973.0
Dimethyl Terephthalate 22
PP Raffia/Injection 839-849 844-854 849-859 854-864 864-874 850.0-860.0
Notes: FOB Middle East netback denotes CFR Far East Asia assessments minus the prevailing container freight rate from News 22
Al-Jubail to Shanghai for a standard 20-foot container.

The McGraw Hill Companies

 PLATTS POLYMERSCAN VOLUME 32 / ISSUE 11 / MARCH 18, 2009

Euro Contract Assessments (Euro/mt)

Germany Holland Italy France Spain Britain* FD NWE CP**

PVC susp 695-715 695-715 680-705 695-715 665-685 620-645 911-938

LDPE G-P 890-900 890-900 890-900 890-900 890-900 820-825 1167-1180

LLDPE C4 (Blown film) 890-900 890-900 890-900 890-900 890-900 810-815 1167-1180
LLDPE C4 (Cast stretch film) 900-910 900-910 900-910 900-910 900-910 819-824 1180-1193
LLDPE C6 (Blown film) 950-960# — — — — — —
LLDPE C6 (Cast stretch film) 950-960# — — — — — —

HDPE Inj 890-900 890-900 890-900 890-900 890-900 805-810 1167-1180

HDPE Bmldg 880-890 880-890 880-890 880-890 880-890 810-815 1154-1167
HDPE Film 860-870 860-870 860-870 860-870 860-870 795-800 1128-1141
HDPE HMW 2-5 900-905 900-905 900-905 900-905 900-905 826-830 1180-1187
HDPE HMW 5-10 895-900 895-900 895-900 895-900 895-900 821-825 1174-1180

PP Homo Inj 800-810 800-810 800-810 800-810 800-810 735-745 1049-1062

PP Copol 840-850 840-850 840-850 840-850 840-850 770-780 1101-1115

GPPP 885-895 885-895 885-895 885-895 885-895 830-839 1161-1174

HIPS 933-943 933-943 933-943 933-943 933-943 875-884 1223-1236
EPS 915-925 915-925 915-925 915-925 915-925 858-868 1200-1213

ABS GP/Nat 1170-1180 — 1170-1180 1170-1180 1170-1180 1097-1107 1534-1547

ABS Ave color 1435-1445 — 1435-1445 1435-1445 1435-1445 1346-1355 1882-1895
ABS Auto black 1220-1230 — 1220-1230 1220-1230 1220-1230 1144-1154 —-

PET bottle grade 1005-1025# — 985-1005 1005-1025 1005-1025 920-940

PET bottle grade — — — — — 981-1002##
APET film grade 975-995#
Notes: *FD Britain = FD UK, with assessments in British Pounds per metric ton. **FD NWE CONTRACT PRICE denotes FD Germany converted into US dollars. # LLDPE C6, PET bottle grade, APET
film grade assessments are basis FD NWE in Euro/mt. ## PET bottle grade assessments basis FD UK are in Euro/mt. PET assessments refer to regular business at prices negotiated between
buyers and sellers on a monthly basis. LLDPE C6 denotes products from Ziegler-Natta catalyst.

Platts European Polymer Spot Price Assessments

FOB NWE FD NWE FCA Antwerp CFR Russia* CFR Turkey** FD UK
($/mt) (Eur/mt) (Eur/mt) (Eur/mt) ($/mt) (GBP/mt)

PVC SUSP 665-675 530-560 — 510-530 700-720 —

LDPE G-P 1025-1035 830-840 800-810 860-870 1050-1060 —

LLDPE (Butene) —- 780-790 750-760 820-830 975-985 —

HDPE Inj 955-965 780-790 760-770 850-860 980-990 —

Bmldg 945-955 810-820 780-790 850-860 970-980 —
Film 985-995 805-815 780-790 850-860 1010-1020 —

PP Homo Inj 815-825 690-700 660-670 530-540 840-850 —

PP Raffia — — — — 840-850 —
PP Copol 905-915 740-750 710-720 580-590 930-940 —

PS G-P 785-795 740-750 — — 810-820 —

HIPS 855-865 788-798 — — 880-890 —
EPS 1165-1175 838-848 — — 1190-1200 —
ABS GP/Nat 1225-1235*** 1018-1028 — — —

PET bottle grade — 850-870 — — — 770-820

PET bottle grade — — — — — 821-874#
Recycled PET — 680-700 — — — 630-670
Recycled PET — — — — — 672-714#
Notes: FOB NWE prices are based on exports of 300mt or more. *CFR Russia denotes CFR St Petersburg; ** CFR Turkey denotes CFR Istanbul; *** ABS GP/Nat denotes CFR NWE in $/mt. #
PET bottle grade and Recycled PET assessments for FD UK are in Euro/mt. Recycled PET assessments are for a hot wash flake without food approval.

2 Copyright © 2009, The McGraw Hill Companies

 PLATTS POLYMERSCAN VOLUME 32 / ISSUE 11 / MARCH 18, 2009

POLYMERS
Polyvinyl Chloride Global PP Prices

Europe 1500
($/mt)

The PVC market was seen close to finalising negotiations for CFR FE Asia
the March contract price. The final price is expected to be FD NWE
close to a rollover with the upside capped within a range of 1250 FAS Houston
Eur10-30/mt. Any buyer who has agreed an increase is
reported to have had there contract prices brought up in
1000
line with other buyers rather than a general increase applied
to all buyers. “Those buyers that were at the bottom of the
range for February have been brought up in line with other 750
buyers,” a source at one producer noted. Other sources
noted that the month started with strong claims from
producers that they would be looking for increases upwards 500
16-Oct 11-Nov 04-Dec 02-Jan 29-Jan 23-Feb 18-Mar
of Eur50/mt but the reality has been somewhat different in
trying to achieve these increases. The lack of demand across
Europe has severely undermined the ability for buyers to Foreign exchange
absorb any increase in PVC prices. Although demand in Eur1 to $ 1.3113 £1 to Eur 1.0662
March was reported to have improved compared with
February, the overall level of consumption was still seen as Polymer Spot Freight Rates ex-Middle East ($/mt)
below year-ago levels. As producers have been unable to
From: Middle East Middle East
implement hoped-for increases, they are faced with a To: 25-100 mt >100mt
difficult situation going forward. In February, feedstocks East China 15-20 15-18
South China 15-18 10-15
prices in the form of the monthly ethylene contract price India 23-25 20-23
increased by Eur95/mt to currently stand at Eur675/mt. In Southeast Asia 20-22 18-20
contrast, PVC prices have fallen from Eur885/mt at the start NW Europe 80-90 80-90
Turkey 100-110 100-110
of 2009 to currently stand at Eur705/mt, a fall of over US Gulf 75-80 70-75
Eur150/mt. The fall in PVC prices combined with the rise in Latin America 85-90 80-85
feedstocks costs amounts to a reversal of Eur280/mt for PVC Notes: Please refer to the methodology guide for details on port locations.

producers. The net result has been to squeeze margins for

producers of PVC across Europe, but the rise in ethylene Metals
prices is having little impact on PVC buyers, as previously
Aluminum US Mar 17 cts/lb 63.916
ethylene prices have been falling while PVC prices have Tin US Mar 12 cts/lb 495
been rising. As one distributor commented: “I am buying Tin Europe Mar 13 $/mt 11397-11456
PVC not ethylene.” This rise in production costs had led
many producers to push hard for price rises at the beginning offers from the USA reported at marginally higher levels.
March and the inability to achieve any meaningful increase CFR Turkey prices were reported to have fallen by as much
is a reflection of the poor level of demand. Some market as $40/mt again on the back of cheaper priced products
sources noted the coming spring period may offer some being available from Asian markets. While a seasonal upturn
hope of improvement in overall demand, as activity in the may help to increase volumes, the scale of this upturn may
construction sector would typically see a seasonal upturn. be insufficient to sustain any increase in PVC prices, sources
The hoped-for increase in PVC demand would be an said Wednesday.
increase compared with January and February levels, but is
unlikely to be an increase on year-ago levels, sources said. United States
The level of underlying demand in Germany is particularly April export values out of the US were talked lower this
clouded due to government programs aimed at preventing week with prices talked notionally in the $550-560/mt FAS
redundancies. The scheme involves the government paying Houston range. Even at that level however, sources said
up to 50% of a workers salary in order to prevent job losses buyers were hard to find. Sellers were heard to be working to
while a company adjusts to market conditions. There are hold offers near $570/mt FAS Houston this week, however,
reports that the scheme is being used by the construction buyers were holding out in an effort to get better deals. With
sector leaving many sources unclear as to what will happen slowing buy interest in India and China and weak demand
when the government support is removed. in the spot in North Africa, Europe, and the US, suppliers were likely to
market prices for FD NWE were assessed unchanged at face trouble in selling the same volumes they did in
Eur545/mt with offers from Asia reported at this level and February and March. Sources estimated that India alone saw

3 Copyright © 2009, The McGraw Hill Companies

 PLATTS POLYMERSCAN
between 50,000-60,000 mt of PVC land on its shores
between February and March. As well, direct producer deals
were attributed with dragging prices lower as one major
producer was heard to be aggressively pursuing market share
and pricing out traders in the process. Sources reported that
the producer was offering into Latin America at $610/mt
CIF, a number that would produce a netback of near $520-
530/mt FAS Houston. “We just cannot compete against the
direct producer deals,” said a participant. Meanwhile, on the
domestic front, producers were still working to push
through a 2 cents/lb price hike on domestic contracts.
Producers initially announced a 5 cents/lb increase for
February, however, ultimately took 3 cents and pushed the
remaining 2 cents/lb back to March. Additionally, most
producers had announced a 3 cents/lb increase for April.
Buyers were bearish on the increase, however, given
persistently weak domestic demand. In production news,
Georgia Gulf confirmed that its production at both Lake
Charles, Louisiana and Aberdeen, Mississippi was up and
running. As well, the company has changed the terms of
one if its credit facilities, pushing back covenants with its
lenders until March 2010 while increasing and extending its
accounts receivable securitization until March 2011, the
company announced earlier this week.
Asia
April Chinese imported PVC prices were flat this week.
Offers between $660-700/mt CFR China were reported, and
down to $650/mt CFR China was heard, but unconfirmed.
Some buyers were still holding back and looking for a
number below $650/mt CFR China. Deals were reported
done between $660-690/mt CFR China. A Korean producer
reported selling 6,000 mt of PVC at $690/mt CIF China for
delivery end March/early April, and 10,000 mt for delivery
into Shanghai in April at $690/mt CIF China. An Indian
trader reported selling 200mt at $700/mt CFR China,
Indonesian-origin, delivery March. A Taiwanese supplier
offered and traded April-delivery cargoes at $660/mt CFR
China. The difference in traded prices was due to
antidumping rates between Taiwan and Korea, for delivery
into China. Overall demand remained weak into China,
with transaction volumes into China below levels for the
same period in 2008. Domestic Chinese prices firmed
slightly this week, at around RNB 100-200. Carbide-based
production prices were heard between Yuan 6000-6200/mt
delivered China, while ethylene-based production was Yuan
6200-6400/mt delivered China. Sources estimated that
current carbide production in China is on average at 45-
60% rates. Domestic prices increased following the loss of
benefits offered by the Chinese government for carbide
production the first two-and-a-half months of the year
expired. In India demand remained good, offers from
Taiwan and Korea were heard at $730/mt CFR India. From
Europe the offers were $700/mt CFR India and the offer level
was below $700/mt CFR India from the US. Meanwhile,
Japanese PVC exports were strong in February, rising 2.8%
year on the year to 53,961 mt. On a month-on-month basis,
4 Copyright © 2009, The McGraw Hill Companies
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
exports rose 7.1%. according to data from Japanese Vinyl
Environmental Council officials. On the production side,
Shanghai Chlor-Alkali Chemical’s 410,000 mt/year PVC
plant in Shanghai will undergo a three-week turnaround in
May. Hanwha’s 225,000 mt/year PVC plant in Yeosu, South
Korea, will start a one week planned turnaround next week.
While, Japan’s Taiyo Vinyl is in the middle of a planned
turnaround at its 310,000 mt/year PVC plant in Yokkaichi.
The plant will restart March 24.
Low Density Polyethylene
Europe
Demand in the spot market has flattened out further, trading
sources said this week, with spot prices remaining stable at
Eur830-840/mt FD NWE. Some further attempts to increase
spot prices to Eur850-890/mt FD NWE levels had been made
by traders, though with limited success, market sources said.
“We have very poor sales and it is very difficult to get prices
to Eur850 and above, as there are still sales done at Eur830-
840/mt FD NWE range,” a large-volume trader said. A trader
reported a spot deal at Eur825/mt FD Benelux, while another
reported transacting at Eur850/mt FD Spain. Some traders
noted early attempts by converters to de-stock as the end-
user demand deteriorated in March. Converters reported
prompt-focused business, impacted by short lead times on
orders. “It is very difficult to pass the increases to the end-
user markets, we are all suffering now. Our chances of
recovering the increases are close to zero. While our
utilization rates are weak every converter is seeking
volumes—it is very competitive for orders,” one converter
said. “Every converter is eating in to his own [already very
thin] margin...as a result converters are careful with their
stocks, as the orders are very slow,” another converter said.
While some converters hoped to see a more favorable
environment in April, others expected to see another last
rally in prices, before market starts to see new alternative
supplies in the market in May. Producers, on the other hand,
were looking to recover dents in their margins further in
April, with one stating “Eur10-20/mt increase in April is not
enough, we need another substantial increase in April or we
trim operational rates further. It is better to shut production
than to lose money on every tonne supplied,” he said. Other
producers said that if demand eroded in April, they would
focus on exports once again in a bid to achieve better
netbacks. “Our customers think that prices will fall, but
demand for us is still relatively strong. April is going to be a
crossroad,” another producer said. “We are hardening our
position now, we had to move more aggressively on the
prices for extra volumes requested in the second half of
March,” a fourth producer said. Gross values reported this
were range-bound. Three producers confirmed contractual
business at Eur890-900/mt FD NWE, while two producers
reported business at Eur900-920/mt FD NWE. Converters
reported a wide range of Eur850-910/mt FD NWE for their
March contracts. Gross values remained stable at Eur890-
 PLATTS POLYMERSCAN
900/mt FD NWE this week. In production news,
LyondellBasell is set to shut its 320,000 mt/year LDPE plant
at Aubette, France from March 24 for a week, a company
source said Friday. “We believe that it is important to keep a
close control on stock levels to support a further price
initiative in April,” the source said. SABIC is set to shut its
120,000 mt/year LDPE autoclave unit at Geleen, the
Netherlands, a company source said Monday. “The autoclave
production is a very expensive and unsustainable process
and that is why we have take a decision to shut our
autoclave plant at Geleen,” he said, adding: “We have other
substitute products available for our customers...The date of
the closure has not yet been set,” he said. SABIC Europe is
also set to have its first LDPE available out of its new
400,000 mt/year tubular plant at Wilton, UK, in May, the
source said, with the plant due to start up at the end of Q1
2009, he said.
United States
Low density prices decreased steadily over the week by a
total of 5 cents/lb following lower feedstocks. Westlake was
heard to have offered low density at 42 cents/lb FAS
Houston but even at that number some traders said demand
was poor. “I just don’t see much demand for LD right now
(in Latin America),” a trader said, despite the lower offer.
There also was not much interest in US LD from Asia where
agricultural seasonal demand was absent. Export buyers
expected lower offers going forward considering spot
ethylene was about 22-23 cents/lb FD USG. Also, producers
Dow and Westlake were heard to be starting up steam
crackers in the near term that would both put pressure on
spot monomer and lengthen LD supply. March supply was
still somewhat tight, sources said, and for this reason the
domestic 5 cents/lb price increase had not been rescinded.
Sources said that while the month’s HDPE increase was most
likely a failure, for LD and LL the increase still had legs. If
part or all of the increase takes hold, backward integrated to
ethane producers would see margins widen as ethane values
have fallen 4 cents/gal to 31-31.5 cents/gal from a week ago.
Asia
Asian low density polyethylene prices increased $10/mt on a
week-on-week basis, attributed to constricted supplies from
the Chinese mainland that saw domestic prices ascending
Yuan 300/mt to Yuan 8,700-8,800/mt on an ex-works basis.
The market knee-jerked to the shutdown of Shanghai Secco’s
steam cracker and its downstream 650,000 mt/year PE unit,
in light of upcoming turnarounds at some of Sinopec’s
subsidary companies in April. LDPE prices were the slowest
among all the PE grades to react to the bullish sentiment,
market sources said, and more clearly defined in East China
than South China. Industry observers said that South
Chinese end-users were more dependant on actual demand
because their businesses hinged strongly on re-exports. The
lowest offer heard was placed by QAPCO at $985/mt CFR
China, L/C at sight basis, to which the company sold out its
daily availability, a company source said. Meanwhile, trades
5 Copyright © 2009, The McGraw Hill Companies
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
were concluded broadly within the range of $980-990/mt
CFR FEA and SEA, but the majority of producers would only
begin offering April shipments in the next week therefore
discussions were still a tad quiet.
Latin America
One major Brazilian export to the Mercosur reported lower
offer prices this week matching other suplliers. Buyers
confirmed deals at $1,180/mt FOT for LDPE. In the Mexican
domestic market, LDPE price was heard at 45-48 cents/lb
after the 10% increase reported in the first week of March.
The adjustment was realized due to the dollar vs peso
exchange rate and also due to international pricing
tendencies. “We have kept sales volumes as programmed for
this month even though we had heard of the existence of
cheaper imported offers. The contracts we have help us
maintain stable prices,” said a source. In the Peruvian
domestic market, participants were reselling LDPE at
$1,250/mt industrial. Offers from the US to Peru were at
$1,160/mt CFR film and industrial, while offers coming
from Korea were at $1,100/mt CFR film. In the Colombian
domestic market, LDPE was being offered at Pesos 3,396/kg
bulk and at Pesos 3,466-3,646/kg bagged. LDPE was being
sold in the Brazilian domestic market at Reals 3,550/mt CIF
for film and industrial grades for medium volumes and at
Reals 3,600/mt CIF for small volumes.
Linear Low Density Polyethylene
Europe
European spot values for LLDPE C4 have peaked, some
trading source said, adding that they were struggling in
implementing substantially higher prices. “We are trying to
achieve Eur810-830/mt FD NWE but it is not easy, especially
when we are competing with imports present in the
market,” a large-volume trader said. “The market is quiet
now, there is definitely less energy in the market, people
seem to be sedated,” a second trader said. “Some new
players have started the pre-marketing now. I would say that
out of all polyethylene grades LLDPE C4 now is most under
pressure on the spot market, we are trading at Eur780-
800/mt FD NWE now and you can not get higher prices,”
another trader said. Some converters have confirmed
trialling pre-marketed product ex-Middle East. “We have
sold at Eur770-780/mt FD NWE this week,” a third trader
said. “We feel that we have already seen the best days of the
year, however having said that oil has been recently moving
up and the world as we know it today may reshape itself
very quickly; we are holding our horses now,” he added.
“Some people have started to buy for April now for week 14-
15 delivery, maybe prices will have one last rally before the
Easter,” the second trader said. In addition, some traders
hoped the recent surge in Asian prices would boost
European market sentiment. Asian LLDPE prices surged by
$15-25/mt this week, impacted by tightening supplies.
SABIC will have less PE spot supply after shutting its 890,000
 PLATTS POLYMERSCAN
mt/year HDPE/LLDPE PetroKemya plant last week on
production issues and the start-up of SHARQ’s new 400,000
mt/year LLDPE plant at Al Jubail has been delayed to H2 2009.
Qatofin has delayed the start-up of its new 450,000 mt/year
LLDPE plant at Masaieed to the fourth quarter of 2009.
Meanwhile, in the contract LLDPE C4 market, producers
remained content, achieving most of the targets set for March.
“We are partially satisfied, the orders are coming through and
we are reaching our targets but our profitability still remains
poor,” a producer said. “Our C4 sales are not going bad, our
sales are good. We have very little or no differentiation
between LDPE and LLDPE C4, while the demand in LLDPE C6
has improved even further,” another producer said. Producers
contacted this week confirmed the current published range for
LLDPE C4 grades, while converters reported a wide range in
their contracts. Some converters had to accept Eur910/mt FD
NWE value with one of their suppliers, who implemented,
according to the converters, Eur120/mt increase, which was
not negotiable. Other converters reported gross values ranging
from Eur850-890/mt FD NWE. Gross values in C4 and C6
grades remained stable this week. Some producers also voiced
concerns about demand developing further into Q2. “We are
going to react to falling demand, we may adjust production as
there is not point in chasing, grooming and looking after the
horse that makes you lose money by consistently coming last
at the race,” a producer said. Some producers also noted that
April will be the test for the real demand, as the industry has
restocked in Q1. While in rotomolding there is good demand,
stretch film is slowing down as our customers have thin
orders,” a producer said, adding that while seasonal
agricultural film business was disappearing, demand for silage
applications were strengthening.
United States
Linear low density prices decreased 2 cents/lb due to lower
ethylene costs and weak demand. Offers were talked at 40-
40.5 cents/lb FAS Houston but buy interest from Latin
America and North Africa were slow. Exporters hoped that
ethylene prices would continue to fall and soon producers
would be able to offer low enough to allow for exports to
Asia where prices were near $1,000/mt CFR China and had
already hit that level in South Asia. Compared to HDPE,
LLDPE supply was tight which gave support to the March 5
cents/lb domestic price increase. While it was unusual to
have a split in PE increases, it would not be the first time
one grade of PE saw an increase when others did not,
sources said. Higher prices could be short-lived, however;
once Dow, Westlake, and ExxonMobil restart long idled
steam crackers. If producers can lower export offers in
April, they may see more business in South America as
Brazil would have trouble following decreases due to
expected higher ethylene costs. Brazil’s ethylene price
follows US and European contracts at a month lag and the
NWE monomer contract for March concluded nearly 15%
higher than February’s CP. The US has yet to settle its
March ethylene contract but would likely be down due to
the lower spot prices.
6 Copyright © 2009, The McGraw Hill Companies
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
Asia
Asian LLDPE prices trekked $15-25/mt higher on the week,
buoyed by tightening supplies in the region. The price
increase and bullish sentiment was most marked in China,
where domestic prices leaped Yuan 300-450/mt to Yuan
8,900-9,100/mt on an ex-works basis, on the back of the
outage of Shanghai Secco’s steam cracker and its 650,000
mt/year PE unit. Secco was heard to be restarting its cracker
by March 23, but industry observers surmise PE supplies
from Secco would not resume until April. Offers by
producers such as Reliance and Borouge were hiked to
$1,000/mt CFR and above, while the majority would only
begin offering April shipments next week. Qatofin has
delayed the startup of its new 450,000 mt/year LLDPE plant
at Masaieed to the fourth quarter of 2009. SABIC will have
less PE spot supply after shutting its 890,000 mt/year
HDPE/LLDPE PetroKemya plant last week on production
issues and the startup of SHARQ’s new 400,000 mt/year
LLDPE plant at Al Jubail has been delayed to H2 2009. In
South Asia, offers rose to $1,020/mt CFR.
Latin America
Brazilian March export price increases failed to go through
and distributors were heard buying and selling at the same
price levels in the Mercosur. One buyer in Paraguay confirmed
the $980/mt FOT for LLDPE butene. Paraguayan polyolefin
demand firmed up in March due to an expected price increase
in April, a local distributor said this week. Deals in Paraguay
were heard at $1,050/mt CIF LLDPE butene and hexane. “We
generally sell between 500 and 800 mt of PE per month, but
we were pleasantly surprised with the 1,500mt sold in
March,” said a source. The main driver behind the demand
was buyers looking to secure resin before a possible $50/mt a
price increase in April, sources said. Brazilian domestic LLDPE
was being offered at Reals 100/mt below end February levels, a
producer reported. Since the start of February, prices dropped
Reals 200-250/mt. Following the price reduction, resins were
being offered in the Brazilian domestic market at Reals
3,800/mt CIF LLDPE butene and hexene and at Reals
3,900/mt CIF octene (prices with pis/cofins).
High-Density Polyethylene
Europe
European traders reported seeing a surge in spot
blowmolding and film spot prices in Spain this week, with
availability impacted by a production issue with a major
supplier. “Film and blowmolding grades definitely have a
premium of almost Eur50/mt in Spain,” one trader said.
“We can sell spot blowmolding in Spain at Eur900/mt FD
NWE now,” another trader said. In other Northwest
European regions, spot market demand has flattened out
further, trading sources said. Spot values in injection grade
eroded this week as more traders reported trading in a range
of Eur780-790/mt FD NWE. “We are trying to get Eur800/mt
FD NWE but it is very difficult now,” a trader said. One
 PLATTS POLYMERSCAN
trader disagreed, saying they were offering to France at
Eur840/mt FD France and were hoping the market would
reach that level soon. Spot values in blowmolding grade, on
the contrary, strengthened this week to Eur810-820/mt FD
NWE, while film grade strengthened to Eur805-815/mt FD
NWE this week. Some traders noted early attempts by
converters to de-stock as the end-user demand deteriorated
in March. Converters reported prompt-focused business,
impacted by short lead times on orders. “It is very difficult
to pass the increases to the end-user markets, we are all
suffering now,” one converter said, continuing: “The
chances of recovering the increases are close to zero. While
our utilization rates are weak every converter in the market
seeks volumes—it is very competitive.” Another converter
said: “Every converter is eating in to his own margin, which
is already very thin...[hence] converters are careful with their
stocks, as the orders are very slow.” “We feel that we have
already seen the best days of the year. However, oil has been
recently moving up and the world as we know it today may
reshape itself very quickly—we are holding our horses now,”
a trader said. In addition, some traders hoped that the recent
surge in Asian prices, impacted by tighter material
availability, would provide a boost to European market
sentiment. SABIC for instance, had shut its 890,000 mt/year
HDPE/LLDPE PetroKemya plant at Al Jubail last week and
would be shutting some of its SHARQ PE units for
maintenance on ongoing production issues. As a result, the
company would have less PE spot availability in April, Asian
sources said. Meanwhile, the start-up of its new 400,000
mt/year HDPE plant at the SHARQ 3 complex has been
delayed to the second-half of the year. In the European
contract market, meanwhile, producers mainly reported a
good progression of orders, though some noted a marginal
flattening of demand. “We are partially satisfied, the orders
are coming through and we are reaching our targets but our
profitability still remains poor,” a producer said. While some
converters hoped to see a more favorable environment in
April, others expected to see another the last rally in prices,
before market starts to see new alternative supplies in the
market in May. Producers, on the other hand, were looking
to recover dents in their margins further in April, with one
stating “Eur10-20/mt increase in April is not enough, we
need another substantial increase in April or we trim
operational rates further,” he said, adding: “It is better to
shut production than to loose money on every ton
supplied.” Other producers said that if demand eroded in
April, they would focus on exports once again in a bid to
achieve better net-backs. “We are going to react to falling
demand, we may adjust production as there is not point in
chasing, grooming and looking after the horse that makes
you lose money by consistently coming last at the race,” a
producer said. Some producers also noted that April will be
the test for the real demand, as the industry has restocked in
Q1. Gross values in injection grade strengthened further to
Eur890-900/mt FD NWE. Blowmolding grade firmed to
Eur880-890/mt FD NWE, while film grade strengthened to
Eur860-870/mt FD NWE.
7 Copyright © 2009, The McGraw Hill Companies
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
United States
High density prices dropped across the board as ethylene
fell, which allowed offers to decrease and opened export
opportunities to deepsea markets. Spot ethylene has tanked
nearly 10 cents/lb from early March to just over 22 cents/lb
as US ethylene capacities were slowly coming back
onstream. Late last week Ineos held a blow molding export
auction that concluded at 34.5 cents/lb delivered in railcars
to Houston (37 cents/lb FAS Houston). The company was
also heard to have sold injection grade HD at 35 cents/lb in
railcars. These prices worked for export to Latin America and
Asia. Film grade had been sold in March at 44 cents/lb FAS
Houston but traders were waiting for new offers for April at
a lower number. The 5 cents/lb domestic price hike was
heard to be close to being tabled to April 1 for high density.
Weak supply/demand fundamentals coupled with the fall in
feedstock costs and lower export prices; all worked against
implementation of the increase. Ineos was also heard to
have held a domestic market auction for 10 cars of HD
injection where the concluded price was 37.8 cents/lb with
an upcharge of 2.5 cents/lb depending where the cars
would be delivered.
Asia
The Asian high density polyethylene market leaped $15-20/mt on
the week, lifted by taut supplies, particularly in China. The
shutdown of Shanghai Secco’s cracker and 650,000 mt/year PE
unit had a palpable impact on the local market in light of
upcoming maintenance at some Sinopec subsidary companies in
April. The cracker was rumored to be restarting on March 23, and
PE supplies from Secco only to resume by April at the earliest.
Chinese domestic prices spiked Yuan 300-800/mt across all grades,
but most noticeably to Yuan 8,400-8,500/mt for HDPE film and
Yuan 8,800-9,000/mt for HDPE yarn. Of all the grades, HDPE yarn
was the grade with the stellar increase in the week, leading the
pack in terms of demand, sources said. On the delivered
benchmarks, trades for HDPE yarn was heard concluded by
Haldia at $980/mt CFR China, Formosa at $970/mt CFR China,
while offers all trekked higher to $990/mt and above. Film grade
HDPE was offered at $950/mt to South China, while the majority
of producers in Asia had sold out their March availability and
were preparing to offer April shipments in the coming week.
Bullish sentiment was also buoyed by gains on the western crude
benchmarks in the week and news of certain outages. SABIC for
instance, had shut its 890,000 mt/year HDPE/LLDPE PetroKemya
plant at Al Jubail last week and will be shutting some of its
SHARQ PE units for maintenance on ongoing production issues.
As a result, the company would have less PE spot availability in
April. Meanwhile, the startup of its new 400,000 mt/year HDPE
plant at the SHARQ 3 complex has been delayed to the second-
half of the year. In South Asia, HDPE blow moulding was offered
at $950-960/mt, yarn at $1,020/mt, injection at $960-970/mt, and
film at $970-980/mt CFR India. The PE market was described as
broadly stable with demand still good. India’s Reliance has also
delayed the startup of its new 1.1 million mt/year PE unit at
Jamnagar to sometime between 2010-2011, a company source
said this week.
 PLATTS POLYMERSCAN
Latin America
Brazilian HDPE producers expressed concern that a potential
increase in ethylene prices would result in higher
polyethylene prices and in turn, stifle demand and compress
margins, sources said. Buyer deals in the Mercosur were
heard at the same levels this week and one major Brazilian
producer lower price offer for the resin. March ethylene
prices in Brazil were talked this week at $760/mt FOB
however a 15% increase in European ethylene values could
push ethylene prices up despite an expected lower contract.
Ethylene prices follow ethylene contract prices in Europe
and the US with a month lag. March HDPE was sold in the
Brazilian market at Reals 3,900/mt CIF for blow molding and
injection for small volumes, Reals 3,800/mt CIF blow
molding and injection for medium volumes and at Reals
3,600-3,700/mt CIF for the same grades for large volumes.
Polypropylene
Europe
Assessed Northwest European polypropylene contract levels held
steady this week as what was described by sources as an
indicative average price of settlements achieved. A number of
sources reported having settled their contracts in the wide range
of Eur765-830/mt FD NWE for homo-inj grade. The assessed
level illustrates a Eur30/mt increase versus Platts assessed
February contract price levels. One producer said in terms of
customers with previously lower priced February contract levels
there was “absolutely no escape,” implementing a full Eur50/mt
increase to levels of around Eur820-830/mt FD NWE for homo-
inj. Other producers said however that they had achieved
increases of Eur20-30/mt with contracts settled so far, one at a
high end of Eur800/mt FD NWE. A number of sources though
said they had more negotiations to finish by the end of the
month. In Spot business, it was described as another quiet and
calm week, also with levels made in a wide range of Eur690-
750/mt FD NWE. One trader said he had heard producer offers
of around Eur720/mt FD NWE for homo-inj, but had still not
been able to achieve anything over Eur700/mt FD NWE with his
customers. “Producers are trying to take a firm position (on
spot) but it really varies on how balanced they are on particular
grades,” he said. Another trader agreed that there had been little
movement in spot prices or demand for commodity grade
material, and had therefore he had been “more active in off-
grades.” He said that he was hoping for some improvement in
demand in coming weeks, but that “converters are not eager to
commit to increases as they are still waiting to see propylene
price developments for April.” “We can buy material at Eur630-
640/mt FCA Antwerp,” another trader said. Export opportunities
to Asia were said to be waning still according to sellers this
week, due to the increase in production costs from March’s
Eur42/mt increase in propylene and lower prices in Asia than
seen in February. One NWE producer said he was “continuing to
ship in March for business acquired in February for India and
Pakistan. Higher costs close the arb window a bit but there are
opportunities there for specialty grades where customers are
8 Copyright © 2009, The McGraw Hill Companies
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
willing to pay more.” In Russia this week, prices continued to
hold steady as sources described demand as stable. One supplier
said he was did not expect any price increases until around April
time, adding that he was still exporting material to Asia, but in
smaller lots due to drop in prices and demand seen in China
recently in Asia. Prices were pegged at Eur540-550/mt CFR St
Petersburg. In the UK, contract prices were assessed steady, as
buyers and sellers said that contract numbers continued to hold
parity with European contract prices when applying an average
of the month GBP/Eur exchange rate. In Turkey, demand was
described by sources to still be depressed in general, one trader
said though he had seen “some good inquiries for small parcels
recently.” He explained he had seen ex-Turkmenistan offers of
$850/mt CPT Istanbul plus 6.5%, equating to $895/mt CFR
Turkey. Adding that due to the poor state of demand, any
increase in offer levels was only driven by recent exports to Asia
that have also gradually reduced in activity.
United States
Domestic prices increased this week for homo polymer
polypropylene, as ranges were reportedly in the 40’s cents/lb,
a buyer said. Despite the increase in pricing, demand
remained poor. “There has been a 44% decline in sales,” said
a PP buyer. “Supply is long, there is no demand and no one
is buying.” Still producers were heard to be slashing
operating rates in an effort to minimize inventory levels and
bolster pricing, participants said. In the export market, off
spec material was pegged in the range of 33-38 cents/lb,
delivered rail car, for homo polymer utility grade. Demand
was also reportedly stagnant for the export PP homo polymer
market, given the auto and housing industries have seen
significant declines in sales. Producers, however, were
reportedly offering higher levels in an attempt to raise the
price, despite the lack of buyer interest. Upstream, one
producer confirmed settling March PGP contracts up 1
cent/lb at 29 cents/lb. “It’s likely a split settlement at 1-2
cents up,” said one participant. Spot propylene prices moved
down as activity continued to be slow this week. Arbitrage
opportunities to Europe and Asia were closed and domestic
appetite for material thinned, sources said.
Asia
Asian polypropylene prices spiked $25-60/mt higher in the
week, an increase led by gains in the Chinese domestic
market. Local retail offers for homo leaped Yuan 300-700/mt
to Yuan 7,900-8,100/mt, Yuan 7,800-7,900/mt for inj/yarn
and Yuan 8,700/mt for block copol, all on an ex-works basis.
Shanghai Secco has shut its cracker and its 250,000 mt/year
PP plant. The company was heard to be planning a restart
them on March 23. Inventory levels in China among local
producers were heard to be lower than normal, with Sinopec
and Petrochina operating their PP units at an average 80%
capacity, industry observers said. Short supply became
apparent to Chinese buyers this week. In addition, SABIC said
it would have less PP spot material to offer in April due to
ongoing production issues at its plants, without giving further
details. Indian producers sold raffia/inj in a broad range of
 PLATTS POLYMERSCAN
$870-880/mt CFR, $900-910/mt for IPP film, but had hiked
offers to $900/mt and above levels by Wednesday. Korean
producers reported selling $900/mt for homo/injection, $930-
940/mt for block copol, $910-920/mt for BOPP, and current
offers were $10-20/mt higher from deal done levels. Taiwanese
producers sold PP homo at $900/mt, $930-950/mt for IPP film,
$935/mt for BOPP and around $930/mt for block copol.
According to sources, BOPP, injection and block copol were
seeing the best demand. BOPP because of high operations at
downstream factories, injection buoyed by strong demand in
South China and block copol on short supply. Southeast Asian
prices were lifted in tandem with China, but price indications
were few and far between as Southeast Asian producers had
sold out of March material and were offering April shipments
only in the coming week. In South Asia, trade was thin as
participants were expecting product from Reliance’s new
Jamnagar plant to be available in the market soon in April.
Latin America
Prices failed to move this week as distributors in the
Mercosur reported buying and selling at static levels, before
April announcements. Buyers confirmed prices at $990/mt
for co-polymer and at $890/mt for homo. Domestic PP
prices in Argentina were set to rise following a $30/mt,
March price increase announcement by one producer. It was
not immediately clear whether other producers would
follow. “We expected a better demand for March but
probably we are going to be with the same volumes we saw
last month,” said the souce. Following the increase, PP was
being offered in the domestic Argentinean market at $1,050-
1,080/mt CIF raffia, $1,060-1,090/mt CIF injection, $1,030-
1,100/mt CIF random, $1,100/mt CIF co-polymer impact
and at $1,300-1,400/mt CIF special resins. Meanwhile, in the
Brazilian domestic market, PP prices for March were down
Reals 200/mt compared to the previous month, sources said.
Polystyrene
Europe
Two producers said this week they expected to settle their
average March contracts at a rise of between Eur30-40/mt above
March contract prices. One converter said that he expected to
settle its monthly intake volumes at a rise of Eur30/mt, leaving
the gross CP below Eur900/mt FD NWE. Most producers now
admit their original indications of around 60/mt were
unachievable, given poor demand, which was expected to persist
well into the second quarter. If confirmed this implied producers
had been able to recover some margin lost in February. However,
producers argued that with the combined February-March SM CP
delta of around Eur81/mt, a recovery of no more than Eur10/mt
would be considered a disappointment. Sources were not hopeful
for an improvement in April demand, and hence expected that
unless further production cuts were announced then there was
little scope for further margin recovery. “Demand in Europe has
been less than expected [this year], no worse than February,” a
producer said. “If demand from industry was the same or even a
9 Copyright © 2009, The McGraw Hill Companies
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
slight increase, I think prices could fall further. [But] if there are
further PS production cuts, it could be [possible] to see an
increase in prices,” the converter said. Most producers said
pegged the GPPS-HIPS spread at no less than Eur50/mt, while
another said that pressure from polybutadiene prices had led to
some spreads agreed as low as Eur40/mt. Polystyrene production
capacity was oversupplied by around 700,000 mt/year, a number
of producers and converters agreed. Sources point to industry
2008 production estimates of around 2.5-3 million mt/year,
while actual demand was thought to be around 2.2-2.3 million,
including exports, sources said. One producer pointed to “a
recession factor of 250,000 mt/year”. This was the amount of
capacity cut due to the economic downturn. Last week Total said
it would permanently shut one of its two lines at its Gonfreville,
France site. Although the company would not comment on the
specific capacity to be shut or the total site capacity, one source
estimated the high impact PS line was producing around 60,000
mt/year, from a total production at the site of around 120,000
mt/year. Both producers and converters agreed that capacities
needed to be cut or a degree of consolidation would be on the
cards. “The European market needs more consolidation. There is
a constant innovation in these sectors, meaning less plastics (in
some applications),” a producer said. “More capacity shutdowns
are coming and this has to be done [to aid recovery].” Sources
said that the smaller units should disappear due to their
inefficiency. “Closures are all that’s left. A 60,000 mt plant is not
world scale, and they will continue to underperform,” a producer
said. In EPS, a producer said it expected to settle its March
contracts at a rollover but was still pushing for an increase of
around Eur10-20/mt in March. Sentiment continued to be
weighed by lackluster demand and still little improvement in
construction. In production news, BASF started up a new 90,000
mt/year expandable PS unit at its Ludwigshafen, Germany unit
last week, the company said. Also, Sunpor last week shut down
its 70,000 mt/year unit in Polten, Austria, for a scheduled
turnaround, company sources said.
United States
Producers and consumers reported a 3 cent hike on PS
contracts in March, with two sellers delaying the remaining 2
cents via temporary voluntary allowance. The initial
nomination was for 5 cents/lb in mid-February. However,
producers pushed the hike to March 1. Accordingly, the assessment
this week moved up to 48-49 cents/lb delivered rail car for general
purpose while HIPS was pegged at 53-54 cents/lb delivered rail car.
Buyers were still unhappy with the settlement as they complained
of weak demand that could not support the increase. Further, back
in February when benzene contracts settled up 34 cents higher to
135 cents/gal, PS producers could have easily pushed through a 2
cent hike, one end-user commented. With a lower March CP of 129
cents/gal, there was no justification, he added. In production, one
PS supplier was reportedly experiencing mechanical issues in
California, but one buyer said the issue was being resolved.
Confirmation from the producer was unavailable by time of press.
Meanwhile, the market was balanced with manufacturers matching
production with demand. In feeds, spot styrene was flat from last
week at 35.50-36 cents/lb FOB USG.
 PLATTS POLYMERSCAN
Asia
Asian general purpose polystyrene prices spiked $60/mt on the
CFR China benchmark this week in a bid to keep up with
recent sharp gains seen in feedstock styrene monomer prices.
SM prices shot up last week as worries remained over short-
term supplies. A steam cracker outage at China’s Shanghai
Secco caused the company to delay its March SM contract
supplies. Operations at its 500,0000 mt/year SM and 300,000
mt/year polystyrene plant are low at the moment, a company
source said Wednesday. Secco is planning to restart its troubled
steam cracker around March 23, ending what would then be a
two-week unplanned outage due to mechanical problems,
sources close to the company said Wednesday. The cost push
was reflected in the PS retail market in Hong Kong, which was
pricing general purpose polystyrene at $950-990/mt. Some
producers had raised offers this week, but most were still to
revise their earlier offers. “We have stopped offering
GPPS/HIPS to the market since we were taken aback by the
trend in SM prices last week. At this point, we do not plant to
sell below $1,000/mt,” a major US producer said Wednesday.
Ex-Taiwan offers were left unrevised at $910-940/mt, but
traders expected these offers to be increased this week. Another
producer in Taiwan already raised offers to $980/mt CIF HK for
end-March shipment. A Japanese producer said he last
concluded GPPS March cargoes at $920/mt late last week,
however, new offers would be placed at $960-980/mt CIF basis
to Hong Kong market this week. Ex-Thailand offers to Hong
Kong/China market were not seen this week. Thailand’s IRPC
has restarted its SM, PS units, however, demand in the SE
Asian market was not looking good, a company source said.
The company had not made any new offers this week, and was
trying to meet some delayed PS commitments. In the domestic
market, the situation remained one of “shortage,” sources said.
Deal price of GPPS was at Yuan 7,800-8,500/mt (delivered
basis) while that of high impact polystyrene was at Yuan
8,500-9,500/mt (delivered basis). The outlook for the market
for GPPS looked better in the short-term, with areas that saw
demand include extruded polystyrene and CD casing.
However, concerns remained on the volatile behaviour of SM
prices. SM prices showed signs of weakness this week, as short-
term bullishness on supply was replaced by concerns on
downstream ability to absorb the cost.
Acrylonitrile Butadiene Styrene
Europe
Sentiment was mixed in the ABS market this week, with the
realization that demand was still sluggish. Whereas at the
beginning of the month, producers were upbeat about a
demand improvement, sources admitted that the much-
hoped-for improvement in weather, that would enable
construction projects to be undertaken, was still yet to
materialize. Auto industry figures still showed that demand
remained at low levels, and the housing market was still
deemed to be dire. Last week, producers were hopeful to hit
increases as high as Eur50/mt, but others have since scaled
10
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
back this expectation in the wake of the continued poor
demand scenario. One producer said that it could agree
some of its contracts at a rollover, but it was still hopeful of
achieving an increase of around Eur10-20/mt in other
contract business. “We will try to increase business, the
producer said. “Negotiations have been poor this year and
market consumption not great,” the producer added.
However, the same source was upbeat about the stimulus
package offered in Germany at the start of February to
subsidize new car sales. He said that this was good news and
would help the ABS market. In the butadiene market,
producers reported an unwillingness or need to sell any
volumes due to their systems being in balance. “We are
balanced and we don’t have to or need to go to into the
market,” a producer said. However, prices remained under
pressure due to persistent long supply in the crude C-4
chain. Free delivered NWE prices were assessed at around
Eur345/mt, while FOB Rotterdam prices were assessed at
$305/mt, as per Platts data March 13.
United States
January, February and March were successively stronger, one
producer said Wednesday. “It’s a trend we want to see,” he
explained, but there were still questions about whether demand
will peak in April as it typically does. Spot prices this week were
talked at 67-72 cents/lb delivered railcar for injection grade, and
the assessment was steady Wednesday. In industry news, SABIC
Innovative Plastics has selected Ashland Distribution as an
authorized distributor to select customers in North America.
The announcement included all SABIC resin products including
ABS and polycarbonate, a spokeswoman for SABIC confirmed.
The agreement would be finalized in the coming weeks and
was expected to take effect in mid-April. In feedstocks, balance
month styrene was flat from last week at 35.50-36 cents/lb FOB
USG. March butadiene contracts settled at 25 cents/lb. In
acrylonitrile, domestic spot was at 33-34 cents/lb delivered.
Asia
Asian acrylonitrile-butadiene-styrene prices maintained
strength this week gaining $10-20/mt on the CFR China/SE
Asia benchmark. Gains were seen both due to rising feedstock
costs — especially SM prices surging to $880-885/mt at the end
of last week, as well as strength in demand that was able to
absorb higher prices. Ex-Taiwan, ABS offers that were revised
this week were at $1,220/mt CIF Hong Kong. Taiwan’s major
Chi Mei Corp. did not announce a new offer (the old offer
announced last week was $1,210/mt CIF Hong Kong for March
shipment) this week. A source said the company was waiting
to determine if recent SM gains were sustainable. That looked
unlikely this week, as SM prices retreated, falling $20/mt to
$865/mt CFR China in Wednesday’s trade. Short term
bullishness last week on SM supply shortage was replaced by
concerns on downstream ability to absorb the cost. Ex-Korea
ABS offers were few, with producers targeting ABS price of
$1,250-1,260/mt CIF Hong Kong/China for April shipment.
Dealers were already quoting higher prices in the Hong Kong
market, with retail prices heard at $1,250-1,260/mt. Prices in
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN
the domestic market in China shot up Yuan 500/mt more on the
week to Yuan 10,800-11,500/mt ex-works (for low- to high-end
material). The supply situation for March was still one of
“shortage,” a producer in Ningbo said. ABS plants in China were
working overtime to meet domestic requirements. “We hope
there are no plant outages, since we will not be able to meet the
additional requirements of the market,” a producer said. Demand
from the home appliance sector was good, while demand from
the electronics and automobile sector was lagging behind, sources
said. In market news, BASF’s SM unit in Ulsan, South Korea, is still
offline, while its polystyrene and ABS units also at Ulsan were
operating normally, estimated around 80-100%. Japan’s Techno
polymer is currently running its ABS unit at 70% of its nameplate
capacity of 250,000 mt/year, a company source said Friday.
Polyethylene Terephthalate
Europe
In southern Europe an increase of Eur80/mt was reported on the
March contract price, short of the Eur100/mt increase sought by
producers, but above the estimate pass through cost of higher
feedstock prices. There was still no clear settlement on the
Northwest European monoethylene glycol March contract. The
initial settlement for MEG of Eur495/mt FD NWE, which is
Eur15/mt higher than the February CP of Eur480/mt. The
increase in paraxylene and prices and MEG contract prices would
equate to an increase of approximately Eur54/mt in PET prices. If
both second initial settlements for PX and MEG were to be
followed, at increases of Eur85/mt and Eur15/mt respectively and
thus officially settled, this would equate to around a Eur54/mt
increase in PET terms. Spanish producers reported an increase of
Eur80-85/mt on the March CPs. Demand in Spain was reported
to be relatively healthy in January and February, with one
producer reporting demand for February as being as good as
2008 levels. The better than expected demand in the early part of
the year, combined with a reduction in production rates, helped
producers to manage supply and demand and pass through an
increase. Other producers have reported similar increases in CPs
for March although one producer reported settling his March
contract at Eur890-900/mt. Looking forward, to negotiations for
April, the likelihood of another increase would be difficult to
implement according to one producer. “On the one hand we
have rising feedstock prices, but on the other side volumes for
March were not good-no a lot of products was drawn down, so it
would be difficult to pass through another increase,” a source at a
producer said. Stock levels at some producers were also reported
to be high relatively high in anticipation of an upturn in
demand relative to January and February. Other factors that
could erode margins for PET producers are higher PTA prices. PTA
was looking increasingly tight due to the continuing problems at
Artenius’ PTA production plant at Wilton, Northeast England,
which is still shutdown. There were further reports that Artenius
could extend the force majeure beyond March, athough a
company source declined to comment. On the positive side the
shutdown of the PTA plant would mean there should be an
increase in PX availability. One trader estimated that there could
11
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
be an additional 20-30kt more PX hitting the spot market in a
month. In the spot PET market values were reported to have
fallen to Eur850-870/mt FD NWE on the back of cheaper priced
imports from Asia. The availability of cheaper imports was also
reported to be limiting any upside in contract negotiations.
US
PET contracts were talked up 2 cents/lb for March but were not
yet completely settled. The increase would be a far cry from
the initial 7 cents/lb nomination but would still allow for a
margin increase for producers. Costs were down about 0.3
cents/lb following the lower PX CP and rollover of MEG
contracts. A 2 cents/lb price hike would put prices just over 55
cents/lb. Demand had not taken off as it typically does before
the summer beverage season, sources said. There were no April
increases issued yet but a producer said if March finishes up 2
cents/lb, the other 5 cents/lb would be pushed to April to
guard against any sudden jump in feedstock prices. MEG
contracts are already slated to drop about 3 cents/lb in April
but spot PX values have held steady. The import market had
slowed considerably, traders said. “I haven’t even gotten any
offers from Asia lately,” an importer said. Duty-free resin was
heard sold at 53 cents/lb delivered to West Coast customers for
April arrival. From China and Korea, offers were at a similar
level but deals were few. The import offer was under the
domestic price but many buyers did not want to take the
chance on imports as domestic prices could easily decrease in
April or May to at, or under current import offers. “Demand is
so poor, it would not surprise me to see April prices decrease
domestically,” a supplier said.
Asia
Bottle grade polyethylene terephthalate continued to
weaken this week, despite feedstock purified terephthalic
acid surging. PET was assessed $5 lower to $935/mt FOB
Northeast Asia/Southeast Asia going into the second month
of its peak demand season in the northern hemisphere.
Exports to Eastern Europe, the EU and Russia have fallen,
and some PET manufacturers are seeing their orders being
slashed by half compared to the same time last year.
“Demand in Eastern Europe and Russia is down sharply
because their currencies have weakened against the US
dollar,” an industry source said. “These countries also have
difficulties opening letters of credit.” Bids from Latin
America were said to be only around $860/mt FOB as the
region was still holding quite a lot of inventory. A trader
said his exports to the EU for March were lower than for
January and February — a sign that the global economy is
deepening, despite what politicians are saying to the contrary.
For the week, PTA rose $27.50 since Thursday to $730/mt CFR
China on Wednesday. Traders said the surge is because of
tight supply as many producers are building inventory in
preparation for a shutdown by a few South Korean producers
in April. Monoethylene glycol, however, has been relatively
stable, at $442/mt CFR China due to excess supply. A PET
producer said: “There’s lots of MEG sitting around in China
that no one is buying. There’s just too much MEG.”
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN VOLUME 32 / ISSUE 11 / MARCH 18, 2009

POLYMER FEEDSTOCKS: OLEFINS

Polymer Feedstocks – Ethylene Polymer Feedstocks – Ethylene Glycol Assessments (cont...)
Europe US (¢/lb)
Spot Friday Weekly Average Spot Friday
FD NWE (Eur/mt) 595-605 615.0-621.0 FOB USG A/F* 22.00-22.50
CIF NWE ($/mt) 690-700 698.0-708.0
CIF MED ($/mt) 690-700 – Fiber Grade Monthly Contract Price (Mar ): 23.50-24.50 FOB USG

Asia ($/mt)
Monthly Contract Price (Mar): 675-675 FD NWE (Eur/mt)
Quarterly Contract Price (Q1): NA-NA FD NWE (Eur/mt) Spot Friday Weekly Average
CFR China 439-441 439.0-441.2
US (¢/lb) CFR Taiwan 439-441 –
Spot Friday Weekly Average CFR SE Asia 439-441 (1) –
FD USG 23.000-23.250 25.400-25.625
Average Monthly Contract Price (Apr) – CFR Asia:613
Posted Contract Price (Mar ): NA-NA Delivered MEG CP Nomination (Mar) – CFR Asia: 560-560
Net Contract Price (Mar ): NA-NA Delivered (1) CFR SE Asia = CFR Indonesia.Note: *A/F denotes anti-freeze grade Asian ethylene glycol
assessments are basis L/C 90 days.
Asia ($/mt)
Spot Friday Weekly Average Polymer Feedstocks – Butadiene
FOB Korea 605-610 –
CFR SE Asia 610-620 602.8-611.2 Europe
CFR NE Asia 635-640 632.4-639.6 Spot Friday
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand. FD NWE (Eur/mt) 343-347
FOB Rdam ($/mt) 302-307
Polymer Feedstocks – Propylene
Quaterly Contract Price (Q1) 600-600 (Eur/mt)
Europe (Eur/mt) Ineos Olefins Monthly Contract Price Ex-Works:425-425 (Eur/mt)
Poly Grade Spot Friday Weekly Average US (¢/lb)
FD NWE 425-435 433.0-443.0
CIF NWE 425-435 425.0-435.0 Spot Friday
CIF USG 15.00-17.00
Chem Grade Spot Friday Weekly Average
FD NWE 390-400 –
Monthly Contract Price (Apr ) 25-25
CIF NWE 380-390 –
Asia ($/mt)
Poly Grade Monthly Contract Price (Mar): 497-497
Spot Friday
Poly Grade Quarterly Contract Price (Q1): NA-NA
FOB Korea 495-505
US (¢/lb) CFR Taiwan 525-535
CFR SE Asia 560-570 (1)
Spot Friday Weekly Average
FOB Japan 475-485
dlvd USG dlvd USG
CFR China 530-540
Ref Grade 19.750-20.000 21.500-21.850
Poly Grade 24.375-24.500 – (1) CFR SE Asia = CFR Indonesia. *A/F denotes anti-freeze grade.
Chem Grade 21.875-22.000 –

Poly Grade Contract Price (Mar ): NA-NA Delivered Platts Global Ethylene Prices ($/mt)
Chem Grade Contract Price (Mar ): NA-NA Delivered
($/mt)
Asia ($/mt)
1150
Spot Friday Weekly Average CFR NE Asia
FOB Korea 694-696 678.0-680.0
960 CIF NWE Ethylene
CFR Taiwan 754-756 –
Spot Ethylene FD USGC
CFR SE Asia 814-816 –
FOB Japan 684-686 – 770
CFR China 754-756 –
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand.
580
Polymer Feedstocks – Ethylene Glycol Assessments
390
Europe
Spot Friday
200
FD NWE T2 (Eur/mt) 410-430
16-Oct 11-Nov 04-Dec 02-Jan 29-Jan 23-Feb 18-Mar
CIF NWE T2 ($/mt) 529-554

Monthly Contract Price (MAR ) – (Eur/mt) NA-NA Notes: All olefin prices reflect assessments at close of previous Friday.

12 Copyright © 2009, The McGraw Hill Companies

 PLATTS POLYMERSCAN
Ethylene
Europe
European ethylene spot values softened this week on improved
material availability and more pronounced selling interest,
market sources said. Buying interest was seen at Eur575-590/mt
FD NWE, while selling interest was seen at Eur610/mt FD NWE,
resulting in a spot assessment at Eur595-605/mt FD NWE
Friday. No spot deals were reported this week, though more
liquidity on the spot market was seen possible as marginal
derivative sales and marginal ethylene tons were looking less
disconnected in the spot market. “Now I am considering
buying as spot ethylene starts to approach more marginally
competitive polyethylene sales,” an integrated market
participant said. While seeing more length emerging, ethylene
producers said that it was “manageable” and was not requiring
a reconsideration of ongoing operational rates at crackers yet.
With moderate ethylene length incrementally emerging the
confidence in demand from some derivatives, such as PVC and
glycols was somewhat eroding, some ethylene producers and
consumers said. “The PVC market is suffering now as they
could not pass the ethylene increase through,” an ethylene
producer said. “There is no demand—it is a buyers’ market,” a
PVC producer said. “While demand remains uncertain for
second-half March and April, the signals are worryingly bearish.
Ethylene is already showing signs of length and capacity is
expected to return to the market in April. Additional
polyethylene on stream in second-quarter [non-NWE] will also
add price pressure to the chain,” an integrated player said,
adding: “Discipline will be key for Europe and operating rates
could be effected.” With cracker co-products performance still
disappointing, ethylene continued to be the most bankable,
giving the highest returns, some producers said. Some added
that despite some bearish tones emerging in the market, there
was no imminent credible downward pressure on the product.
Northwest European polyethylene prices continued to
strengthen, as PE producers remained firm on their price
policies. With the current published LDPE price at Eur890-
900/mt FD NWE or Eur811/mt FD NWE net, using a typical
discount of 8%, only Eur12/mt margin could be made as PE
producers needed to have Eur811/mt FD NWE net level as a
break even with March ethylene contract price. In HDPE
blowmolding grade PE producers need Eur831/mt net as a
break even level, however at the current published gross value
of Eur870-880/mt or Eur796/mt net, they were in a red by
Eur35/mt. “Some of our customers expect better conditions in
April. However, regardless of what happens to ethylene we will
still be seeking to improve our margins...there is still no
integrated margin to talk about,” one PE producer said. “A lack
of visibility does impact our customers’ purchasing patterns,
who continue to buy only what they need. However, to those
who expect lower prices in April, we say that for PE producers
to engage in a price war and start competing for volume there
has to be a substantial wedge margin. And there is no such
margin,” another PE producer said. LyondellBasell is set to shut
its 320,000 mt/year LDPE plant at Aubette, from March 24 for a
week, a company source said. “We believe that it is important
13
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
to keep a close control on stock levels to support a further price
initiative in April,” the source said.
United States
Spot ethylene values in the US shed roughly 5.5 cents/lb week
on week as oversupply concerns persisted. Early week saw a
wide bid/offer spread with buyers holding out in expectation of
lower prices. March offers were heard Monday at 33 cents/lb
MtB Wms against bids heard at 26 cents/lb MtB Wms. April
pricing remained backwardated to March with a tighter range
as offers were heard at 28 cents/lb MtB Wms against bids at 25
cents/lb MtB Wms. Participants failed to converge, however,
and no trades were heard done. Tuesday sellers lowered offers a
couple cents and March was heard offered at 31 cents/lb. Still
buyers saw looming steam cracker restarts and weak derivative
demand and held bids near 26 cents/lb. March offers fell
further mid-week and were heard at 27 cents/lb MtB Wms. Bids
however fell as well and were seen at 21.25 cents/lb MtB Wms.
March formula offers were heard at ethane x .422 plus 12.5
cents/lb against bids at ethane x .422 plus 9 cents/lb. April was
slightly discounted to March with offers heard at 26 cents/lb
against bids at 21 cents/lb at both MtB Wms and Equ. May was
flat to April while Q2 offers were at 25.75 with no bids heard.
Q2 formula offers were heard early in the day at ethane x .422
plus 10 cents/lb and later moved lower to plus 9.5 cents/lb.
March offers opened Thursday at 21 cents/lb MtB pipe against
bids seen at 17 cents/lb MtB pipe. Meanwhile, ethylene buyers
continued to hold out in hope of lower prices. March bids held
steady at 21 cents/lb MtB Wms while March offers opened the
day at 27 cents/lb MtB Wms. Participants began to converge
later in the day and March bids were heard at 23 cents/lb
against offers at 25.50 cents/lb. Q2 was offered at 26.50 cents/lb
at both MtB Wms and Equ. April formula bids were seen at
ethane x .422 plus 5.5 cents/lb against offers at ethane x .422
plus 9.5 cents/lb. After close of assessment, March traded twice
at 23 cents/lb MtB Wms. Friday saw the bid offer spread tighten
with March heard bid at 22.50 cents/lb MtB Wms against offers
at 24 cents/lb MtB Wms. April bids were seen at 21 cents/lb
MtB Equ with no corresponding offers heard. Q2 formula offers
were seen at ethane x .422 + 9.25 cents/lb against bids seen at
ethane x .422 + 5.5 cents/lb. June ethylene was offered at
ethane x .422 plus 9.5 cents/lb at both MtB Wms and Equ. No
confirmed trades were reported and the assessment closed at
23-23.50 cts/lb. In production, CP Chem had shut down its
ethylene unit at Sweeney, Texas following a malfunction at a
furnace at the facility. A source familiar with operations said
that the unit is up and running again. “We’re back in the
pipeline. Just an unexpected outage for a day or two.”
Latin America
Ethylene prices in the Mexican domestic market were
reported for March at $635/mt FOB contract which was a
downward variance of 1.97% over last month. In local
currency, the price was Pesos 9,245/mt FOB which reflects an
increase of 4.34%. In the spot market, ethylene Mexican domestic
prices were at $777/mt FOB and remained stable from last month,
while in local currency the price was Pesos 11,311/mt FOB which
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN
was in increase of 5% over February and caused by a monetary
exchange fluctuation. PEMEX was preparing the next ethylene
export for the 21st of March for a total of 4,500 metric tons,
probably to Asia. “Our biggest ethylene client that would
normally buy 3,500 metric tons per month closed down, and
now we will begin trying to export this excess product every
month,” said a source. PEMEX’s plants were reported to be
working at 80% capacity this month with the Cangrejera and
Morelos plants producing 1,650 tons of ethylene daily, while the
Pajaritos plant was producing 380 tons per day. Ethylene contract
prices in the Brazilian domestic market were reported with an
increase of 10% for March over last month’s prices. Prices were
heard at $760/mt FOB and in local currency at Reals 1,800/mt
FOB. Ethylene prices in the Brazilian domestic market follows the
international movements on monthly ethylene contract prices in
Europe and the US with a month lag.
Asia
NEA: An unplanned naphtha-fed steam cracker outage at Shanghai
Seccoprompted buying of FOB Korea spot ethylene cargoes by
traders, which pushed the FOB Korea benchmark values up by
$12.5/mt on the week. Secco's 900,000 mt/year sole cracker was
shut over last weekend due to a technical problem, triggering
supply crunch concerns in the region for prompt end-March
loading. Two spot ethylene cargoes were reported to have been sold
between $600-610/mt FOB Korea for end-March loading. A bid for
a spot cargo was heard at $600/mt FOB Korea for end-March
loading, Korean producers countered at $620-630/mt FOB Korea,
but such demand was for prompt loading only, with April-loading
bids widely lower at $570-580/mt FOB Korea. On the other hand,
the week-on-week price increase on a CFR NEA basis was rather
limited at $2.5/mt. End-users buying appetite for April delivery was
still weak in the region, with bids widely reported between $620-
630/mt CFR Taiwan/China for April delivery. An offer at $650/mt
CFR Taiwan for April was widely rejected this week. End-users were
still reluctant to build their ethylene inventories this week,
following a successful restart of Formosa's 600,000 mt/year No. 1
cracker late Thursday. SEA: Prices basis CFR SE Asia rose $10/mt,
reflecting tight supplies in the region. Regional supplies have been
tight, while the influx from the Middle East was also limited. This
week, two cargoes (total quantity 4,500 mt) were offered from Iran,
the first offer from the country in March. The two cargoes were
reported to have been sold this week between $610-620/mt CFR
Thailand for end-March/H1-April delivery. End-users in Indonesia,
however, did not chase the prices, with buying indications for H2-
April delivery maintained at or below $600/mt CFR Indonesia.
Indonesia's main spot ethylene buyers were vinyls producers, who
were not in hurry to buy spot cargoes as their plants have been
running below full capacity. Selling indications were reported at
$630/mt CFR SE Asia for any-April delivery.
Ethylene Glycol
Europe
There was no finalization on the Northwest European
monoethylene glycol March contract price this week despite
14
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
two initial settlements being done. A second initial
settlement was confirmed done at Eur495/mt FD NWE
Wednesday, a source from the involved producer said. The
price is Eur35/mt lower than the first initial settlement of
Eur530/mt done at the end of February, and Eur15/mt
higher than the February CP of Eur480/mt. For a NWE MEG
contract to be officially settled, four independent parties
must agree over the price. While buyers were eager to follow
the second settlement, producers were unwilling to settle at
such a reduced price, as one producer said: “I will not
follow. The price is too low and is not at all representative of
the current market conditions.” The converse was true of
the first settlemen, with buyers unwilling to settle at a
higher price. With the back end of March quickly
approaching, buyers suggested if neither settlements was
followed by end-of next week a combined March/April
settlement could arise. “While I would immediately follow
the second settlement, I don’t believe it will be followed as
the other producers are very reluctant to settle at such a
lower price. What I see happening is a combined settlement
for March and April as there is such a big gap between both
initial settlements,” a buyer said, with another calling such a
settlement “a definite possibility”. However, a March CP
settlement was not completely lost, with some sellers further
suggesting both parties meet midway and settle at Eur510-
515/mt FD NWE. Direction from Asia pointed to a
downward slope in CPs for April, with the first nominations
announced $50/mt lower at $560/mt CFR Asia. Asia was
continuing to play an important role in the European March
contract negotiations, with buyers pointing out Asia settling
at a rollover for March contracts and also the recent price
drops in the Asian spot market. In further news, producers
were unfazed by Saudi Arabia’s Rabigh Refining and
Petrochemical Co’s (PetroRabigh), recent announcement it
would sell all its MEG in Asia and Europe based on term
contracts. “It’s difficult to say exactly how it will affect the
European contract market but I think everyone, regardless of
whether they are based in Europe or not, has to sell at the
market price,” a producer said. PetroRabigh, a joint venture
between state-owned Saudi Aramco and Japan’s Sumitomo
Chemical, was scheduled to make its first deliveries of MEG
from its 600,000 mt/year plant at Rabigh at the end of
March. But due to the delay of the start up its ethane-based
steam cracker, the start up of its MEG plant has been pushed
back to the first week of April. Meanwhile, on the spot
market prices truck prices remained relatively stable this
week with the higher end edging up just Eur5/mt. While
deals were reported done as high as Eur450-470/mt FD NWE
and Antwerp for March delivery, trades were again also
reported at lower levels of Eur410/mt FD NWE, March
delivery. In bulk, the market was subdued this week with no
reported bulk business done. However, sources suggested
prices were likely to fall next week as cheaper Iranian
material was scheduled to hit Europe. “While the market has
been very, very quiet this week and over the last three weeks
in fact, let me just say this is about to change as there will
be some large import volumes coming into the market next
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN
week,” a source said. According to Platts data, the last time
Iranian material was sold in Europe—at the beginning of
January—bulk spot prices fell by over $65/mt.
United States
The spot export and import markets were quiet. Exports to Asia
were not happening as it would require US prices well under 20
cents/lb FOB. Participants wondered if spot exports would ever
get going again considering the world-scale plants set to come
online in the Middle East and the change in trade flows those
plants would cause. US MEG length traditionally went to Asia
but the new units in the Middle East were thought to be able to
satisfy most of that demand, which could lead to a reduction of
production in North America. Another impact of the new
capacities could be a developing import market but there were
import duties and logistic barriers that might keep imports at
bay. There was an import offer earlier in the week at 22-23
cents/lb CFR Houston but there was no interest. “If (the offer)
began with 1 it would be taken out immediately,” a source said.
With end-users not even taking contract minimums, they would
not be able to take spot material which left traders or a producer
as an import target. Traders, however, risked being undercut by
producers on price if they tried to move MEG below current
market prices. And producers would not need to import given
the sorry state of demand. The PET market had yet to take off for
what’s normally its peak demand period in early spring and the
anti-freeze market was also said to be soft on buying interest.
Domestic railcars were heard selling for 26 cents/lb for some mid-
size buyers but contracts to larger volume polyester customers
were at least 2 cents/lb lower. “At this point we just hope to be
one of the survivors of the current (economic) mess,” a producer
said regarding the state of his industry.
Asia
Monoethylene glycol in Asia stayed largely stable this week,
steadying on end-users buying on the belief that prices have
touched bottom, and late-week crude strength. But bursting
inventories in eastern China and the impending start-up of
two new capacities in Saudi Arabia applied downward
pressure on prices. Though some polyester makers still
actively sought bargains with bids at below $430/mt CFR
China, Friday saw deals done at $440/mt. Negative margins
for naphtha-based producers were causing them to keep
capacities idle. Taiwan’s Nan Ya Plastics has no plans to restart
its No. 1 line after it was shut March 3 following an explosion
at Formosa Petrochemical’s No. 1 steam cracker, even after the
cracker’s restart Thursday night. Its only operating line was
the No. 4 (700,000 mt/year). State-run CPC Corp’s plans to
shut its No. 3 cracker March 18 due to poor margins, and
hence cut 15% of ethylene supplies to Oriental Union
Chemical Corp and China Man-Made Fiber Corp would have
little impact on MEG. OUCC’s 250,000 mt/year plant in Lin
Yuan has been running at 60-70% and has been thriving
partly on imported ethylene, but it may reduce its output of
MEG. CMFC, meanwhile, has been operating its 75,000
mt/year No. 1 line in Kaohsiung intermittently due to weak
margins, while ethylene oxide output from its No. 2 line of
15
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
the same capacity has been mainly used to make derivatives
that go into detergent. Its MEG output has been consumed
captively at its own polyester plant. Supply of spot cargoes
from SABIC and SHARQ has been ample such that
PetroRabigh’s delayed start-up of its MEG plant to the first
week of April, as it was trying to start up its cracker for the
fourth time, has had little impact. India remained the only
bright spot in Asia with domestic supply relatively tight and
polyester plants running fully, though some were citing fewer
fresh orders. Separately, sources said Shell announced its ACP
for April at $560/mt CFR, down $50/mt.
Propylene
Europe
Spot free polymer grade propylene on a FD NWE and CIF
NWE basis were assessed in alignment with one another at a
mid-point of Eur430/mt this week, following a number of
trades reported done. A German producer said Friday, that he
had sold a 300mt spot parcel earlier in the week at Eur435/mt
FD NWE for April delivery. Later Friday, a Northwest European
trader indicated traded polymer grade levels in the range of
Eur430-435/mt CIF NWE, but was unable to officially confirm
price or counterparty details. An integrated market participant
said he had purchased polymer grade at Eur430/mt FD NWE
for but could not confirm counterparty details, but added he
had seen a number of sellers offering in this range. One buyer
said he had done spot business the week before at Eur400/mt
FD NWE and Eur450/mt FD NWE, either side of the Platts
assessed range, while another source said she had been offered
material at Eur460-470 this week but had “no spot buying
interest—you won’t see us on the spot market to sell or buy.”
Chem grade levels were assessed steady as trading evidence
was said to be thin, and prices pegged as stable. Generally
speaking, source described the market as balanced this week,
with most crackers still running at reduced rates. With the
second-quarter looming, the topic of quarterly versus monthly
contract price structure has become a subject of consideration.
Most sources said it was too early to be making speculative
target levels for April or Q2. However, sustained cracker run
rate reductions combined with cheaper prices in alternative
feedstock LPG, meant that due to falling demand, a big change
was seen in naphtha prices, according to sources late this
week. A flattening out of the forward naphtha curve was
described by sources during the week, leading to a contango
structure evident both in swap and the physical naphtha
market. As one propylene buyer explained, “There is still a big
uncertainty in underlying demand. Naphtha will be a huge
driver on the April contract price. February and March contract
levels included a pass through on naphtha. It really depends
where naphtha is at closer to the time of settlement. But any
increase in propylene contract values without an increase seen
in crude or naphtha wouldn’t be justified.” Downstream in
polypropylene, March monthly contract price settlements
continued to only show a pass through of up to Eur30/mt
versus Platts assessed February values. Buyers said they were
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN
choosing to wait and see developments in demand levels
before deciding what increase they were prepared to accept as
a monomer price pass through.
United States
One producer confirmed settling March PGP contracts up 1
cent/lb at 29 cents/lb. March CGP settlements were a bit
more cloudy due to a split settlement. Initially, Shell had
settled March with some of its customers up 2 cents/lb, a
buyer told Platts. Consequently Lyondell and ExxonMobil
were heard to have settled up one cent/lb however
confirmation was unavailable at time of press. “It’s likely a
split settlement at 1-2 cents up,” said one participant.
Meanwhile, spot propylene prices moved down as activity
continued to be slow this week. Arbitrage opportunities to
Europe and Asia were closed and domestic appetite for
material thinned. RGP started the week off at just over 23
cents/lb MtB pipe and gradually edged down throughout the
week. Tuesday March RGP was offered at 23 cents/lb MtB
pipe however buyers were absent and no confirmed trades
were heard at market close. March RGP prices fell further
mid-week when a deal was heard done after close of
assessment at 20 cents/lb MtB pipe. Details on the volume
and parties involved were not immediately available. March
offers opened Thursday at 21 cents/lb MtB pipe against bids
seen at 17 cents/lb MtB pipe. The week closed on a quiet
note with RGP assessed at 19.75-20 cents/lb. No PGP or CGP
deals were heard done this week leading one participant to
point out that spot propylene activity was unusually high in
February and had slowed significantly this month.
Latin America
In Brazil, propylene price was heard at $600/mt FOB contract in
March, which was an increase of 6% compared to last month.
Demand was reported in the Brazilian market as normal with
the plants working at 100% capacity. Downstream,
prolypropylene offer prices for the Brazilian domestic market
were heard in March at Reals 200/mt lower compared to last
month. Following the price reduction, the producer reported PP
offer prices in Brazil at Reals 4,000/mt CIF raffia, Reals 4,250/mt
CIF co-polymer injection and at Reals 4,400/mt CIF random. In
the Mexican domestic market, propylene was reportedly
increasing in price on all grades for March. Polymer grade
propylene contract pricing was heard at $577/mt FOB which
reflects an increase of 35.09% as compared to the previous
month, and in local currency at Pesos 8,401/mt FOB, an
increase of 28.21% over the same time period.
Asia
Prices were range-bound until Thursday, only to gain $20/mt
Friday upon revelations that Secco’s steam cracker outage in
Shanghai would drag longer than expected. Secco produces PP
and acrylonitrile, but has excess propylene capacity that it sells
locally. The derivative plants continued to run a week after the
cracker was idled. On Friday, Secco said it will shut down the
derivative plants as its propylene stocks have been depleted.
Taiwan’s Formosa had production problems too surrounding its
16
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
No 1 and No 3 steam crackers. These plant issues prompted
traders to clamor for propylene cargoes Friday. LG Chem
claimed to have sold an any-April cargo at $700/mt FOB Korea
to an unidentified Western trading firm. The deal could not be
confirmed. Korean and Western trading companies said they
were prepared to pay $680-690/mt FOB Korea for April cargoes.
Nippon Oil sold an April cargo on Wednesday at $730/mt CFR
Taiwan to a Japanese trader. By Friday, selling interest to China
and Taiwan had climbed to $760-770/mt CFR China (L/C at
sight), while buying interest generally did not pass $740/mt. A
few consumers said they would draw the line at $720/mt CFR
China. There remained a propylene shortage in SE Asia, with
production down in Indonesia and the Philippines. Indonesia’s
PP producers have cut runs rather than import cargoes. A ship
shortage raised the cost of freight, also inflating propylene offers
into SE Asia. On Friday, it would have cost about $120/mt to
ship a 1,500 mt propylene cargo from South Korea to Indonesia.
Downstream, the outlook for PP and other derivatives was soft.
The raffia and injection grade PP market closed Friday at
$870/mt CFR China, up $20/mt from a week ago. Although the
general outlook for PP was soft, prices momentarily found
support too from Secco and Formosa’s production woes. In the
longer-term, market participants were expecting PP prices to
encounter downward pressure from massive new supplies from
India and the Middle East within weeks.
Butadiene
Europe
European butadiene producers reported this week an
unwillingness or needing to sell any volumes due to their
systems being in balance. “We are balanced and we don’t
have to or need to go to into the market,” a producer said.
However, prices remained under pressure due to persistent
long supply in the crude C-4 chain. No transactions were
reported done this week, although both producers and
traders differed in their views over price. Although producers
continued to value FD NWE butadiene spot prices at
contract price levels, traders viewed FOB Rotterdam prices at
around the $300/mt FD, with some levels talked as low as
$200/mt. However these levels could not be confirmed via
traded activity or firm bid/ask levels. “Traders seem to be
putting volumes together for export,” said the producer, adding
the overhang in supply still remained. Sources said the tightness
in the US was expected to materialize as crackers continue to
favour lighter feeds, such as propane and butane, as opposed to
more expensive naphtha. This would likely see more limited
butadiene due to smaller C-C4 yields. “The expectation was that
crude C-4 would tighten [in the US],” the producer said.
However, another producer said: “The US tightness is clearly not
there yet, if they can buy all those tones ex-Europe [at the lower
prices], continuing: “It looks like there’s a lot of material and it
was [proving] difficult to get rid of stocks.” “People were
suffering containment problems and are having to sell at a
discount,” said the first producer. Shipping reports showed that
some volumes had moved from the ARA region to the Far East,
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN
with around 1,800 mt said to have been shipped by one trader
on the Gasprodigy. Material was also said to have moved from
Hazira, India on the Richmond Bridge destined for Korea, at
around $200/mt. “I think that $300/mt is too low because it is
below naphtha,” the producer said. A similar difference of
opinion was heard in C-C4 prices, with one producer reporting
a factor of 0.6-0.7, below last week’s assessed level, however
other sources said that it remained pegged at co-crack value, or
around 0.8-0.9. Producers who had balanced their systems were
said to be unwilling to sell below the co-crack value. Shipping
reports showed that round 2.1kt of crude C-4 was moving from
ARA to the US Gulf Coast on the Omegagas, with a trader said
to be the shipper. A further 12kt was loading in ARA, destined
for Houston, with a trader said to be the seller. In related news,
US-based chemical major Dow will reach on-spec styrene-
butadiene rubber production out of its its new 60,000 mt/year
styrene-butadiene rubber plant in Schkopau, Germany, by “the
end of the month”, Dow’s global synthetic rubber business
director, Ralf Irmert, said this week. “We will start full
commercialization [of the plant’s output] at the end of the
month,” Irmert said. The plant started ramp-up procedures in
mid-February. The unit has been running a series of tests since it
started in February to prepare for full commercialization of its
on-spec SBR, according to Irmert. Although the new plant
includes a capacity rights agreement with Japan’s JSR
Corporation, Dow owns and will operate the new unit. Its
synthetic rubber output will be used to produce tread profiles in
tires. “This is the next step strengthening Dow’s position in the
most advanced rubber polymer solution. Our new products
enable our tire producing partners to implement significant
advantages in areas like rolling resistance—fuel efficiencies and
CO2 emissions—and grip performance, while increasing their
supply security,” Irmert said. A boost in the Northwest
European MTBE price was not enough to lift raff-1 values. The
value of MTBE versus gasoline increased 10 factor points over
the week as the switchover from winter to summer spec gasoline
approached. Last week, MTBE was assessed at a factor of around
1.27. However Raff-1 supplies were still perceived as long with
the impact of the supply overhang in upstream crude-C 4 and
butadiene also weighing on Raff-1 sentiment. A 1.5kt parcel,
loading on March 14 was reported done at factor of 0.92 FOB
this week, with a producer selling to an un-named gasoline
blender, the seller reported. Delivered CIF cargoes would
command a premium over FOB loading. The NWE MTBE
market is tight for prompt material, and participants reported
difficulties in locating FOB Rotterdam product. Demand for
NWE MTBE from Scandinavia, the Baltic and the Mediterranean
was bullish for the market, some sources said. “Some product
could come into Europe, in April, when one producer is
thinking about switching over to make MTBE at the end of
March,” a market source said.
United States
Butadiene consumers reported ample supply, even with
Shell’s 585 million lbs/year butadiene unit at Norco,
Louisiana, idled. While the OL5 1.8 billion lbs/year ethylene
cracker restarted, it was unclear as to when the BD unit
17
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
would return online. End users were reportedly being
supplied from inventory at Norco and from Channelview,
Texas. However confirmation from Shell was unavailable by
time of press. Looking ahead to April, some suggested the
market saw the bottom when the March CP hit 25 cents/lb.
April contracts would see “a roll over at best,” one trader
said, but many consumers pointed to poor demand as
justification for yet another decrease. Since October 2008,
US butadiene contracts have tumbled by 97 cents/lb.
Latin America
Butadiene was reported by a Brazilian producer as having
fallen in price by 10% compared with February. Butadiene
prices in the Brazilian domestic market were at $580/mt FOB
and in local currency at Reals 1,380/mt FOB. “Apparently,
butadiene consumption is resurging in the country due to
the reactivation of the automobile industry,” said the source.
In Mexico, the last crude butadiene export was heard as
carried out during the second half of February at a quantity
of 3,673 tons to the US. The price of the last Crude C-4
export from Mexico was heard at $480/mt FOB.
Asia
NEA: Emerging demand from late April pushed NEA prices by
$5-10/mt on the week. The FOB Korea benchmark prices edged
up $5/mt on the week. YNCC sold a 1,500 mt spot cargo at
$520/mt FOB Korea to Daelim for H2-April loading. Platts did not
reflect the deal in Friday’s assessment fully as the two firms have a
capital relation. YNCC has one more cargo to sell for April loading
with an offer price at $530/mt FOB Korea, while traders were
quoting non-firm bids at $450-460/mt FOB Korea. End-users’ tank
space in China/Taiwan was reported to have been full following
an influx of deep-sea materials from Europe and Brazil, but some
space was seen to become available from end-April/early May as
most deep-sea materials were due to be delivered by late April. A
buying idea for end-April/early May was reported at around
$500/mt CFR Taiwan/China from big end-users. A Japanese trader
sold a 1,500 mt cargo at $500/mt CFR China for end-April/early
May delivery. On the other hand, small end-users were willing to
pay much higher at $560-570/mt CFR China. In fact, ex-Korea
cargo was reported to have been sold at $570/mt CFR China for
late April. The prices basis CFR China rose $10/mt, while a price
increase in Taiwan was limited at $5/mt CFR on additional
supplies in the region amid a planned shutdown. Taiwan’s TSRC
will shut its 100,000 mt/year SBR plant in April for turnaround.
SEA: The prices basis CFR SEA rose $10/mt, reflecting persisting
tight spot availabilities. Arrivals of deep-sea materials were limited
to SEA as most end-users in the region only had limited tank
space, so they were not able to take large deep-sea materials. This
week, a Japanese trader sold a 1,500 mt cargo at $620-630/mt CFR
SE Asia. The price level was reported to have been higher than the
current market, as the cargo was split by three end-users in the
region. Buying interests for normal-sized cargoes were reported at
the mid-$500s/mt CFR SEA, while selling indications were heard
at $630-640/mt CFR SE Asia. In related plant news, BST
Elastomers restarted its 65,000 mt/year SBR and 50,000 mt/year
BR plants on March 10.
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN VOLUME 32 / ISSUE 11 / MARCH 18, 2009

POLYMER FEEDSTOCKS: AROMATICS

Paraxylene Polymer Feedstocks – Aromatics

Europe Weekly Average Spot*

Styrene FOB Korea ($/mt) 826.25-827.25
An initial settlement for the long-awaited Northwest Styrene FOB Rdam ($/mt) 811.25-812.25
European March paraxylene contract price was announced Styrene FOB USG (¢/lb) 34.83-35.33
at Eur695/mt this week, with consumer Cepsa Quimica
Paraxylene FOB Korea ($/mt) 848.00-849.00
confirming the figure Monday. By Thursday the CP appeared
Paraxylene FOB Rdam ($/mt) 766.00-770.00
to be fully settled, with Oxynova confirming it had followed Paraxylene FOB USG ($/mt) 821.00-826.00
along with Total and ExxonMobil—although the latter could
not be confirmed. This saw the final settlement down by
Monthly Contract Price
Eur15/mt on the rumoured settlement of Eur710/mt Styrene FD NWE (Eur/mt) (MAR) 636.00-661.00
between BP and ExxonMobil. Tight supply conditions Styrene FOB USG (¢/lb) (FEB ) N/S- N/S
seemed about to change, following unconfirmed reports that
Artenius could extend its force majeure at its PTA plant Paraxylene CFR Asia Average MAR 830
Paraxylene FD NWE (Eur/mt) (Mar) 695.00
beyond March, which would see 20-30kt more PX available Paraxylene FOB USG ($/mt) (mar ) 40.50
a month, although one trader pointed out: “There is not a
* Average prices for week ending previous Friday. # US PX CP are typically settled retroactively,
lot of extra PX this month because all Russian material is prices refer to most recent settlement. To convert Cts/lb to $/mt, multiply by 22.046.
being exported out of Europe,” adding, “I could buy in
Rotterdam right now, but the most I would pay is $750/mt US Styrenics Prices
for 5kt. The range is $760-790/mt.” (¢/lb)
100
United States US Domestic Dlvd GPPS
Spot PX values rose in the US following the higher Asian 80 Styrene Spot USG

market. There was notional buy interest at $820/mt FOB

USG, which was the price needed to take out current Asian 60
bids at $870/mt CFR China/Taiwan. However, given talk in
Asia of sellers holding out for $900/mt CFR, less $50/mt 40
freight, put notional offers out of the USG at $850/mt FOB.
Downstream demand was unspectacular from the PET
20
market, but producers were set to increase their margins in
March on the 0.5 cents/lb decrease in the month’s PX
0
contract to 40.5 cents/lb. PET producers initially had a 7 22-Oct 19-Nov 17-Dec 21-Jan 18-Feb 18-Mar
cents/lb price hike on the table for March, but they were
heard close to be settling for a 2 cents/lb increase.
Notes: All aromatics prices reflect assessments at close of previous Friday.

Asia
For the week, paraxylene rose $8.10/mt on the FOB Korea
benchmark and $7.60/mt on the CFR Taiwan/China
benchmark, with three bids during Platts Market on Close
assessment process this week. On Thursday, producers SK
Energy and GS Caltex placed bids at $855/mt FOB Korea for
any-April parcels, while Shell sought an H1-April CFR
Taiwan/China cargo at $870/mt. None of the three bids were
lifted. Market watchers said it was near impossible to get FOB
Korea parcels with both SK Energy and GS Caltex out on a
bidding war. Another market watcher said Hyundai Oil would
be the only likely FOB Korea seller, but the company has
remained silent. “CFR cargoes are more readily available. I
believe traders have around seven to eight cargoes among
them and will make offers only when the price exceeds
$900/mt,” he said. He added that the conversion cost for
downstream purified terephthalic acid makers has been reduced
following a fall in energy prices. “Conversion costs are now at
around $100 instead of $150. Japanese makers peg their
conversion cost at $130,” he said, implying that PX has room
to hit around $900/mt CFR Taiwan/China. For the day, PX
slumped $2.50/mt and $2/mt on the FOB Korea and CFR
Taiwan/China benchmarks, respectively, without any support.
The Asian contract price nomination for April will be
announced next week so the market is sitting tight. Meanwhile,
isomer-MX fell $2.75/mt to $633/mt FOB Korea and $648/mt
CFR Taiwan. SK Energy and KP Chemical are said to be in the
process of negotiating term contracts and so will not be making
open bids nor offers. There was more liquidity for isomer-MX
this week with off-window CFR China deals heard transacted at
$638/mt and $650/mt for standard-size parcels. Late Friday,
there was also an April parcel bound for China being offered
between $640-650/mt (L/C at sight). There was also a tender
offer for 10,000 mt of isomer-MX by Mangalore Refinery and
Petrochemical Limited. The Indian company has an annual
capacity of 360,000 mt/year and hold regular tenders as it does
not have a PX facility.

18 Copyright © 2009, The McGraw Hill Companies

 PLATTS POLYMERSCAN
Styrene
Europe
The recent US to Northwest Europe styrene monomer
arbitrage and cuts in polystyrene production have
dampened a recent surge in SM spot prices, sources said this
week. The pressure also led to a flattening of the March-
April backwardation. Although a March parcel was reported
traded as high as $890/mt FOB Rotterdam, midweek, prices
were seen lower by the end of the week, with both March
and April quoted at $800-820/mt FOB R’dam. Earlier, a 1kt
March parcel traded at $815/mt, with a second 1kt repeated
at that price. “It doesn’t surprise me that buyers have been
dropping out [as] supply-side was still weighing on March,”
a producer said Thursday. “I believe this is only a small
[price] correction...I don’t think it will go lower than these
levels,” a trader said. “That [arbitrage] volume is mostly for
the producers, not to sell in the spot market.”
United States
Prices rose 1.75 cents/lb on the week to 35.50-36 cents/lb
FOB USG from strong export demand for late March
loading cargoes. H2March deals were done at 35.25 cents/lb
and 35.75 cents/lb FOB USG. Following the deals, offers
climbed to $800/mt FOB USG (36.30 cents/lb) against no
bids. Since February 2, styrene prices have jumped 27%, or
7.50 cents/lb. Overall, an estimated 70,000mt was heard to
be heading out of the USG in March with 40,000 tons
headed for Europe and the remaining 30,000 tons destined
for Asia. This week freight rates were pegged at $45-50/mt
from the USG to Rdam; $65/mt from the USG to Korea and
$80-85/mt for USG-China. Sources said weak propylene
oxide demand caused POSM producers globally to operate
at reduced rates and enter the spot market as buyers. For
every 1 pound of PO produced, about 2.2 pounds of styrene
is manufactured. “If you’re sitting on an EBSM unit, you’re
probably smiling,” one manufacturer said, referring to the
profitability in North American EBSM plants. Many
participants questioned whether styrene’s strength was
sustainable as NWE PS suppliers announced they were
reducing rates. In the domestic market, some feared that
producers would try to announce a hike of 2-3 cents/lb in
April given current spot transaction levels. However, weak
domestic demand would be unable to support the increase,
consumers complained. “[We’ll] force price increases into a
market that can’t take it,” he explained. In feedstocks,
benzene closed at 130 cents/gal FOB USG for March and
132.50 cents/lb FOB USG for April. Ethylene ended the
week at 23-23.5 cents/lb. Houston Ship Channel nat gas
prices ticked up almost 15 cents from Thursday to average
in the upper $3.60s/MMBtu.
Asia
More news of supply disruptions in an already tight market
caused Asian styrene monomer price to shoot up this week,
gaining $61.25/mt on the FOB Korea and $85/mt on the
CFR China benchmark this week. The Asian SM-benzene
19
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
spread hit a 29-month high of $400.50/mt Friday, as SM
prices continued to surge on tight supply outpacing modest
gains seen in feedstock benzene prices. SM prices closed
$850/mt FOB Korea basis with an April SM cargo traded at
$850/mt FOB Korea, sold by producer Samsung Total
Petrochemicals to a trader. SM prices continued their
untalented bull-run in recent weeks as tight availability
combined with news of an outage at Shanghai Secco’s
steam cracker, kept sentiment firm. The company may also
have to shut its SM plant due to lack of feedstock, ethylene,
and delay its March contract supplies, market sources said.
Shore-tank SM inventory in East China was also heard to
have fallen about 15,000-20,000 mt this week to 30,000 mt
this week, further bolstering sentiment. Local price of SM
traded in eastern China shot up Yuan 700/mt ($102/mt) on
the week to Yuan 7,100-7150/mt ex-tank basis (or $872/mt
on an import parity basis), as falling stocks left few willing
sellers on the market. On the CFR China market, a Korean
producer was bidding for an H2-March and an H1-April
loading Korean cargo at $880/mt CFR China (L/C 90 days),
while no offers were seen. Two cargoes of open origin was
heard to have been sold (after market close) to a Chinese
trading unit at $880/mt CFR China basis. In other news,
Japanese SM producers said they plan to raise SM output in
April, the start of the new fiscal year, but will hike their
operation rates in a staggered fashion. Styrindo Mono
Indonesia plans to restart its 100,000 mt/year No.1 SM
plant early April following improved downstream demand
and good margins, a company source said Wednesday.
South Korea’s SKC restarted its Ulsan SM unit, while
Thailand’s IRPC and Siam SM will restart their SM units
over the next week.
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Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN VOLUME 32 / ISSUE 11 / MARCH 18, 2009

POLYMER FEEDSTOCKS: INTERMEDIATES

Purified Terephthalic Acid Polymer Feedstocks – Intermediates

Europe Weekly Spot

PTA CFR China ($/mt)* 696.3-700.5
Purified terephthalic acid was looking increasingly tight
this week, with Artenius’ PTA production plant at Wilton EDC CFR FE Asia ($/mt) 200-205
in Northeast England currently in shutdown. There were EDC FOB NWE ($/mt) 185-205
EDC FOB USG ($/mt) 140-150
further reports that Artenius could extend the force
majeure beyond March, athough a company source VCM CFR FE Asia ($/mt) 580-590
declined to comment, saying that the force majeure was VCM FOB NWE ($/mt) 430-440
still in place for March only. A trader said, “A major VCM FOB USG ($/mt) 370-380
consumer is down, and may remain down longer than
Acrylonitrile CFR FE Asia ($/mt) 930-940
originally announced. This will clearly influence the Acrylonitrile FOB USG ($/mt) 720-730
supply/demand balance, with 20-30kt more PX hitting Acrylonitrile CIF Mediterannean ($/mt) 800-810
the spot market in a month.” A producer said, “The PTA
Monthly Contract Price
market is still looking good, despite a third of the PTA FD NWE (Eur/mt) (Feb ) 568-608
production capacity being out. We are seeing an PTA Delivered USG (¢/lb) 40.00-40.25
economically induced supply/demand tightness. PTA in US domestic prices reflect transaction pricing for medium-sized customers.
Europe mostly goes into food packaging, and no one is * Average prices for week ending previous Friday.

going to stop buying food, even in a recession.” A source

added, “Imports are looking more attractive for the PTA Platts Asian PTA versus Paraxylene ($/mt)
industry now, with the market so tight.” In Asia, buyer ($/mt)
interest had picked up, as Chinese polyester producers 1000
returned to the spot market to buy cargoes. PTA CFR China
PX CFR Taiwan
United States
800
The March PTA contract was unconfirmed to have
concluded slightly lower at 40.125 cents/lb following a
PX settlement at 40.5 cents/lb, which was down 0.5
cents/lb from February. A 0.5 cents/lb decrease in PX
600
would equal roughly a 0.335 cents/lb reduction in the
formula derived PTA contract. The lower contract was not
expected to give demand a jump start as PET producers
have not reported any significant increase in demand. 400
The US contract is nearly $185/mt over the China’s PTA 24-Oct 21-Nov 19-Dec 16-Jan 13-Feb 13-Mar
spot price which means US PET makers could face and Notes: All intermediates prices reflect assessments at close of Thursday,
influx of lower cost PET imports from Asia. with the exception of PTA CFR China.

Asia
Purified terephthalic acid prices in Asia were supported
over the past week mainly on continued consumption
from end-users in key markets. Polyester producers in
China, running their plants at an average rate of 70-75%,
were caught low on PTA inventories, and some were seen
returning to the spot market to buy cargoes. Offers
Thursday were made at $705/mt CFR China, though end-
users placed buying ideas below $700/mt. Meanwhile, the
domestic paraxylene situation appeared to be still
relatively tight, as poor economics were making state-
owned producers run their plants below full rates.
Sinopec Jinling Petrochemical, for example, started up its
600,000 mt/year PX unit in Nanjing in December, and
has not been able to raise rates to 100%. Market
participants speculated that the plant could be shut,
though this could not be confirmed by the company.
Some said the summer season could herald better times
for PET bottle chip makers, which within the polyester
sector are said to be enjoying the best margins. But even
as producers maintain offer levels, prices were assessed
$32.50/mt lower on the week to $940/mt FOB NE/SE Asia.
India remained the bright spot within the region, as
polyester producers were running at full rates, while
planned turnarounds in the country tipped supply to the
tight side. While inquiries thinned midweek due to a
holiday in India, privately-negotiated deals for cargoes
loading in H2 March were reported done at $685/mt and
$700/mt CFR India (L/C 90 days). But Indian polyester
producers said their inventories were slowly building up,
as their customers, which have previously also bought
large quantities of polyester, were seeing fewer fresh
orders and in turn were buying less feed.

20 Copyright © 2009, The McGraw Hill Companies

 PLATTS POLYMERSCAN
Acrylonitrile
Europe
The European spot acrylonitrile price assessment continued to
climb this week to be assessed at $800-810/mt CIF Med. One
producer described seeing “positive signs” in the market,
targeting spot prices of $850-900/mt CIF Med. He said that
although he had not achieved these levels, he had traded at
over $800/mt CIF Med in the week. A trader said he had also
heard producer target numbers as high as $900/mt CIF Med,
adding that “if someone were to bid $850 then it (a trade)
would happen, although buyers levels are still probably around
$800/mt CIF Med.” Sellers views met some resistance though,
as a European ACN consumer in the fiber business said that he
had been discussing a spot trade level at under $800/mt CIF
Med. “Buying over $800/mt makes it difficult to keep business
profitable. End-user markets do not allow us to increase our
prices as demand is still very depressed,” he said. However a
gentle improvement in demand was described elsewhere, with
fiber production rates in some areas of Europe said to be
running at normal. Producers were keen to pass down the
Eur42/mt propylene March contract price increase in contract
values, although no settlement was reported settled yet. I think
it will be a late month settlement,” one said.
United States
Spot this week climbed $20/mt on rising propylene and
notional price ideas. One trader was offering at $730/mt FOB
USG but was turned away as the consumer did not need
material. Some said demand was weak because “tanks in China
are getting full.” Others however said there was an uptick and
expected transactions to be reported next week. This week, no
exports or spot deals were heard. Meanwhile USG supply was
balanced because domestic producers were operating at reduced
rates. Also Ineos’ Green Lake, Texas, 460,000 mt/year facility
completed its turnaround and was operating on-spec and at
pre-maintenance levels. In feedstocks, March chemical grade
propylene contracts initially settled up 1 cent to 27.50 cents/lb
but one seller was still holding out, sources said.
Asia
Asian acrylonitrile prices were assessed $20/mt higher this
week, mostly as offers climbed higher on a push from firm
feedstock propylene prices. Asia’s propylene prices were
assessed at $735/mt CFR China, buoyed by cracker outages
in China and Taiwan. ACN producers raised offers up to
$1,000/mt on propylene costs, traders and producers said,
however, buyers were still under the $900/mt mark. Spot
offers of Russian origin were heard to be targeting a price
over $900/mt to the China market. Domestic prices in
China were supported by additional news of production
cuts at Secco’s 260,000 mt/year ACN unit. China’s
Shanghai Secco Petrochemical may need to shut its ACN
plant next week if it is unable to get the steam cracker up
and running soon, a company source said Thursday.
Domestic prices were at Yuan 7,400-7,500/mt ex-tank basis.
In South Asia, some possible offers for floating cargoes
21
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
were heard under $850/mt CFR, but the bid-offer range was
at $850-890/mt for a March/April cargo, a trader said.
Ethylene Dichloride / Vinyl Chloride Monomer
Europe
EDC: Prices edged up $10/mt this week as the market
continued to see tightened conditions as chlor-alkai production
rates remained low amid a weakened downstream PVC market.
Traders reported prices for EDC rising $10-15/mt with deals
reported done at levels above $180/mt. “EDC prices are starting
to move up again, possibly because there is less chlorine
available as both caustic and PVC demand continue to
weaken,” a trader said. Caustic prices fell a further $80/mt FOB
Rdam this week, with offers above $500/mt FOB deemed too
high by traders to generate buying interest. “There is no activity
in the spot export market, no one wants to buy and there is no
demand, so even an offer $500/mt FOB is seen as much too
high,” a trader said. VCM: The market continued to be affected
by a weakened downstream PVC market, as producers and
traders reported no export business for European VCM. “No
one is buying VCM at the moment because there is no demand
for PVC,” a producer said. Producer Shin Etsu was preparing for
its shut down this week, with it’s Botlek plant scheduled to
shut down for six weeks from March 18th. “We will be shutting
down for approximately 5-6 weeks in which time we will be
building up inventories, restarting at the end of April,” a
company source said.
United States
EDC: Ethylene dichloride values were unchanged on the
week as demand along the vinyls chain remained supressed.
Spot trade was murky this week and although some
participants talked of material moving from the US to Asia,
no confirmed fixtures were heard. Participants in the Asian
market were focused on April pricing and demand had
stalled, sources said. Upstream, raw materials continued to
pressure pricing as ethylene contracts were expected to fall
in March and chlorine remained weak. Downstream, PVC
export values slipped this week with April pricing pegged at
$560-580/mt FAS Houston. VCM: Vinyl chloride sellers
continued to face weak buy interest as EDC and PVC
demand floundered. Sources in the US PVC market reported
a slight uptick in demand however noted that the bump in
demand could simply be a function of pre-buying ahead of
proposed March and April price hikes. Export demand was
quiet as well with limited inquiries heard from Latin
American markets. “I don’t see a discernable change until
April or May,” said one source. Spot activity remained quiet
this week with no confirmed trades heard. Prices continued
to be talked notionally in the upper-$300/mt range and the
assessment closed level at $370-380/mt FOB USG.
Asia
EDC: The market was quiet this week, as both buyers and
sellers waited on the sidelines. It was not clear at this stage
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN
what will happen to prices in April. “I think we’ll see
something in two weeks,” a supplier said this week. Although
the EDC market was relatively tight, with the Chinese
currency improving, there were signs of low-cost US imports
starting to head to China. Meanwhile, buyers made it clear
that they were not prepared to pay above $200/mt CFR China
for April delivery. This was also the case for Indian buyers.
Meanwhile, sellers’ offers were upward of $250/mt CFR Asia.
While from the selling stand point the supply was still
reasonably tight, from the buying side the downturn on PVC
and pressure on VCM — combined with a long ethylene
market, was seen as reason enough to seek lower prices in
April. VCM: There were no new developments this week on
April pricing. Both buyers and sellers were watching and
waiting before announcing any price ideas. The situation was
similar to the PVC market where there was no clear pricing
for April. That said, there was pressure on the market and
although sellers were keen to keep prices stable from March,
this was “highly unlikely,” a supplier admitted. The problem
is that PVC prices have fallen and remain under pressure.
Added to this, ethylene supplies are ample and even with the
recent problems at one of Formosa’s crackers, the market
remained long. Also Chinese consumers were adequately
supplied having purchased plenty of VCM in January and
February. In terms of pricing and consumption, the situation
was very similar across Asia. Except in Thailand, slightly
firmer prices, plus $10-20/mt were heard versus China.
Dimethyl Terephthalate
Europe
European DMT had seen no improvement this week, despite
the lower-than-expected March PX contract price settlement
of Eur695/mt. DMT continues to suffer unforgiving prices in
upstream PX, with consumer demand increasingly poor as
the automotive market suffers global economic stress. This
could effectively see the market crippled by rising costs over
the next four months. A PX consumer said, “The PX contract
settlement is bad for DMT. Customers are not able to put
material into the market with these prices, and this will not
change. Eur710/mt would have been impossible for us, this is
not a range that makes sense. We were originally hoping for
something around Eur670-780/mt.” A PTA producer said,
“DMT is in a much bigger mess than PTA. DMT goes into the
car and building trade, and you don’t have to be a genius to
see how bad these industries are.”
News
Valero says total cost of
VeraSun deal is $552 million
New York —A bankruptcy court Wednesday approved Valero
Energy's $552 million purchase of eight VeraSun ethanol plants
at auction, Valero said. The purchase was broken down into a
22
VOLUME 32 / ISSUE 11 / MARCH 18, 2009
base price of $477 million, plus working capital and inventory
valued at $75 million, Valero said in a statement. Valero's
VeraSun purchase includes seven fully built plants and one
under development in Reynolds, Indiana; construction there
was halted when ethanol margins fell sharply. The seven other
plants are located in Aurora, South Dakota; Charles City, Fort
Dodge, Hartley, and Albert City, Iowa; Welcome, Minnesota;
and Albion, Nebraska. All the facilities have capacity of 110
million gal/year, except Aurora, which is 120 million gal/year.
The purchase of six of the plants is expected to close on April 1,
with Albion and Albert City following shortly afterward, Valero
said Valero's total 780 million gal/year of US ethanol
production capacity compares to Archer Daniels Midland's total
of more than 1 billion gal/year. "These are high-quality,
relatively new assets in good locations for buying feedstocks,"
Valero CEO Bill Klesse said in the statement. "We expect
increases in the (US) Renewable Fuel Standard to continue."
VeraSun sold a total of 17 plants at an auction that took place
Monday and Tuesday for proceeds of $993 million. The other
buyers were secured lenders using credit bids. Dougherty
Funding LLC submitted a credit bid of $93 million for the
Marion, South Dakota, production facility. A group of lenders
led by AgStar Financial Services submitted a credit bid of $324
million for the remaining plants in the so-called US BioEnergy
Group, which includes ethanol plants in Central City and Ord,
Nebraska; Dyersville, Iowa; Hankinson, North Dakota;
Janesville, Minnesota; and Woodbury, Michigan. And a group
of lenders led by West LB AG submitted a credit bid of $99
million for the remaining ASA Group plants, consisting of
facilities in Bloomingburg, Ohio, and Linden, Indiana.
New Motiva Port Arthur start date
represents delay of over a year
Houston — Motiva's new target date for completing the
325,000 b/d expansion of its Port Arthur, Texas, refinery has
been set for the first quarter 2012, a spokeswoman for Shell,
one of two partners in the joint-venture company, said
Wednesday. The project originally had a 2010 completion
target. "In downstream, we're nearly doubling the size of our
joint-venture refinery in Port Arthur, Texas," said Robin
Lebovitz, a spokeswoman for Shell, one of two Motiva 50%
partners. The "project is expected to be online during the first
quarter of 2012," she added in her e-mailed comment. In late
December, Platts reported Shell said the Port Arthur project had
been slowed down due to cost concerns and lower refined
products demand. Shell did not provide a revised target for the
project completion at that time. The Port Arthur project to
expand the refinery to 600,000 b/d was kicked off with a
December 2007 groundbreaking. If completed, the expansion
would rank Motiva Port Arthur as the US' largest refinery ahead
of ExxonMobil's 562,500 b/d refinery in Baytown, Texas.
Lebovitz Wednesday reiterated Motiva's earlier remark that by
adding 325,000 b/d of capacity, the expansion equates to
building a new refinery. "We are doing our part to enhance
American capacity and energy security," she said. Saudi Aramco
is the other partner of Motiva.
Copyright © 2009, The McGraw Hill Companies
 PLATTS POLYMERSCAN VOLUME 32 / ISSUE 11 / MARCH 18, 2009

NWE Benzene-Styrene spread narrows
as crude, Asia boost benzene
London — The benzene to styrene monomer spread narrowed to
between $420-$425/mt, the lowest level since February 27, as
benzene prices firmed against a backdrop of losses in its
derivative. Spot Northwest European benzene prices spiked for
the second consecutive day Wednesday morning. Bids for March
were seen up to $360/mt on a 1,000 mt CIF ARA basis. This is a
rise of $12.50/mt compared with Monday's assessment by Platts.
April bids were $10/mt higher at $370/mt 1kt CIF ARA. The
market has been boosted by rising crude futures prices and a
rising Asian market, which has opened the arbitrage between the
two regions. According to Platts data FOB Korea prices for the
second of May are $440/mt. CFR China prices traditionally
command a $20/mt premium to the FOB Korea price, suggesting
a $100/mt spread between the European and Asian benzene
markets. European traders have looked to sell to Asia since the
week commencing March 9. One traded noted, "China is around
$460/mt. With bids at $360/mt plus $80 to $90/mt for freight,
there's potential for a small margin." In fact, one major trader
was said to have fixed two vessels with around 18,000 mt for
export to Asia. In contrast, the styrene market saw demand drop
again, with more pressure on March as potential buyers were
switching their focus to April. This tipped the March-April
structure into a slight contango, of around $10/mt. March was
notionally pegged at around $780-$800/mt CIF ARA, while April
was seen pricing at around $795-$815/mt CIF ARA. Demand for
prompt styrene had been strong as propylene oxide styrene
monomer (POSM) producers had been buying large quantities of
styrene as they cut production due to poor PO demand yet still
had styrene supply contracts to fulfill. This dynamic lead to over
40,000 mt of styrene to be imported into Europe, due to arrive in
Rotterdam in the coming weeks. With most of the producer
demand now met, "there would be less buying interest for March
than two weeks ago," one producer said. Prices began to soften
last week as the US-Europe arbitrage opened, leading to around
40kt being fixed for arrival in March and April. In addition two
major polystyrene producers announced production cuts, leading
to the perception of more styrene becoming available in the spot
market, and reduced producer short-cover demand.

Global Production Update

Company Location kmt/yr Product Timing Status
Artenius Volos 80 PET Feb/Mar TA 4 weeks
Artenius Volos 80 PET Feb TA 4 weeks
Artenius Wilton 210 PET Jan OR normal
Artenius Accera 120 PET June SU postponed from Nov 07
Artenius Adana 115 PET Jan OR normal
Artenius Udine 80 PET Jan OR 70%
Artenius San Roque 180 PET Sep 08-Jun 09 SD economics
Equipolymers Ottana 160 PET Dec SU and FM lifted
Octal Oman 300 PET Feb/Mar SU line 2
Octal Oman 300 PET Jan SU 1 line
All All PET Nov/Dec OR Industry rates estimated 50% and below
Neopet Lithuania 308 PET Sep/Oct OR 50-60%
TA = scheduled turnaround; SD! = unplanned shutdown; SU = startup; DB = debottlenecking; OR = operating rate Contact: +44 207 176 6264

] Polymerscan Volume 32 / Issue 11 / March 18, 2009

Editorial: Sydney +61-2-9255-9842. Singapore +65-6530-6584. Tokyo +81-3-4550-8837. London +44-20-7176-6264. New York +1-212-904-3070. Houston +1-713-658-3206.
Client services information: North America: 800-PLATTS8 (800-752-8878); direct: +1-212-904-3070 Europe & Middle East: +44-20-7176-6111 Asian Pacific: +65-6530-6430
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Copyright © 2009 The McGraw-Hill Companies. All rights reserved. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise
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23 Copyright © 2009, The McGraw Hill Companies