] Polymerscan

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Volume 33 / Issue 23 / June 9, 2010

Americas and Asian Polymer Spot Price Assessments

FAS Houston US Contract US Domestic FOT Brazil* CFR PERU CFR FE Asia CFR SE Asia CFR South Asia China
($/mt) dlvd railcar ($/mt) ($/mt) ($/mt) ($/mt) ($/mt) Domestic
(cts/lb) (Yuan/mt)
PVC SUSP 810-820 42.50-43.50 936.70 -958.74 —- 930-940 944-946 954-956 —- —-

LDPE G-P 1499-1521 70.00-71.00 1542.80 -1564.84 1590-1600 1480-1490 1334-1336 1409-1411 —- 10900-11000
LLDPE (Butene) 1146-1168 66.00-67.00 1454.64 -1476.68 1470-1490 1370-1380 1169-1171 1189-1191 1299-1301 10100-10200

HDPE Inj 1102-1124 64.00-65.00 1410.56 -1432.60 1470-1480 1340-1360 1124-1126 1139-1141 1174-1176 —-
Bmldg 1080-1102 64.00-65.00 1410.56 -1432.60 1470-1480 1340-1360 1114-1116 1149-1151 1179-1181 —-
Film 1190-1202 66.00-67.00 1454.64 -1476.68 1440-1450 1360-1380 1124-1126 1139-1141 1189-1191 9500-9600
Yarn —- —- —- 1214-1216 1229-1231 —- —-

PP Homo Inj/Raffia+ 1234-1256 64.50-65.50 1421.58 -1443.62 1520-1530 1410-1430 1199-1201 1229-1231 1244-1246 10099-10101
Fiber —- 65.50-66.50 1443.62 -1465.66 —- —- —- —- —-
Copol 1300-1322 —- 1570-1580 1460-1480 1339-1341 1359-1361 1369-1371 —-
IPP Film 1254-1256 1274-1276 1289-1291 —-
BOPP 1254-1256 1274-1276 1289-1291 —-

PS G-P 1445-1455 66.00-68.00 1454.64 -1498.72 —- 1194-1196 1194-1196 —- —-

HIPS 1600-1610 73.00-75.00 1608.92 -1653.00 —- 1319-1321 1319-1321 —- —-
ABS Inj —- 112.00-114.00 2468.48 -2512.56 —- 1879-1881 1879-1881 —- —-

PET bottle grade 1367-1389# 1411-1433## 1179-1181 ** 1229-1231 ** —- —-

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 ($/mt)
Polyvinyl Chloride 3
HDPE film 1134-1136 1132-1133 1129-1131 1127-1128 1124-1126 1129.2-1130.8 Low Density Polyethylene 4
LDPE 1337-1338 1337-1338 1334-1336 1334-1336 1334-1336 1335.2-1336.8 Linear Low Density Polyethylene 5
LLDPE 1189-1191 1179-1181 1169-1171 1169-1171 1169-1171 1175.0-1177.0
High-Density Polyethylene 7
PP Homo 1219-1221 1214-1216 1209-1211 1204-1206 1199-1201 1209.0-1211.0
Polypropylene 8
FD NWE (Euro/mt) Polystyrene 9
LDPE 1295-1300 1295-1300 1295-1300 1295-1300 1300-1305 1296.0-1301.0 Acrylonitrile Butadiene Styrene 10
LLDPE 1245-1250 1245-1250 1245-1250 1245-1250 1245-1250 1245.0-1250.0 Polyethylene Terephthalate 11
PP Homo 1275-1280 1275-1280 1275-1280 1290-1295 1290-1295 1281.0-1286.0
FCA Antwerp (Euro/mt) Polymer Feedstocks: Olefins
LDPE 1275-1280 1275-1280 1275-1280 1275-1280 1280-1285 1276.0-1281.0 Ethylene 14
LLDPE 1225-1230 1225-1230 1225-1230 1225-1230 1225-1230 1225.0-1230.0 Ethylene Glycol 15
PP Homo 1245-1250 1245-1250 1245-1250 1260-1265 1260-1265 1251.0-1256.0 Propylene 16
FAS Houston ($/mt) Butadiene 17
LDPE 1554-1576 1554-1576 1554-1576 1554-1576 1499-1521 1543.0-1565.0
Polymer Feedstocks: Aromatics
LLDPE 1190-1212 1190-1212 1190-1212 1190-1212 1146-1168 1181.2-1203.2
PP Homo 1234-1256 1234-1256 1234-1256 1234-1256 1234-1256 1234.0-1256.0 Paraxylene 19
Notes: The weekly average represents the average of Thursday through Wednesday of the previous week. Styrene 20

Polymer Feedstocks: Intermediates

FOB Middle East Weekly Polymer Netbacks ($/mt) Purified Terephthalic Acid 21
Thursday Friday Monday Tuesday Wednesday Average Acrylonitrile 22
HDPE 1094-1096 1092-1093 1089-1091 1087-1088 1084-1086 1089.0-1091.0 Ethylene Dichloride /
LDPE 1297-1298 1297-1298 1294-1296 1294-1296 1294-1296 1295.0-1297.0 Vinyl Chloride Monomer 22
LLDPE 1149-1151 1139-1141 1129-1131 1129-1131 1129-1131 1135.0-1137.0 Dimethyl Terephthalate 23
PP Raffia/Injection 1179-1181 1174-1176 1169-1171 1164-1166 1159-1161 1169.0-1171.0
News 23
Notes: FOB Middle East netback denotes CFR Far East Asia assessments minus the prevailing container freight rate from
Al-Jubail to Shanghai for a standard 20-foot container.

The McGraw Hill Companies

 PLATTS POLYMERSCAN JUNE 9, 2010

Euro Contract Assessments (Euro/mt)

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

PVC susp 955-975 955-975 955-975 955-975 845-865 890-915 1153-1177

LDPE G-P 1375-1380 1375-1380 1350-1355 1375-1380 1360-1365 1180-1185 1660-1666

LLDPE C4 (Blown film) 1340-1345 1340-1345 1340-1345 1340-1345 1340-1345 1130-1135 1617-1623
LLDPE C4 (Cast stretch film) 1340-1345 1340-1345 1340-1345 1340-1345 1340-1345 1140-1145 1617-1623
LLDPE C6 (Blown film) 1400-1405# — — — — — —
LLDPE C6 (Cast stretch film) 1400-1405# — — — — — —

HDPE Inj 1210-1220 1210-1220 1210-1220 1210-1220 1210-1220 1062-1066 1460-1473

HDPE Bmldg 1195-1200 1195-1200 1195-1200 1195-1200 1195-1200 1053-1057 1442-1448
HDPE Film 1180-1190 1180-1190 1180-1190 1180-1190 1180-1190 1062-1066 1424-1436
HDPE HMW 2-5 1215-1220 1215-1220 1215-1220 1215-1220 1215-1220 1069-1073 1467-1473
HDPE HMW 5-10 1210-1215 1210-1215 1210-1215 1210-1215 1210-1215 1065-1069 1460-1467

PP Homo Inj 1373-1378 1373-1378 1373-1378 1373-1378 1373-1378 1141-1145 1657-1663

PP Copol 1423-1428 1423-1428 1423-1428 1423-1428 1423-1428 1182-1186 1718-1724

GPPS 1495-1505 1495-1505 1495-1505 1495-1505 1495-1505 1236-1244 1804-1817

HIPS 1565-1575 1565-1575 1565-1575 1565-1575 1565-1575 1294-1302 1889-1901
EPS 1400-1410 1400-1410 1400-1410 1400-1410 1400-1410 1157-1166 1690-1702

ABS GP/Nat 1710-1720 — 1710-1720 1710-1720 1710-1720 1414-1422 2064-2076

ABS Ave color 2060-2070 — 2060-2070 2060-2070 2060-2070 1703-1711 2486-2498
ABS Auto black 1820-1830 — 1820-1830 1820-1830 1820-1830 1505-1513 —-

PET bottle grade 1420-1440# — 1390-1410 1420-1440 1425-1445 1380-1405

PET bottle grade — — — — — 1669-1700##
APET film grade 1390-1410#
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 950-960 775-795 — 710-740 1015-1025 —

LDPE G-P 1530-1540 1300-1305 1280-1285 1320-1330 1520-1530 —

LLDPE (Butene) —- 1245-1250 1225-1230 1300-1310 1440-1450 —

HDPE Inj 1290-1300 1070-1075 1050-1055 1110-1120 1280-1290 —

Bmldg 1320-1330 1080-1085 1060-1065 1110-1120 1280-1290 —
Film 1330-1340 1095-1100 1075-1080 1110-1120 1280-1290 —

PP Homo Inj 1335-1345 1290-1295 1260-1265 1325-1330 1380-1390 —

PP Raffia — — — — 1380-1390 —
PP Copol 1415-1425 1340-1345 1310-1315 1375-1380 1460-1470 —

PS G-P 1473-1483 1250-1260 — — 1500-1510 —

HIPS 1558-1568 1320-1330 — — 1585-1595 —
EPS 1538-1548 1305-1315 — — 1565-1575 —
ABS GP/Nat 1985-1995*** 1776-1785 — — —

PET bottle grade — 1170-1180 — — — 990-1000

PET bottle grade — — — — — 1198-1210#
Recycled PET — 900-910 — — — 790-800
Recycled PET — — — — — 956-968#
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.

Copyright © 2010, The McGraw Hill Companies 2

 PLATTS POLYMERSCAN JUNE 9, 2010

POLYMERS
Polyvinyl Chloride Global PP Prices

Europe 2700
Negotiations for NWE June PVC contract prices began in CFR FE Asia ($/mt)
earnest this week, with many sources reporting a tighter market FD NWE (€/mt)
2250 FAS Houston ($/mt)
in the region giving producers further hope that they can target
significant increases. One major producer reported that they
had continued to look for an increase of Eur60/mt ($72/mt) 1800
and said: “Demand is strong. I’m spending a lot of time trying
to find product for all our current orders. There is no spare
material because demand is so good. Production is flat out 1350
everywhere.” A second producer added: “We are holding out
for the Eur50/mt on a ‘take it or leave it’ basis and GBP40/mt
900
($58/mt) for the UK.” The producer continued to say: “I’m 12-Jan 04-Feb 03-Mar 26-Mar 21-Apr 14-May 09-Jun
very optimistic that we shall succeed in the UK specifically as
product is tight. Profile demand is good and better than May
so although it’s early days I am very optimistic.” A converter in Foreign exchange
the UK reported settling June at an increase of GBP25/mt and Eur1 to $ 1.2070 £1 to Eur 1.2097
although this was lower than the producers reported target, the
converter agreed that supply was tighter now. “There is a Polymer Spot Freight Rates ex-Middle East ($/mt)
perception now that material is tighter. All producers seem to
From: Middle East Middle East
have full order books and this is reflected in the increases for To: 25-100 mt >100mt
June so far.” The converter added that downstream demand East China 35-45 35-45
South China 40-45 40-45
was also on the up and said: “We are very busy at the moment, India 15-25 15-25
there is definitely some pick up, although it could be Southeast Asia 25-35 25-35
temporary.” A third producer was more conservative with his NW Europe 80-90 80-90
Turkey 90-100 90-100
estimation for June however. “In the North of Europe demand US Gulf 140-150 140-150
is definitely better and I think Eur30/mt is achievable, although Latin America 140-145 133-137
we are still in negotiations,” the producer said. The outlook for Notes: Please refer to the methodology guide for details on port locations.

Southern Europe—and Spain in particular—was less rosy

according to the source. “Spain is more or less like May. The Metals
market is quiet and flat, although not worse than it was. At this
Aluminum US Jun 08 cts/lb 90.437
moment we are targeting an increase of Eur20-30/mt in Spain. Tin US Jun 07 cts/lb 740
We started higher, but demand dictates lower. Realistically I Tin Europe Jun 04 $/mt 17918-17978
think we will have to focus around Eur20/mt,” the source said.
The spot market in NWE was less bullish than the contract side,
although there were some signs that things were improving. before $45/mt anti dumping and 6.5 percent duty. In
One trader and distributor selling into Germany said: “We have production news, a source at Spain’s Ercros said the company
managed to pass on some price increases, but there are a lot of was close to finishing upgrade work to increase production
people adopting a ‘wait and see’ position now. Some customers capacity at the Vila-Seca plant in Tarragona, Spain. The work
think there may be a fall coming in July and are concerned should be finished by the end of August when capacity will
about whether to buy now.” The trader added: “I would put net increase to 175,000 mt/year. The upgrade of the plant
prices at between Eur790-830/mt. Above Eur800/mt is involved the addition of a fourth reactor which will increase
definitely achievable with some customers and it does feel as production capacity by around 40,000 mt/year.
though the really low offers have now left the market.” Prices SUBSCRIBER NOTES

continued to fall in Turkey this week as demand tapered off
amid uncertain macro economic conditions. “The market is
becoming effected by the macro economy and politics. It is
effecting all plastics. We have seen buying stop as buyers are
afraid of another downturn if crude or ethylene drop again,”
one trader said. European origin product was still the most
competitively priced however at around $1,020/mt CFR for K-
67 grade and $1,040/mt CFR for K-58 and K-70 according to
the source. US product was priced between $930-950/mt CFR
Subscriber notes
SUBSCRIBER NOTE: Platts has introduced West Coast Latin
American polymer price assessments for LDPE, LLDPE, HDPE,
PP and PVC. The assessments will be basis CFR Peru with
credit of 90-150 days and reflecting parcel sizes between
100-300 mt. Please direct all feedback to Ihsan Rahim,
managing editor for Americas Petrochemicals at tel: +1-713
658 3206, or email: ihsan_rahim@platts.com, with a cc to
shahrin@platts.com and pricegroup@platts.com.

Copyright © 2010, The McGraw Hill Companies 3

 PLATTS POLYMERSCAN
United States
The US PVC price was talked in a wide range this week, with
some deals heard done below $800/mt. However, sources said
those deals were traders selling short and did not reflect the
actual value in the US. “From a producer’s perspective, you
don’t want to establish that position,” a source said. “But if
enough deals get done at that level, it could make this market.
From a feedstock perspective, the market is going that way. But
it’s not there yet.” One source said prices were falling, but were
yet to fall to $800/mt. “You have to look at the domestic price
and domestic demand,” a source said. “If the export price falls
below $800, the producers will just sell it all domestically if the
demand is there.” The source said the deals done below
$800/mt would require the price to fall to $740-750/mt in July.
But with domestic demand strong, he said he did not expect
producers to be willing to go that low. “No one is at $800/mt
yet,” he said. The US price this week was assessed at $815/mt
FAS Houston, down $40 from last week. The US delivered price
was assessed at 43 cents/lb, down 3 cents from last week.
Asia
The CFR China PVC price benchmark ticked down $4/mt on
the week to settle at a six-month low of $945/mt, as the
market continued to be hit by weak spot demand. End-users
and distributors in China remained on the sidelines,
expecting a further slide in offers for July-delivery business —
especially from the US. US PVC prices were in the mid-
$800s/mt FAS Houston late last week, which can be translated
to around $940/mt CFR China, including typical freight cost
of around $70-80/mt. However, Chinese buyers expect US
PVC prices to decline further to $900-910/mt CFR China, as
the US PVC market will likely be hit by falling ethylene
feedstock values there. “Lots of Chinese buyers flashing back
what happened in 2008,” a trader said. Many Chinese buyers
and traders lost a lot of money in late 2008, as the Asian PVC
market collapsed more than $700/mt within three months.
Elsewhere, prices basis CFR India dropped to $910-920/mt,
compared with $955/mt the previous week. Ex-Korean PVC
was offered at $920-930/mt CFR India this week, but end-
users were reluctant to accept the offers, keeping their bids at
$900-910/mt. On the other hand, some market sources said
the Asian PVC market was seeking bottom as supplies from
regional producers will likely turn tight due to possible run
cuts. For example, Taiwan’s Ocean Plastics plans to reduce
runs at its 150,000 mt/year PVC plant in Taoyuan to 80% in
July from 85% in June due to tight vinyl chloride monomer
feedstocks. South Korea’s LG Chem was also reported to be
considering run cuts at its PVC plants in Yeosu and Daesan
(total capacity 750,000 mt/year). In addition, carbide prices
are increasing in tandem with rising power costs, which will
likely push carbide-based PVC prices in the near future.
Latin America
PVC prices were reported falling in the West Coast Latin
American market. US was offering PVC to Peru last week at
$980/mt CFR. A buyer in Peru said they believe PVC offer
prices are going to be reduced by $50/mt or more. “We are
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
waiting for PVC offers this week and we heard in the market
prices should be down at least $50/mt,” said the source. A
US trader said he heard CFR Peru offers this week at
$940/mt. He said the domestic price, plus shipping and
profit, could land product in Peru at that level. The higher
prices, he said, were probably a result of traders or sellers
adding on additional costs or margins. Freight rates from the
US to Peru were near $100/mt.
Low Density Polyethylene
Europe
European spot values have increased to Eur1,300-1,305/mt
($1,572/mt) FD NWE, as offers continued to move up in a thin
market, sources said. Many traders reported lack of prompt
prime product, as allocations from producers remained thin.
Some spot offers were reported in a Eur1,320-1,370/mt FD
NWE range but this did not attract buyers, sources said. Some
sources felt that prices improved at a slower pace, as global
bearishness led to a more conservative volume approach.
Despite thin supply, spot buying interest appeared more
cautious this week, as converters addressed immediate shorts
directly with producers. Traders also refrained from building
stock, preferring to do back-to-back business only. “I am not
doing much business but I am not actively pursuing more,
everyone is jittery as China is sliding so people [traders] are
afraid of a snowball effect and hold of purchasing,” a trader
said. Producers however said the persistent slide in Asia would
have little effect as low European inventory level continued to
support prices. “LDPE is a never-ending story, the main issue
for us remains to keep our customers running as we have low
stocks,” a producer said. “We are completely sold out for June,
the market is short and tight and we have a very good order
book,” a second producer said. Converters, while confirming
thin allocations from producers, grew increasingly concerned
about this own demand. “Our volumes in shrink film [serving
the beverage industry] are slowing down for 10 days now as our
customers have inventories,” a converter said. “We are slowly
getting to a low season, though the season has started much
earlier this year and customers already built inventories so
maybe volume will pick up again in August,” he said. “We will
start decreasing our resin purchases in July.” Some other
converters agreed, also seeing a margin drop off in their
volumes. “Our lamination film volumes are stable, mainly due
to shortages of the PET films, which we blend with
polyethylene; PET film mainly go into more sophisticated high
tech applications now, so it is hard to secure volume for food
packaging,” a second converter said. “While food packaging
and labeling segments are stable, we see lower volumes in
surface protection and bubble wrap films, as our customers are
holding back now, it is all about the cost for them,” he added.
“Demand is not as terrific as it was but it is still at good levels,
it has eased a little,” a third converter said. Meanwhile in the
contract market gross values were mainly discussed at a Eur30-
40/mt increase versus May. Gross values reported by the
producers were at a Eur1,385-1,410/mt range, with some
4
 PLATTS POLYMERSCAN
producers looking at a bi-monthly result, combining
increases in May and June together. But other producers
focused their efforts on June as a stand alone month,
targeting a Eur50/mt increase. “Our gross values are above [a]
Eur1,400/mt level and we have increased prices by
Eur50/mt,” a producer said. Converters contacted this week
reported gross values at a Eur1,340-1,375/mt FD NWE level.
Gross values remained stable this week. Gross values in the
UK were assessed GBP10/mt ($14.57/mt) higher this week at
GBP1,180-1,185/mt FD UK. In production news, force
majeure at LyondellBasell’s Aubette, France plant remained in
place this week, a company source said.
United States
Low density prices fell as more material slowly made its way
to the export market. There was a deal talked at 65 cents/lb
FAS Houston, which several traders said they would have
jumped at had they been offered the resin. Other sources
said LDPE was still at and over 70 cents/lb in railcars
delivered to Houston. 70 cents/lb was too high for traders,
however, as there was less expensive LD available from other
producers outside the US. There continued to be talk of
European LDPE making its way to South America and there
was Iranian LDPE also on the market. In addition, Dow’s
Chile LDPE plant was expected back up by the end of June
after being idled after the massive earthquake struck
Concepcion, Chile in February. While it is only a relatively
small plant at 50 kt/year any additional production was
welcome to a region extremely tight on LDPE. In other plant
news, LyondellBasell was still on schedule to restart its 245
kt/year plant in Morris, Illinois by the end of June.
Asia
Low density polyethylene fell $5/mt on the week to end
$1,335/mt CFR Far East Asia, while Southeast Asia prices dipped
$10/mt to end at $1,410/mt CFR. Despite poor market
sentiment, LDPE was largely supported by tight supply in the
region. Middle Eastern producers such as Qapco were heard
offering at $1,370/mt CFR China, while a Southeast Asian
producer sold cargoes into China at $1,450/mt CFR China,
which is import tax exempt under a Free Trade Agreement.
However, buyers were tracking fluctuations in stock markets,
crude and ethylene prices. “They are still unwilling to buy in
large quantities. They’ll buy on a need-to basis,” a Malaysian
producer said of the Chinese market. Sellers were unwilling to
lower offers, arguing that supply is tight and they have better
sales prospects in other parts of Asia. Sinopec rolled over its ex-
works price from last week at Yuan 11,000/mt ($1,611/mt), but
changed it to a listed price, which means buyers will be
refunded the difference if the settled prices are lower. In SE
Asia, a Singapore-based trader offered LDPE at $1,420/mt CFR
SE Asia. In plant news, Thai PTTPE plans to start up its 300,000
mt/year LDPE plant next week after months of delays.
Latin America
June LDPE Brazilian offers to Mercosur (Argentina) were
heard at $2,030-2,080/mt CFR while to Paraguay and
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
Uruguay at $1,750-1,800/mt CFR. “LDPE continues (to be)
short in the market, and we should see availability
restrictions this month,” said a source at Braskem. A buyer
in Paraguay said they should buy LDPE from Brazil this
month. “We are worried with the drop in prices on LDPE at
this time, but we should nevertheless be purchasing it,” said
a buyer. Brazilian LDPE offers to Andean Countries and
Central America were reduced by $50/mt and they were
pegged at $1,630-1,700/mt CFR for film. European offer to
Peru was heard this week at $1,560/mt CFR. For the
Brazilian domestic market, Braskem had flat prices compared
to May at Reals 4,250/mt CIF for LDPE film. Korean material
was meanwhile reported offers at $1495/mt CFR Peru.
Linear Low Density Polyethylene
Europe
European spot values remained at Eur1,245-1,250/mt FD NWE
($1,506/mt) Wednesday, despite attempts to offer higher,
trading sources said. Buyers and sellers appeared far apart this
week. Trading sources stressed that prompt availability
remained constrained as European producers lacked sufficient
inventory, while imported volumes remained marginal and
were not overwhelming the market. “The imports are so small
they are not even causing a ripple in the market,” a producer
said. Despite firm prompt availability, converters refrained from
chasing spot offers at traders. This reluctance to commit from
converters led to some downward correction at the higher end
of the spot offers, market sources said. “I could sell higher last
week but some buyers do not want to pay higher than [a]
Eur,1230/mt FD NWE level this week,” a trader said. “I think
June spot volumes are covered that is why it is harder to book
buyers now,” a second trader said. In the Asian market,
meanwhile, prices continued to fall with Far East Asian prices
ending at $1,170/mt CFR Wednesday. Despite prominent
bearishness in Asia, European LLDPE producers stressed that
relentless European demand, thin inventories and lack of
market moving imported volumes sustained firm
fundamentals. “In Asia the falls are sentiment driven, they have
reacted to lower crude and some traders got rid of stock, the
direct customers in Asia are still buying, I think that the
[currently] depressed Asia is a short-term phenomenon,” a
producer said. “Asia is just a side show and the problems there
will get resolved and it’s weak sentiment is not affecting
Europe.” European converters said that they had no issues to
secure C6 grades but struggled with C4 allocations from one
major supplier. “One supplier has reduced volume allocations
in June as they have very thin stock, which they have not been
able to rebuild yet,” a converter said. “It is not a problem to get
volume from the rest.” Converters started to mention some
offers for July volume from the Middle East but this was not
corroborated by the rest of the market at the time of press.
“LLDPE will be more under pressure and the gap with LDPE
will grow further as we are getting more offers from traders for
Middle East product,” a converter said. “No one will buy more
than needed in Europe now, Turkey is down, Asia is down,” a
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second converter said. Producers reported strong volumes in
June from most segments. Converters reported a marginal
downturn in end-user demand in some specific sectors.
“Volumes in pallet wrapping segment are stable, only
marginally down, but stretch film for beverage industry is more
down, and I am not sure why,” a converter said. Producers said
while there was some caution about July, plant maintenance in
August would prevent a physical volume overhang in Europe,
even if demand retreated. In the contract market values were
reported at a Eur1,360/mt FD NWE level by the producers,
while converters reported accepting Eur1,330-1,340/mt FD
NWE. Gross values in the UK strengthened marginally this
week to GBP1,130-1,135/mt FD UK. Ineos’ plant at
Grangemouth was set to start up Friday from a brief shutdown.
The plant went down over the weekend due to a technical
glitch, a company source said. The plant was also set for
scheduled maintenance of five weeks, starting in August.
United States
Persistently weak export demand pulled down LLDPE prices
again out of the US. There was a bifurcated export market
with deepsea prices talked at 47-48 cents/lb in railcars,
against traders working the Latin American market with
values closer to 50 cents/lb in railcars. Even at 50 cents/lb
for Latin America, there was little demand. Some converters
were only interested in securing a container, about 18mt, as
they did not want to build inventory while the market was
falling. A producer said June would be a month of flux
where buyers did not want to buy much and producers did
not have much pressure to sell. Liquidity was expected to be
poor until there was more clarity on when the bottom of
the market will be reached. Traders looked at integrated
producers’ cost of ethylene from ethane still at around 23-24
cents/lb and believed this gave makers plenty of room to
decrease prices instead of reducing operating rates. “Why
can’t they afford to sell at 45 cents/lb?,” a trader asked. But
producers were content to build inventory and work to sell
more into the domestic market than reduce export offers.
Even if domestic prices fall 8 cents/lb as some participants
expected, producers would be better off selling domestically
in the high 50’s cents/lb than dropping export prices.
Asia
The Asian linear low density polyethylene market pointed
downward this week as Far East Asia saw prices ending at
$1,170/mt Wednesday, down $20/mt on the week, while
Southeast Asian prices ended at $1,190/mt, dropping $35/mt
on the week. South Asian prices fell $30/mt to $1,300/mt,
tracking the steep fall in Far East Asia prices last week. The
LLDPE market is weighed down by a seasonal lull period.
Buyers were also anxious about the European debt problems
and falling crude oil prices Monday. Buying sentiment was
crushed Monday as LLDPE September futures on the Dalian
Commodity Exchange dropped Yuan 495/mt ($72/mt) on
the day to Yuan 9,415/mt, triggering a trading halt following
DCE’s 5% gain/loss limit. In response, several Chinese
traders lowered offers to the Yuan 9,000/mt level ($1,058/mt
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
on import-parity basis) compared with last week’s average
price of Yuan 10,000/mt. Sinopec rolled over its ex-works
listed price from last week at Yuan 10,200/mt, where buyers
are refunded the difference if settled prices are lower. The
arbitrage opportunity has been open between Far East Asia
and South Asia since last week. This has prompted sellers to
move LLDPE cargoes to India, fetching as much as
$1,300/mt CFR India. Based on an average $75/mt freight
from China to India, NE Asian sellers have a healthy margin.
In plant news, PTT shut its LLDPE plant June 5 to divert
ethylene in an attempt to start up its new LDPE plant.
Latin America
Brazilian LLDPE offers to Paraguay dropped $130/mt related to
May, said a resin distributor. After the price reduction, LLDPE
Brazilian offers in Paraguay were at $1,620/mt CIF. A
Paraguayan buyer said today they don’t see the necessity to buy
LLDPE this month since the Asian product they recently
purchased should be arriving soon. LLDPE Brazilian offers to
Andean Countries and Central America went down in June
$50/mt, said a source at Braskem. Resin offers from Brazil after
the price reduction were heard at $1,430-1,490/mt CFR for
butene and at $1,480-1,540/mt for hexene. US LLDPE film offer
to Peru was heard at $1,380/mt CFR. For the Brazilian domestic
market, June LLDPE offers were at the same May levels due to
the fact that demand was still very healthy in the Brazilian
domestic market and raw material prices just went down in the
US and not in Europe. Brazilian ethylene contract prices
typically follow the European contract prices movements with
a month lag. Braskem’s LLDPE offers in the Brazilian domestic
market were pegged at Reals 4,200/mt CIF for butene and
hexene. Mexican LLDPE offers dropped 4% compared to May
because of lower international prices and slow demand, a
source at state-owned Pemex said. “We saw some recovery
during May, and we managed to close the month at 5% better
than in April. However, even though this was the case, demand
for PE in Mexico is still quite low,” said the company source.
LLDPE, after the drop was being offered in Mexico at 57-59
cents/lb FOB Mexico City.
High-Density Polyethylene
Europe
European contract values in injection grade have
strengthened this week on the back of confirmed June
business to Eur1,210-1,220/mt ($1,466/mt) FD NWE. The
increase in contract values mirrored the increase in
feedstock ethylene for June, market sources said. Some
producers reported achieving an increase of Eur20/mt in
June, with gross values at Eur1,220-1,230/mt FD NWE mark
but this was not confirmed by converters at the time of
press. Converters stressed that it was not an issue to source
injection grade, as imported alternatives started to appear in
the market. But spot values in injection grade remained
stable this week at a Eur1,070-1,075/mt FD NWE. Some
sources said that the market was poised to soften as presence
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of imports, mainly from Egypt, made buyers more reluctant
to commit to current offers. Other sources disagreed, seeing
currency still as a barrier to making the imported volume
attractive. In blowmolding grade, producers contacted this
week continued to report increases of Eur10-20/mt versus
May, commenting on healthy demand and tighter
availability. Previous ethylene shortages left the inventory
levels thinner, producers said. European spot ethylene values
were assessed lower since the end of last week at Eur915/mt
FD NWE, with recent urgency to secure prompt volumes no
longer evident in the market as availability has improved,
market sources said. Cracker reliability issues in the region
have mostly been resolved and with that the need to cover
prompt shorts has diminished, the sources said. Some selling
interest for June ethylene molecules was present in the market
but it has, so far, failed to attract incremental buyers. While
ethylene availability has improved, this was yet to be evident
in all geographies, a producer said, still reporting issues to
source ethylene for some of its HDPE assets this week.
Blowmolding buyers expressed mixed views on availability.
Some converters reported struggling to secure additional
volume above agreed monthly allocations. Other converters
reported seeing a balanced market, with no pressing
availability issues. Converters said that they hoped to reach a
rollover, but were currently discussing a Eur10/mt increase.
Gross values were assessed marginally higher this week at
Eur1,195-1,200/mt FD NWE, subject to change on further
acceptance of increases from converters. Spot values in
blowmolding grade, however, remained stable this week. Film
grade had different dynamics this week. Uni-modal film was
seen balanced, while bi-modal film was tighter, sources said,
commenting on a widening gap between the two grades.
Producers reported achieving a Eur10-30/mt increase in June
values but feedback from converters was not yet conclusive.
Gross values in film grade remained stable as did spot prices.
In the UK market, gross prices remained stable this week,
market sources said.
United States
Export prices fell across the board as demand weakened.
Traders said it was hard to move any material at any price as
buyers expectations were for lower prices ahead. Blow
molding was talked in a wide range. For traders looking at
deepsea markets, buy ideas were under 45 cents/lb delivered
to Houston in railcars. For Latin America, buy ideas were at
50 cents/lb in railcars, but for small quantities of a container
or two. “Whatever offer I make, a buyer will ask for a lower
price,” a trader said. Producers, however, were in no rush to
open up spot offers to the market as they were either able to
move large quantities quietly within their own system
overseas or they were building inventory and content to sell
at higher prices into the domestic market. The HDPE film
market was also a mixed bag with traders saying converter
bids in Brazil were all over the place. “There’s one bid at
$1,200/mt and another at $1,400/mt (CFR),” a trader
commented. In this situation several traders said they
preferred to be on the sidelines and simply sell off their
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
inventory. Until prices reach a bottom, deals were likely to
be few, as neither traders nor converters want to take a risk.
Producers, also do not want to chase the market lower as it
hurts sentiment in the domestic market. Barring a hurricane
in the USG or widespread plant outages in the US,
participants expected June domestic prices to decrease. One
supplier expected June contracts to fall 8 cents/lb.
Asia
YARN: Yarn grade fell $10/mt on the week to end at
$1,215/mt CFR Far East Asia and CFR Southeast Asia rolled
over from last week as supply remains relatively tight. A
Chinese trader reported selling a small ex-warehouse parcel
Tuesday at Yuan 10,300/mt ($1,210/mt import-parity basis),
down Yuan 100/mt on the week. China’s Sinopec lowered its
ex-works price by Yuan 200 to Yuan 10,400/mt. INJ/BLMDG:
Wednesday, injection grade was down $45/mt to $1,125/mt
CFR FE Asia, down $50/mt to $1,115 CFR SE Asia and down
$35/mt to $1,165/mt CFR South Asia. Blow molding grade fell
$50/mt to $1,140/mt CFR FE Asia, dropping $30/mt to
$1,150/mt CFR SE Asia and falling $15/mt to $1,175/mt CFR
South Asia. The drops were on poor buying sentiment and
high availability of both grades in the domestic Chinese
market and buyers were following the Far East Asian market
closely. In the Chinese domestic market, Sinopec offered ex-
works injection grade cargoes at Yuan 9,700/mt, up Yuan
900/mt on the week and rolled over its blow-molding price at
Yuan 9,400/mt. Chinese traders lowered blow-molding grade
offers by about Yuan 450/mt to Yuan 8,800/mt ($1,034/mt
import-parity basis) and several traders have reported selling
out injection grade. Blow molding grade was cheaper than
injection grade in China, while it was the opposite in
Southeast Asia, reflecting the smaller dip for CFR SE Asia
blow-molding grade. FILM: Film-grade fell again as market
participants looked to the Chinese market for cues. CFR FE
Asia prices fell $15/mt on the week to $1,125/mt, while CFR
SE Asia dipped $55/mt to $1,140/mt and CFR South Asia was
down $25/mt to $1,215/mt. On top of market anxiety over
fluctuating crude, falling ethylene spot prices and uncertain
stock markets, the Chinese market has high inventories of
Iranian-origin film. The most common 7000F-grade was heard
being offered below $1,100/mt CFR China, but was not taken
into assessment due to its embargoed nature and
specifications. 7000F film has a melt flow index of
0.04g/10min, below Platts methodology specifications of 0.07-
0.18g/10min. Reflecting the uncertain market, Sinopec
switched its ex-works price of Yuan 9,600/mt ($1,406/mt) into
a listed price system that refunds buyers the difference if the
settled prices is lower. As a result of competitive prices, several
Asian producers have given the China market a miss for June
allocations. Middle East cargoes were heard offered at below
$1,140/mt CFR China, while cargoes to South Asia were
offered about $1,200/mt CFR (L/C 60 days).
Latin America
A Brazilian resin distributor in Paraguay was offering HDPE
in June at $1,620/mt CIF for film and at $1,650/mt CIF for
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blowmolding and injection. According to the seller, the
Brazilian HDPE offers went down $130/mt related to May. A
Paraguayan buyer said they should not buy HDPE this month
due to the fact that they were receiving the Asian product
they bought last month. “We are worried with the constant
drop in prices this month, and we will only buy the absolute
minimum, possibly only LDPE,” said the buyer. The Brazilian
HDPE producer Braskem reduced offer prices to the Andean
Pact and Central America by $50/mt. After the price
reduction, Brazilian offers were at $1,430-1,490/mt CFR for
film, injection and blowmolding. HDPE US offer to Peru was
heard this week at $1,380/mt CFR for film. Elsewhere on the
West Coast, June deal prices between US and Colombia were
pegged at $1,437/mt CFR for film and at $1,440/mt CFR for
blowmolding. On the production side, Dow’s three
polyethylene plants in Argentina were reported working at
90% of capacity. The plants have a combined capacity of
480,000 mt/year of LLDPE, and 300,000 my/year of HDPE.
According to the source, the two HDPE and the LLDPE plants
in Bahia Blanca, Argentina should be working at full capacity
in 20 days. Dow’s cracker and polyethylene plants went on
emergency shutdown due to technical problems in April, and
they went back on line the first week of May.
Polypropylene
Europe
The assessment for June monthly Northwest European
polypropylene contract prices was talked higher again this week
although most producers eased on the Eur50/mt price hike
target they were aiming for at the start of the month. “Plus
Eur50/mt is a hard target to reach. I think plus Eur30/mt is a
more accurate picture. I’ve done most contracts at that level,” a
European producer said. Several converters said they are now in
a better position to resist any steep price increases amid easing
supply constraints. With feedstock and Asian PP prices falling,
buyers said they are more convinced that a plus Eur50/mt rise
is no longer justified. “Markets are shifting to our favor,” a
European converter said. “I won’t accept anything more than
plus Eur20/mt.” Several other converters said they will insist on
a price rise of Eur25-30/mt for their June contracts. “I’ll
probably accept plus Eur30/mt. I’m not going to lose on this
one,” said a UK buyer. Demand remains firm, with one major
producer citing a “shoot up” in orders from the caps and
closures sector. June is shaping up to be the “best month” so far
this year, the producer said, adding that the bulk of his
contracts were concluded within the plus Eur30-40/mt range
with “nothing below that.” Market sources said supply seems to
be in balance with demand at the moment as production units
previously offline come on stream. “The critical point of supply
availability is over. There’s no panic anymore,” said a trader. He
added falling Asian prices are also giving consumers the option
to buy cheaper materials from overseas. European producers
said their capacities are fully committed to their customers and
not offering spot materials. In the spot market, offers and
reported deals were within a range of Eur1,280-1,310 FD NWE
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
for homo injection grade. “Supply is enough but you have to
pay for it,” said a trader. In Turkey, open market spot prices
remain weak, tracking the steady decline in feedstock values.
Offers and indicated traded levels were reported between
$1,320-1,350/mt CFR Istanbul plus 3% duty “with most deals
done at the lower end of the range,” said one trader, adding he
expected prices to be on a gradual decline until next week. On
the production side, Sabic has delayed the lifting of a force
majeure on PP supplies from its Geleen production unit in the
Netherlands, a source confirmed, adding the 550,000 mt/year
unit is running at full capacity. LyondellBasell has resumed
operations and deliveries from its 400,000 mt/year Plock PP
production unit joint venture in Poland, but has maintained
the force majeure imposed on PP supplies, a company source
said last week.
United States
Domestic PP prices moved lower this week, tracing the
monomer contract that shed 8 cents/lb in June. US June
propylene contracts initially settled 8 cents/lb lower last
week, bringing polymer-grade propylene contracts to 55.50
cents/lb and June chemical-grade propylene to 54 cents/lb,
sources told Platts. Following the decrease, participants
pegged domestic homo-injection prices at 65 cents/lb
delivered while co-polymer was at 67 cents/lb delivered.
Random copolymer was talked higher at near 70 cents/lb
delivered this week. Sources characterized domestic demand
as healthy this week. Many participants had run through
inventories and were looking to rebuild. “Orders are picking
up in all segments,” said one seller. Meanwhile export values
were mostly stable this week as sources suggested the market
was still catching up after sellers dropped prices ahead of the
fall in the US monomer contract. Prices were still workable
into some parts of Latin America but US prices were still too
high to work to other regions. The homo injection price was
assessed this week at $1,234-1256/mt FAS Houston while
copolymer was at $1,300-1,322/mt FAS Houston.
Asia
Prices slipped $20/mt in China/Northeast Asia from a week
ago, dipping $10/mt in Southeast Asia and $5/mt in the
Indian subcontinent. Except for India where trading
volumes have been relatively stable, demand continued to
suffer in China and Southeast Asia as converters and traders
de-stocked amid worries about the fragile state of the global
financial markets and economies. Global headlines featuring
the term “double-dip recession” put market participants in a
state of unease, also shaking up global consumer confidence.
Market participants were also expecting a boost in China’s
PP production within weeks when the state-owned Sinopec
brings online a new PP plant in Zhenhai in Zhejiang
province. Built by subsidiary Sinopec Zhenhai Refining &
Chemical Co., the unit will be able to turn out 300,000
mt/year of the plastic resin. Borouge’s 800,000 mt/year PP
plant in Ruwais, Abu Dhabi, is expected to begin test runs
between July and August. Borouge plans to sell about 40% of
the plant’s output to Asia. On Wednesday, raffia offers at
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 PLATTS POLYMERSCAN
$1,220-1,230/mt CFR China had become commonplace and
attracted no buyers. Buying interest dropped to $1,070-
1,080/mt at best. Southeast Asia’s raffia market centered
around $1,230/mt CFR. India’s prices were supported by
demand for raffia bags for wheat crops, sparked by a shortage
of jute and jute bags. IPP and BOPP commanded a $55/mt
premium over raffia in China, with the premiums slightly
lower at $45/mt in SE Asia and the Indian subcontinent.
Block copol fetched a $140/mt premium over raffia in China,
with premiums seen at $130/mt and $125/mt in SE Asia and
the Indian subcontinent, respectively. Propylene closed
Wednesday at $1,065/mt FOB Korea and $1,100/mt CFR
China, down $20/mt over the past week. Raffia PP margins
were negative by $50/mt Wednesday, based on a monomer-
to-polymer conversion cost of $150/mt. To break even, a PP
producer in Asia would have needed to price its raffia cargoes
at at least $1,250/mt CFR China, or $150/mt above the price
of propylene on a CFR China basis.
Latin America
Some buyers in Paraguay said they were waiting this week
for the Brazilian offers for June purchase. The Brazilian
polypropylene producer Braskem said resin offer prices for
June to Mercosur went down $100/mt. Following the offer
price reduction, PP offers from Brazil to Argentina were
heard at $1,800-1,900/mt CFR homo raffia, injection and
film, $1,900-2,000/mt CFR for co-polymer impact and at
$1,970-2,070/mt CFR for random. June Brazilian PP offers to
Uruguay, Paraguay and Bolivia were heard at $1,700-
1,800/mt CFR for homo raffia, injection and film and at
$1,800-1,900/mt CFR for random. For the Brazilian domestic
market, Braskem announced flat polypropylene offers in
June related to May, and they were heard at Reals 4,200/mt
CIF for homo raffia, Reals 4,400/mt CIF for homo film and
injection and at Reals 4,500/mt CIF for co-polymer. June
Brazilian offers to Peru dropped $100/mt, said a source at
Braskem this week. After the offer price reduction, Brazil was
offering PP in Peru at $1,430-1,500/mt CFR for homo film,
injection and raffia, $1,480-1,550/mt CFR for co-polymer
impact and at $1,530-1,600/mt CFR for random. A buyer in
Peru said Colombia started the month with similar offers at
$1,510/mt CFR for homo, $1,640/mt for co-polymer and at
$1,580/mt CFR for co-polymer impact. In Peru the sellers
said demand is very slow at the moment due to the fact that
the buyers should be waiting for another drop in prices.US
imports to Peru were heard at $1,430-1,440/mt CFR.
Polystyrene
Europe
Following the settlement of the NWE styrene barge contract at
a decline of Eur73/mt ($87/mt) from May, producers were
mixed in their responses. BASF was the only one to officially
announce its pricing intentions this month, signaling that it
would lower its June-delivered general purpose polystyrene
price by Eur35/mt. Other producers, however, said they did not
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
share this view of the market, which continued to be
fundamentally tight and had emerged from planned and
unplanned shutdowns during May. While nearly all plants
were reported to be producing at the highest possible rates,
Dow was not available to confirm if its Schkopau, Germany site
had returned to production after a maintenance outage which
was due to conclude Tuesday. Despite the higher production
rates, producers said they still expected to be sold out around
mid-month. This was due principally to the lack of imported
material in the continental market but also because June is
effectively the peak month for polystyrene demand in the
European calendar. Orders for extruded polystyrene, used for
insulation in the construction industry, were particularly
strong, several sources noted with demand even in southern
and eastern Europe showing an improvement. The same was
true of expanded polystyrene, sources said. With the weak euro
continuing to fend off imports from Asia, producers were facing
overwhelming demand and thus able to negotiate for
continuing higher prices. Under recent European Union
directives, newly built houses must have ever-increasing
amounts of insulation. With only about 10% of the continent’s
housing stock already insulated, sellers of both XPS and EPS
expect demand to continue organically in both the short and
long term. While one producer reported settling some business
at a decrease of Eur35/mt compared to last month, others said
they saw the likely outcome of monthly negotiations at
between minus Eur30/mt an Eur40/mt. However, other
producers said they would try to maintain prices as close to a
rollover price as possible. “Our customers don’t want a decrease
yet, because they are still passing on increases to their
customers,” one said. Another said customers were already
taking material at a rollover price and saw no need to go down.
However, buyers saw the price proposal as a signal to negotiate
lower prices. While none were aiming for the full Eur73/mt,
one converter said it would hold out for a Eur50/mt fall, adding
raw material fluctuations had distorted the true market value. A
second said he expected to end with a decrease of Eur40/mt.
Considering the information received, the FD NWE market was
assessed down a further Eur10/mt, making a total decline of
Eur25/mt from May. In the spot market, traders reported some
“aggressive sellers” offering European-produced material as low
as Eur1,200/mt FD Med. At the same time, Asian material was
reported landing in Turkey as cheap as $1,300/mt excluding
6.5% duty. Considering the fall in SM spot prices and this
information, the spot market was assessed Eur30/mt lower,
pending more confirmations. EPS market sources, meanwhile,
said they had been able to hold on to a rollover or a “strong
rollover” in some cases, which translated into a Eur10-20/mt
increase. Outright prices were reported in line with last week’s
assessment, which remained unchanged.
United States
The US polystyrene price was assessed lower again this week
as feedstock styrene prices continue to fall. “We’ve seen a
reduction [in prices],” one source said. “More in crystal than
HIPS. The prices have fallen 5 to 6 cents for crystal, but
maybe 3 cents for HIPS.” High butadiene prices continued to
9
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support a larger than normal high-impact premium over
general purpose, sources said. “The delta is up to about 7
cents,” a source said. The general purpose price this week
was assessed at $1,450/mt, down $180 from last week. The
high-impact price was assessed at $1,605/mt FOB USG,
down $135 from last week. The delivered price for general
purpose material fell to 67 cents/lb, while the high-impact
price was at 74 cents/lb. The primary cause of the price cut
was falling styrene prices. The US styrene price was assessed
this week just above 50 cents/lb, down more than 10 cents
from a month ago. Sources said there was a chance the price
could fall even further, if demand from Europe is unable to
sustain a potential arbitrage opportunity from the US.
Asia
GPPS: Asian prices have come under renewed downward
pressure on delayed re-stocking by traders and end-users as an
uncertain outlook over the global economic recovery
shadowed market sentiment. Asian prices ended lower, losing
$10/mt to rest at $1,195/mt in line with weaker feedstock
styrene prices, which softened by $14.70/mt after averaging
$1,069.70/mt CFR China over June 3-9 versus $1,084.40/mt
the week earlier. Buyers were maintaining a wait-and-see
attitude in anticipation of prices trending down over June and
July. Kumho and Hong Kong-based traders were maintaining
offers at $1,280/mt CFR China/Hong Kong (including the
$12/mt terminal-handling charge), although buyers were not
keen on spot cargoes. Converters have started cutting
purchasing volumes in anticipation of reduced export orders,
and end-users are limiting their requirements to contract
cargoes, as the total demand for their products is slowing. In
Southeast Asia, Denka was offering H2 June-delivery cargoes at
$1,300/mt, although no bids or buying interest were reported
for the spot cargoes. In the domestic Chinese market, 30-50 mt
parcels were traded between Yuan 9,800-10,000/mt ($1,152-
1,175/mt import-parity basis) over the week. Run rates by
Asian producers continue to be maintained at 70-80% of
capacity, although rate cuts are anticipated if demand does not
improve by the end of June. HIPS: Prices in both Northeast
and Southeast Asia fell by $5/mt to settle at $1,320/mt
Wednesday. Buying interest for HIPS continued to be dismal
even as lower offers of $1,388/mt CFR China/Hong Kong
(excluding the $12/mt THC) were unsuccessful in attracting
firm bids or buying indications. Following the recent upheaval
resulting from the eurodebt crisis, concerns abound on news
that China’s economic growth may slip to between 10-11% in
the second quarter as industrial production and investment
expanded at a slower-than-expected pace. As converters have
started cutting buying volumes in anticipation of reduced
orders, and with HIPS being offering in the domestic Chinese
market at Yuan 11,200-11,300/mt ($1,316-1,328/mt import-
parity basis), end-users were heard preferring to buy smaller
30-50 mt cargoes on a hand-to-mouth basis. Traders,
meanwhile, have abstained from further restocking of cargoes
at current offer prices as it is not commercially viable to
purchase higher price CFR China cargoes and resell them
based on current domestic prices.
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
Acrylonitrile Butadiene Styrene
Europe
Acrylonitrile-butadiene-styrene market sources in Europe said
they continued to see prices flat in June compared to May as
falling styrene and acrylonitrile prices were offset by a forecast
increase for third quarter butadiene. At the same time, the
continued absence of imported material from Asia meant that
there was no pressure for producers to lose margin and reduce
prices. “There is so little material available that producers can
keep their prices,” one buyer said, adding that he had been
buying at a rollover from May. One producer echoed the
sentiment saying that customers who had pushed for a
reduction had done so with little conviction. Looking into the
third quarter, despite last week’s fall in the butadiene spot price
as units returned from outages, sources said they would expect
a third quarter settlement between Eur1,400-Eur1,450/mt FD
NWE ($1,680-$1,740/mt) compared to the second quarter
figure of Eur1,275/mt FD NWE. At the same time, one source
said he forecast styrene monomer would rebound next month.
Finally, acrylonitrile was expected to fall further in the coming
weeks, sources said, while the European price was still about
$85/mt cheaper than the comparative Far East price. However,
ABS pricing in Asia was seen moving lower this week, and the
assessed mid-point of $1,880/mt CFR China was close to a level
where imports would be viable, one source said, calculating the
equivalent FD NWE price at around Eur1,750/mt. “It could
arrive competitively but there is no margin for the exporter,”
he said. The risk factor would be heightened by continued
volatility in the euro exchange rate. In fact, Asian exports were
still far more likely to end up in the US, or other dollar-
denominated markets before Europe, he added. With market
players seeing the contract price at a rollover, the assessment
was unchanged this week. The spot market was assessed down,
however, pulled by the lower Asian assessments.
United States
The US ABS price fell slightly this week as two of the three
major feedstocks fell. But the price remained well above
$1/lb as butadiene remained tight. The ABS price was
assessed at 113 cents/lb this week, down 3 cents from last
week. The US styrene price fell into the mid-50s cents/lb,
softened by a drop in benzene and ethylene spot values. The
styrene price has fallen more than 10 cents during the past
month. There also was some slight softening in the ACN
price, though ACN supplies were expected to remain tight
through the end of July and perhaps into August. ABS was
able to get ample support from butadiene. A shortage of
crude C4, as well as the inability to unload some imported
butadiene, kept butadiene supplies tight, sources said.
Asia
Asia’s acrylonitrile-butadiene-styrene prices have come under
renewed downward pressure on delayed re-stocking by traders
and end-users as the uncertain outlook over the global
economic recovery shadows market sentiment. Both CFR
China and CFR Southeast Asia prices headed south, losing
10
 PLATTS POLYMERSCAN
$15/mt on the week to rest at $1,880/mt on weaker feedstock
prices. According to a South Korean producer, sales volumes in
June slipped by as much as 30% from levels in May, as
converters have started cutting purchasing volumes in
anticipation of reduced export orders. Meanwhile, with ABS in
the domestic Chinese market being offered at Yuan 15,600-
15,800/mt ($1,833-1,856/mt import-parity basis), end-users
were heard buying 50-100 mt cargoes on a hand-to-mouth
basis. Market participants continued to remain on the sidelines,
in anticipation of prices trending down over June and July.
Offers from producers and traders were heard at $1,938/mt CFR
China/Hong Kong (excluding the $12/mt terminal-handling
charge), but buyers were not heard to be interested in stepping
into the market. A Korean producer said that under the
circumstances it remained unviable for resellers to purchase
CFR China cargoes and resell them under current domestic
prices. End-users are limiting their requirements to contractual
volumes, with very limited interest seen for spot cargoes, as the
total demand for their products is slowing. Market participants
pointed to the volatile feedstock markets. Main feedstock
styrene, which makes up 60% of ABS costs, continued to soften
by $14.70/mt after averaging $1,069.70/mt CFR China over
June 3-9 versus $1,084.40/mt the week earlier. Acrylonitrile,
which makes up 25% of ABS costs, fell by $25/mt at $2,425/mt
CFR Far East Asia on June 8. Butadiene, which constitutes 15%
of ABS costs, fell $31 to $2,049/mt CFR China on June 4.
Taking a weighted average of all three key feedstocks, and
factoring in a minimum conversion cost of $220/mt, the break-
even cost was calculated at $1,775/mt versus $1,795/mt last
week. While ABS was assessed $15/mt lower at $1,880/mt, the
margin widened by $5/mt to $105/mt this week.
Polyethylene Terephthalate
Europe
Demand for polyethylene terephthalate in the UK was holding
firm in contrast to the rest of Northwest Europe this week,
where less favourable spring weather conditions have seen
consumption fall short of expectations, sources said Tuesday.
“UK resin demand is holding up compared to other markets,
there has been better weather there. It’s worse in Germany and
Eastern Europe, even in Switzerland to a certain extent,” a
producer said. “There is a lot of stockpiling in Europe, people
are holding back at the moment. Benelux starts its summer
break in July, and with a bit more heat we could see demand
pick up for another month or so...we do expect margin
retention at the least.” A UK consumer agreed with the
sentiment, saying that market conditions had been quieter in
mainland Europe. He added that end-user demand in the UK
was now increasing as the weather improved, although up until
recently it had been “somewhat disappointing”. “We expect a
busy month ahead. The market has been variable on the quiet
side...the first sign of prices falling came from the mainland,
and people there are trying to be hopeful and prevent the same
from happening in the UK,” he said. “In April the juice market
was very quiet. Now it has picked up and we expect to be
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
above budget in June. I am hoping for a fall in the June PET
contract price.” UK spot prices were meanwhile said to be
around or just below GBP1,000/mt ($1,458/mt) FD UK, with
the May net contract price understood to have been settled at
the same level. This contrasted sharply to trader sentiment in
NWE, with one source saying they were expecting June to be “a
quiet month in general” as spot reports slipped below
Eur1,200/mt($1,445/mt) FD NWE to a range of Eur1,150-
1,180/mt. “Customers are on the sidelines analysing their stock
situation. Some feel the price will go down, others say it is just
a quiet period and that customers will soon return,” the trader
said. “Antidumping has not had an impact for the time
being...It has been a week of rumors. Customers are looking to
push down prices and demand is a little quiet at the moment.
We will have to wait and see what happens next month.” A
second trader agreed with the lower price indication, saying
that some Eastern European producers were “even looking at
Eur1,120-1,130/mt FD NWE.” “The range is difficult to define,
but I would say around Eur1,150-1,180/mt FD NWE...the gap
was quite big [between the contract and spot price] in May, but
now it is narrowing,” the source said. “Demand is not where it
should be. People expected the market to be short as a result of
antidumping, but it has been too cold so far [to encourage
demand]. There may be some impact in July and from the
World Cup, especially if we have temperatures like 30-35
degrees, as we did during the last one.” This suggested a third
consecutive week of falls from a May high of Eur1,260/mt FD
NWE, with a nine-day turnaround at Indorama’s PET plant
from Thursday unlikely to impact significantly on prices. A
source at La Seda de Barcelona said the second line at its El Prat
de Llobregat facility would start up Wednesday, with all plants
running at full capacity. Meanwhile, producers were expecting
June PET contracts to settle at a rollover to May, with the net
contract price reported around Eur1,170-1,230/mt FD NWE.
“Raw materials have settled down representing a drop-off of
about Eur30/mt in PET. Our aspirations were for a Eur20/mt
increase, but it’s now a difficult exercise to get any increase at
all,” a producer said. “We should be happy with a rollover
situation...we already achieved some increases before the raws
settled, so there is some arm-wrestling starting to happen.
Customers never expected month-on-month increases and now
they want something back.” He added sellers need to “step
cautiously, [the] tide could turn.” “Soft drink demand has
improved a little with [European] holidays, but supermarkets
are sitting on a lot of preform stock, and not turning over,” he
said. A second producer said the market was unlikely to see any
import material in the coming month but added the market
was tight with customers “trying to find alternative sources.”
“We will improve our margins [in June]. We are sold out in
most plants...the only one not yet sold out is Italy. It will be a
rollover for June, which will cover the margin increase,” he
said. In production news, Lotte Chemical UK declared force
majeure at its 500,000 mt/year Wilton PTA plant on June 3,
with the outage expected to last 7-10 days and result in a loss
of 15,000 mt of material, according to a company source. He
added that the outage was expected to impact on Europe, with
Lotte UK unable to offer its usual volumes for the spot market.
11
 PLATTS POLYMERSCAN
US
Domestic PET prices in the US were already down 2 cents/lb in
June from Eastman and Wellman announcements, but
participants believed contracts would be down more than that
given an estimated 4.8 cents/lb decrease in costs. June’s PX
contract had not yet settled but if the US follows Asia, the
contract would decrease 5.44 cents/lb. MEG contracts were
already concluded down 5 cents/lb in June. Producers were
fighting to gain margin in June by cutting resin prices less than
feedstock drops, but it was questionable whether this strategy
would work. Demand was said to be firm from bottlers
continuing to gear up for the summer beverage season. There
was also a reported uptick in beverage demand already from
the single serve market. Supply, however, was more than ample
despite the lack of spot imports. Imports were heard to be
supplanted by increased domestic production as AlphaPET
started up the second half of its 430 kt/year PET plant in
Decatur, Alabama, earlier in May. One importer believed the
AlphaPET’s plant would “effectively kill the import trade.”
Import offers were talked at 62 cents/lb DDP West Coast,
which, assuming the cargo arrives in June would be on par
with some medium sized domestic contracts. A more likely
scenario was that imports would not arrive until July and no
converter wanted to take a chance on imports so far out,
considering domestic prices could fall again next month. MEG
contracts already had pressure to fall following the $120/mt
decrease in Sabic’s Asia Contract Price nomination. “Converters
will say, come back to me in 5 weeks and ask me if I want to
buy at the price you are offering today,” a trader said. “No one
knows what the price (domestic) will be then,” the source
added,”and no imports can get done.”
Asia
Northeast Asian prices saw another week of decline on bearish
sentiments on crude oil price fluctuations and continued
concerns over the eurozone debt problem. Prices on a FOB
Northeast Asia basis fell $20/mt on the week to $1,180/mt,
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JUNE 9, 2010
while FOB Southeast Asia prices remained stable at $1,230/mt.
Demand for Southeast Asian parcels was stronger as South Asia
experiences an unusually hot summer. PET bottle chips were
strong in North Africa, where market sources say demand could
be pushed up by the hot season and the Fifa World Cup being
held in Africa next month. “Most producers in the region are
not in a hurry to sell now,” explained a Southeast Asian
producer. A deal was heard concluded at $1,230/mt FOB
Malaysia to the Middle East for a 200 mt cargo. Another
Southeast Asian producer even raised its offer price by $10/mt
on the week and managed to sell parcels to South Asia at
$1,240/mt FOB Thailand. Further east, PET bottle chip prices
could not hold as well as sellers had expected from last week.
This was due to depressed buying sentiment that carried over
from last week on weak crude prices late last week to early
week. Despite the seasonal demand period, buyers were also
tracking feedstock prices, which have been on a steady decline
in recent weeks. This is in line with the lull in the polyester
market that shares the same feedstocks as PET bottle chips.
Upstream, feedstock PTA was down $28/mt on the week to
$830/mt Wednesday and monoethylene glycol was at $708/mt,
down $30/mt. This forced producers to lower prices as they
hope to cash in before the peak season ends after June. Last
week, the European Commission announced prohibitive duties
on PET bottle chip imports from the United Arab Emirates,
Pakistan and Iran. Parcels from these countries are slapped with
countervailing duties of Eur42.34/mt, Eur83.64/mt and
Eur142.97/mt, respectively. UAE-origin cargoes attract an
additional antidumping duty of Eur54.80/mt, bringing total
duties to Eur97.14/mt. The tariffs were designed to prevent
sellers from these countries from underselling into the EU.
However, these duties did not excite Asian producers. “It would
have been helpful for us if it was introduced in April,” a South
Korean producer said. The euro slid further against the US
dollar this week, making arbitrage between Asia and Europe less
attractive. In Northwestern Europe, PET bottle grade was last
assessed at Eur1,225/mt FD NWE ($1,466/mt).
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12
 PLATTS POLYMERSCAN JUNE 9, 2010

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) 913-917 943.3-948.0 FOB USG A/F* 37.00-38.00
CIF NWE ($/mt) 1064-1068 1118.5-1127.0
CIF MED ($/mt) 1064-1068 – Fiber Grade Monthly Contract Price (Jun ): 40.00-41.00 FOB USG

Asia ($/mt)
Monthly Contract Price (—-): 970-970 FD NWE (Eur/mt)
Quarterly Contract Price (Q2): NA-NA FD NWE (Eur/mt) Spot Friday Weekly Average
CFR China 726-728 740.2-742.2
US (¢/lb) CFR Taiwan 726-728 –
Spot Friday Weekly Average CFR SE Asia 726-728 (1) –
FD USG 32.500-33.000 34.469-34.906
Average Monthly Contract Price (May) – CFR Asia:1050
Posted Contract Price (Jun ): NA-NA Delivered MEG CP Nomination (Jun) – CFR Asia: 960-970
Net Contract Price (Jun ): NA-NA Delivered (1) CFR SE Asia = CFR Indonesia.Note: *A/F denotes anti-freeze grade Asian ethylene glycol
assessments are basis L/C 90 days.
Asia ($/mt)
Spot Friday Weekly Average Polymer Feedstocks – Butadiene
FOB Korea 920-922 –
CFR SE Asia 900-902 957.4-959.4 Europe
CFR NE Asia 930-932 963.4-965.4 Spot Friday
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand. FD NWE (Eur/mt) 1670-1680
FOB Rdam ($/mt) 2048-2057
Polymer Feedstocks – Propylene
Quaterly Contract Price (Q2) 1275-1275 (Eur/mt)
Europe (Eur/mt) Ineos Olefins Monthly Contract Price Ex-Works:1400-1400 (Eur/mt)
Poly Grade Spot Friday Weekly Average US (¢/lb)
FD NWE 990-1000 997.5-1007.5
CIF NWE 950-960 968.8-978.8 Spot Friday
CIF USG 104.00-106.00
Chem Grade Spot Friday Weekly Average
FD NWE 990-1000 –
Monthly Contract Price (Jun ) 92-92
CIF NWE 900-910 –
Asia ($/mt)
Poly Grade Monthly Contract Price (JUN): 1000-1000
Spot Friday
Poly Grade Quarterly Contract Price (—-): NA-NA
FOB Korea 2038-2040
US (¢/lb) CFR Taiwan 2060-2062
CFR SE Asia 2048-2050 (1)
Spot Friday Weekly Average
FOB Japan 2038-2040
dlvd USG dlvd USG
CFR China 2048-2050
Ref Grade 37.875-38.125 37.875-38.125
Poly Grade 54.875-55.125 – (1) CFR SE Asia = CFR Indonesia. *A/F denotes anti-freeze grade.
Chem Grade 53.375-53.625 –

Poly Grade Contract Price (Jun ): 55.500-55.500 Delivered Platts Global Ethylene Prices ($/mt)
Chem Grade Contract Price (Jun ): 54.000-54.000 Delivered
Asia ($/mt) ($/mt)
2200
Spot Friday Weekly Average
FOB Korea 1109-1111 1079.0-1081.0 CFR NE Asia
CFR Taiwan 1144-1146 – CIF NWE Ethylene
CFR SE Asia 1124-1126 – 1825 Spot Ethylene FD USGC
FOB Japan 1109-1111 –
CFR China 1144-1146 –
1450
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand.

Polymer Feedstocks – Ethylene Glycol Assessments

1075
Europe
Spot Friday
FD NWE T2 (Eur/mt) 770-790 700
CIF NWE T2 ($/mt) 853-877 12-Jan 04-Feb 03-Mar 26-Mar 21-Apr 14-May 09-Jun

Monthly Contract Price (Jun ) – (Eur/mt) 820-820 Notes: All olefin prices reflect assessments at close of previous Friday.

Copyright © 2010, The McGraw Hill Companies 13

 PLATTS POLYMERSCAN
Ethylene
Europe
European spot ethylene values were assessed lower Friday at
Eur915/mt ($1,099/mt) FD NWE, with recent urgency to
secure prompt volumes no longer evident in the market as
availability has improved, market sources said. Cracker
reliability issues in the region have mostly been resolved and
with that the need to cover prompt shorts has diminished,
the sources said. There was modest incremental buying
interest in the market for June, although buyers appeared to
be hesitant to commit this week. Some selling interest for
June molecules was present in the market but it has, so far,
failed to attract incremental buyers. The market has been
severely backwardated of late, but with improved availability
some steam has begun to come off the prompt market,
flattening the backwardation. Spot values were heard at a
Eur900-930/mt FD NWE bid-offer range through Friday.
Ethylene producers said that, while availability has
improved, core contractual demand remains healthy,
supporting near maximum utilization rates at steam crackers.
“The demand is holding, we are running at maximum rates,
even though availability has improved,” an ethylene
producer said. “We are not in a hurry to sell at lower prices,
we are not pushing the volume out, we would still prefer to
adjust the output down by 1%,” a second ethylene seller
said. Ethylene buyers agreed that, while the market has not
tilted in balance as yet and is not overwhelmingly long,
availability has improved. With healthy contract and spot
cracker margins and a better-balanced market, a prompt
tonne commands less of a premium now. Platts spot cracker
margins were assessed at Eur164/mt Thursday, while contract
cracker margins for June have so far averaged Eur187/mt.
Ethylene buyers have also said there has been some selling
interest from the Middle East and Iran in the market for mid-
June loading. Coastal ethylene values have fallen
prominently as well Friday to $1,066/mt CIF NWE, impacted
by lower bids in Europe and weaker Asia. In Asia, ethylene
values continued to descend Friday. The prices basis CFR SEA
collapsed $114/mt on the week Friday to settle at $901/mt.
Market sentiment remained weak throughout the week amid
rising supplies from Middle East countries, such as Iran,
Qatar and the United Arab Emirates. In European production
news, Dow Europe’s steam cracker at Bohlen, Germany has
restarted after a maintenance outage, a company source said.
“The cracker has restarted mid-week. It is producing on-spec
ethylene. It is quickly ramping up,” he said. In upstream
news, the spot price of delivered North Sea propane cargoes
has started to approach parity with the delivered price of
naphtha, according to industry sources. According to sources,
the current strength of North Sea propane is due to a
combination of fairly tight availability, exports being moved
out of the area and healthy non-petchem buying interest.
Any surplus North Sea propane during the summer months
is traditionally used as an alternative to naphtha by
petrochemicals but at a price discount equivalent to
approximately 90% of the CIF naphtha price. The strength of
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
propane in early June pushed the price ratio quickly up to a
last published level of 97.4%.
United States
Spot ethylene values in the US continued to slide this week,
falling to an 8-month low according to Platts data on
improved supply. Early week activity was thin however
prices dropped Thursday as spot ethylene traded three times.
June was heard traded at 35 cents/lb MtB Wms and
consequently at 34.50 cents/lb MtB Wms. The market was
backwardated into July and late in the day, sources reported
a July deal at 32.875 cents/lb MtB Wms. Friday morning
June was seen bid at 31 cents/lb MtB Wms while July was
seen offered at 32.875 cents/lb MtB Wms against bids at
32.50 cents/lb MtB Wms. At market close Friday, two July
deals were heard at 32.50 cents/lb MtB Wms. Price erosion
was not confined strictly to the spot market though as May
US ethylene contracts settled 7.75 cents lower this week at
44.75 cents/lb. The April contract was at 52.50 cents/lb.
Despite the falling prices though, steam cracker operators
were still enjoying decent margins from ethane and E/P mix
at 9.35 and 12.88 cents/lb, respectively. In production, Dow
was expected to restart its 1.1 billion lbs/year LHC 2 steam
cracker at Plaquemine, Louisiana, in mid-June, sources said.
Latin America
June ethylene contracts for the Brazilian domestic market saw a
decrease of 8% to $1,215/mt FOB. In Reals, the CP in Brazil fell
5%. Usually, Brazilian ethylene contract follows the European
price movement with a month lag. In order to be more
competitive in the international market, polyethylene Brazilian
offers for the Mercosur (Paraguay and Uruguay) dropped $50 in
June, said a source at Braskem this week. June Brazilian PE
offers to Paraguay and Uruguay were heard this week at $1,700-
1,750/mt CFR butene, $1,710-1,760/mt CFR hexene, $1,750-
1,800/mt CFR for LDPE film and $1,700-1,750/mt CFR for
HDPE blowmolding, film and injection. LLDPE and HDPE
Brazilian offers to Chile went down $100-120/mt to $1,500-
1,550/mt CFR for butene, $1,550-1,600/mt CFR hexene and at
$1,500-1,550/mt CFR for HDPE film, injection and
blowmolding. For Argentina, PE Brazilian offers were at the
same levels compared to May. “We are going to try to work flat
prices in Argentina at the beginning of the month, but possibly
we are going to have to apply some offer price reduction as
well,” said the source. Brazilian offers to Argentina in June were
at $1,800-1,850/mt CFR butene, at $1,860-1,910/mt CFR
hexene, $2,030-2,080/mt CFR for LDPE film.
Asia
NEA: The CFR Northeast Asia ethylene price benchmark
dived $89/mt on the week to settle at $931/mt, as the
market continued to be hit by heavy supplies and weak spot
demand. Traders reduced offers gradually to $950/mt CFR
NEA later this week from $1,000/mt reported earlier this
week. A 3,000 mt deal was reported to have been done at
$930/mt CFR China for mid-July delivery. Due to the
persisting plunge in the Northeast Asia ethylene market on
14
 PLATTS POLYMERSCAN
stable naphtha feedstock prices, negative margins widened
further this week. Late Friday, negative NEA cracking margins
widened to minus $98.6/mt compared with minus $25.25/mt
Monday, which prompted speculations that naphtha-fed
steam cracker operators will start reducing operations. For
example, Taiwan’s Formosa is considering reducing steam
cracker operations amid negative margins. No steam cracker
operators have started reducing run rates, but the speculation
at least supported the NEA market just above $900/mt.
However, some market sources said NEA cracker operators
needed to keep running at 100% capacity in June as they
already purchased naphtha for the month. Meanwhile, the
prices basis FOB Korea slid $80/mt on the week in tandem
with a falling CFR NEA market. A bid was reported at $900/mt
FOB Taiwan, but the bid was rejected by producers. No deals
were reported on an FOB Korea basis this week. SEA: The
prices basis CFR SEA collapsed $114/mt on the week Friday to
settle at $901/mt. The market sentiment remained weak
throughout the week amid rising supplies from the Middle
East, such as Iran, Qatar and the United Arab Emirates. UAE’s
Borouge issued tenders to sell two spot cargoes this week. The
first 5,000 mt cargo is scheduled to be loaded in the middle of
June, while the second 5,000 mt is for the end of June. The
tender was canceled Friday due to a lack of participation,
which dampened the market sentiment further this week.
Early Friday, a 2,500-3,500 mt spot cargo was transacted at
$900/mt CFR Indonesia for any-July arrival.
Ethylene Glycol
Europe
The June NWE monoethylene glycol contract price was fully
settled at Eur820/mt ($994/mt) FD NWE this week, a decrease
of Eur36/mt on the May price of Eur856/mt, according to
market sources. The initial settlement was confirmed by a
source at producer Ineos, who said he had settled with two of
his customers. Consumer M&G Group also later confirmed
following an initial agreement between Shell and consumer
Indorama. By Friday BASF was understood to have also
settled the price with a consumer, although this could not be
confirmed directly. “We settled at Eur820/mt FD NWE. The
fall was driven by Asian spot price and contract
nominations,” a source at Shell said Tuesday. A consumer
said that given recent falls in the Asian markets, the
settlement seemed “on the higher side” but added that
“taking into account ethylene and the exchange rate it is a
reasonable compromise.” “Europe is no different to the other
regions, it is not separate from the rest of the world. MEG is
soft everywhere. In Europe there are a number of planned
turnarounds, but demand has taken producers by surprise, so
the market is balanced,” the source said. Another consumer
said he was trying to follow the initial settlement with
another producer, but expressed doubts for a prompt
agreement as the seller “thinks it’s too low a price.” In recent
weeks Asian spot prices have fallen from an April high of
$947/mt CFR China, to the current assessed price of
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
$727/mt. Buyers have pulled back on purchasing MEG as the
polyester industry enters a lull after the high demand season
between March and April ahead of summer. This has seen
consumers looking to ensure parity with the Asian market,
although some producers remain eager to maintain or even
improve margins following an increase of Eur10/mt in the
upstream June ethylene CP. Spot prices were understood to
have held steady over the week, with little change observed
in the way of steady demand from downstream PET. A source
said the truck price was “still around Eur740-750/mt FCA
NWE,” with levels steady due to the firm ethylene
movement. “Everything is proceeding within expectations.
The CP settled down with Asia and the weak exchange rate.
The market is balanced, there are some producers in
shutdown, but these were planned so there should be no
influence on the spot price,” the source said. In PET, Asian
prices have fallen from an April high of $1,300/mt FOB, with
the price now assessed as low as $1,218/mt FOB NEA as
buyers seek to secure cheaper cargoes amid falling PET
feedstock prices, despite firm seasonal demand. This saw
sentiment similarly weak in Europe, although the overall
tightness of the market appears sufficient to maintain prices.
The NWE PET market finally received clarity on the Middle
Eastern antidumping issue, after the European Commission
announced prohibitive duties on bottle-grade imports from
the United Arab Emirates, Pakistan and Iran, according to a
DG Trade release, Tuesday. An antidumping duty of
Eur54.80/mt will be applied to imports from the UAE, but
zero on Iran. However, countervailing duties have been
imposed on the UAE of Eur42.34/mt, Eur83.64/mt on
Pakistan and Eur142.97/mt on Iran. A producer said
antidumping measures would pave the way for further
increases in Northwest Europe, where prices have risen
steadily by Eur400/mt since November 4, 2009 to a high of
Eur1,260/mt FD NEW on May 5. However, on Tuesday a
trader said signs of weakness were emerging, with the spot
range now seen at Eur1,180-1,230/mt FD NWE. The source
added it was not so much a decrease, however, but an effect
of sellers “reducing stocks and supporting regular customers.”
United States
Contract prices fell 5 cents/lb and with lower costs in the US
further cuts were possible in July. As usual, however, US
prices will depend on the stability of the Asia market. Since
there are US contracts based on the Asia Contract Price,
participants kept a close watch on China to see if the spread
between spot and ACP widens. June ACP’s were at $960-
970/mt, but the spot market in China was just under
$$730/mt which was a wide enough spread to pull down
contract nominations in July and US-related contracts with
them. As MEGlobal tends to move its North American
benchmark in sympathy with the ACP’s, the other primary
contract mechanism was also likely to drop. MEGlobal’s June
North American benchmark was at 48 cents/lb, less 15%
discount for large volume buyers, putting these contracts at
just over 40 cents/lb. Spot export traders were kept on the
sidelines with the arbitrage window to Asia and Europe
15
 PLATTS POLYMERSCAN
closed. Considering CFR China prices at about $727/mt, FOB
USG values would have to be at least $100/mt under that for
an export to be viable. But at $627/mt or 28 cents/lb, it was
not an attractive price for producers. Spot ethylene would
have to continue to decrease in the US for a producer to take
a look at such a low price. The big action in the US was the
spot railcar and truck market which for the last several weeks
had seen tremendous demand from clean up efforts in the
USG from BP Macando oil spill. This demand was said to
have ended, however, and a source commented that many
cars had even been turned away at the last minute which
were then sold at distressed prices as there was a question
about the specs of the glycol. The on-spec truck and railcar
market was talked in the mid-40’s cents/lb. Demand from the
anti-freeze segment was relatively slow as it was the off-
season for blenders, but PET makers continued to run hard at
about 90% operating rates with the peak bottle making
season still underway. There was also producer demand in
the US with MEGlobal on sales control and under
turnaround in Prentiss, Canada through June.
Asia
Asian monoethylene glycol prices continued to take a beating
this week as they dropped $18/mt from last week to end at
$727/mt CFR North East Asia. Buyers have started to pull back
on buying MEG as the polyester industry enters a lull after the
high demand season between March and April ahead of
summer. While PET bottle chips were still in good demand, this
represents only a small buying share in the MEG market.
Buyers in China also remained cautious, tracking the local stock
markets, which failed to rebound in tandem with other global
markets. The slow buying sentiment was further magnified by
ethylene prices that dropped $89/mt to $931/mt CFR North
East Asia. This means that the theoretical cost price for MEG
stands at $679/mt. However, industry sources say this is not
necessarily the actual cost price due to feedstock supplied on
contract basis. High inventory in eastern Chinese tanks
continues to cast a shadow over the market there as MEG
buyers find it hard to find space until the end of June. The
other fiber intermediate purified terephthalic acid remained
depressed after rebounding briefly Monday to $885/mt CFR
China, up $25/mt from last Friday. By Friday, PTA spot prices
were down to $857/mt CFR China. Similarly, PTA September
futures on the Zhengzhou Commodity Exchange were down
Yuan 218/mt ($32/mt) on the week to close at Yuan 7,386/mt
Friday. These movements in PTA have put further pressure on
the MEG market. On the other hand, sellers were unwilling to
settle at the constantly lowering bids, on firmer crude prices
this week. Late week, few deals were heard as buyers and sellers
were locked in a stalemate, with offers heard at $735/mt CFR
China and bids at $720/mt CFR China. “On Friday, sellers were
willing to discuss at $730-735/mt CFR China levels, but the
bids were too low,” a trader said. This week, Sinopec nominated
its June contract price at Yuan 6,500/mt, down Yuan 400/mt
from its May settled price. The CP is usually higher than Platts
previous month’s average prices, but Sinopec’s June CP broke
the trend. Market participants say this is likely to set the ceiling
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
for the coming weeks. In plant news, South Korea’s Honam
Petrochemical shut its 160,000 mt/year MEG plant in Yeosu on
Tuesday. It kept its 250,000 mt/year MEG plant at Daesan shut
longer than its scheduled turnaround on poor margins.
Propylene
Europe
Spot free delivered propylene prices for Northwest Europe
headed further south this week as buying interest waned, with
most market sources describing their inventories and positions
as balanced. On Friday, two traders reported having done spot
deals at around Eur1,000/mt ($1,120/mt) FD NWE for polymer
grade parcels in inland Europe. On the coast, one trader said he
had heard prices at around Eur950-960/mt for PGP. “Molecules
are becoming more accessible,” he added. Continued plant
outages in Germany are still impacting supply availability and
most industry players agreed that positions were “balanced to
short” inland and “balanced to long” on the coast. The spot
market was generally quiet, with most producers saying their
production units are working “flat out” to fulfil their
contractual obligations and have no spare output to offer. But
the market remains in “delicate balance” and supply could
easily tighten again if another cracker suffered an unplanned
shutdown, sources said. Demand remained healthy, although
orders are certainly slower than what the market saw in April
and early parts of May, according to European producers and
buyers, adding spot PGP prices are moving to slightly below
contract levels. One seller said it was struggling to offload
materials in the coast and the offers received were “ridiculously
low.” “We didn’t really get outright buyers for June PGP. CGP is
even worse, not a single buyer in Europe that we can find right
now,” a producer said, adding that recent imports have beefed
up supply and are weighing down on coastal prices. One trader
said that imports are causing a “temporary overflow” in the
coast. A South-American olefins producer said it had sold a
cargo of 6,000 mt last week for early July arrival in Europe, and
is also looking for buyers for another 5,000-6,000 mt. “It seems
no one wants it in Europe at the moment,” the source said, and
was looking now to buyers in Asia. A UK producer said that
any weakness in values will be gradual and temporary. “Prices
are coming off slightly but not bombing. There’s no reason for
that at all,” he said, commenting that speculators may be
trying to talk down prices because of the decline in propylene
prices in Asia, the volatility in ethylene and energy values and
as production capacity slowly come back on stream. On
Thursday, BPRP, the German petrochemicals arm of BP, lifted
the force majeure on propylene supplies from the fluid catalytic
cracker at its Rotterdam refinery in the Netherlands, a company
source said. The source added that force majeure remains in
place on supplies from the FCC at PCK Raffinerie’s plant in
Schwedt, Germany, where production is currently ramping up.
Force majeure was declared on propylene out of Schwedt in
mid-May following a fire at the site, and also out of the
Rotterdam unit, which suffered a power failure. The Rotterdam
FCC produces almost 50,000 b/d of gasoline and around
16
 PLATTS POLYMERSCAN
150,000 mt/year of propylene. The Schwedt unit has a
production capacity of 200,000 mt/year of propylene.
United States
US June propylene contracts initially settled 8 cents/lb lower
Thursday, bringing June polymer grade propylene contracts to
55.50 cents/lb and June chemical-grade propylene to 54
cents/lb, sources told Platts. The decrease followed a previous
12 cents/lb decrease in May contracts and marks a 27%
decline in contract prices over the course of two months. In
spot RGP appeared to stabilize this week with several June
trades. June traded twice midweek at 38 cents/lb MtB pipe
and then again on Thursday at the same level. Spot PGP and
CGP activity was limited on the week, last heard traded at 51
and 49.50 cents/lb, respectively. In production, Dow was
expected to restart its steam cracker at Plaquemine, Louisiana,
in mid-June, sources said. The company has an estimated PGP
capacity of 833 million lbs/year.
Latin America
Propylene contract prices for the Brazilian domestic market
fell 12% in dollars for June to $1,149/mt FOB, said a source at
Braskem. The Brazilian propylene price formula usually
follows the US and European contract movements with a
month lag. In May, propylene contract prices in the US went
down 16% and in Europe down by 6%. Downstream, PP
Brazilian offers to Mercosur were reduced by $100/mt for
June, said a source. “We are trying to be more competitive in
the market with the offer reduction,” said the source.
Following the drop, the Brazilian PP offers to Paraguay and
Uruguay were heard at $1,700 1,800/mt CFR for homo film,
raffia and injection, $1,800-1,900/mt CFR for co-polymer
impact and at $1,870-1,970/mt CFR for random.
Asia
Prices leaped $90/mt during the course of the week, as
traders sought to cover short positions taken two to three
weeks ago when crude oil, propylene and PP prices were in a
steep downturn. It also has come to light that Idemitsu was
expected to lose about 18,000 mt of propylene production
from a monthlong unplanned shutdown of its steam cracker
in Chiba, Japan. The steam cracker can produce 224,000
mt/year of propylene from naphtha supplemented with LPG,
and is to be taken offline in late June for repairs. The plant
was operating at full capacity Thursday. Through a number
of physical cargo swaps, Idemitsu has acquired enough
propylene from its peers in Chiba to offset its production
loss. A rebound in the price of crude oil futures to over
$74/barrel also fueled propylene’s increase. Three deals were
heard to have transpired Thursday. Platts was able to confirm
two of them — H2 June done at $1,100/mt FOB Korea (L/C
at sight) 1,500 mt, between LG Chem and a Korean trader,
and mid-July at $1,110/mt FOB Korea (L/C 10 days) 1,500
mt, between YNCC to Korean trader. A Chinese trader
reported buying an H2-June/H1-July lot Thursday at
$1,120/mt CFR (L/C 30 days), but the deal could not be
confirmed. On Friday, selling interest started from $1,170-
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
1,180/mt CFR China, with higher-end rates closer to
$1,200/mt. LG Chem had raised its selling interest to
$1,150/mt FOB Korea for loading within July. Propylene’s
price increase ran counter to a $15/mt drop in polypropylene
values. PP margins returned to negative mode after a brief
sojourn into the black last week. PP margins were negative by
$80/mt Friday, based on a raffia grade PP price of $1,215/mt
CFR China/Northeast Asia, propylene value of $1,145/mt
CFR China and a monomer-to-polymer conversion cost of
$150/mt. To break even a PP producer in Asia would have
needed to price its raffia cargoes at at least $1,295/mt CFR
China/NE Asia, or $150/mt above the price of propylene.
Asia’s PP demand has been extremely lackluster, with worries
about the health of the global economies prompting
converters and distributors to de-stock.
Butadiene
Europe
The market for butadiene and crude C4 continued to be
perceived as tight in Europe as a continued demand for export
material sucked out any spare product in the region. With the
continent’s largest consuming site, Butachimie’s 325,000
mt/year adiponitrile production plant in Chalampe, France still
on a maintenance outage, butadiene was longer in principle.
However, sources said that they had previously adjusted
volume flows to account for the outage. During the week
LyondellBasell lifted a force majeure from supplies of butadiene
out of its 80,000 mt/yr Berre, France unit, a company source
said. The force majeure had been originally declared April 15.
Coupled with this, Dow’s steam cracker at Bohlen, Germany
was restarted this week with the company expecting to be
producing butadiene Friday or Saturday, according to a
spokesman. Also, Sabic confirmed Friday it had lifted force
majeure on supplies of butadiene and raffinate 1 at Wilton, UK,
a Sabic spokesman confirmed. However, sources continued to
bemoan the amount of light cracking and the ensuing low C4
yields. “There is a substantial reduction in production this
year,” one source said. “The light feedstock cracking season
seems to widen every year.” While light cracking is the main
reason for lower C4 production in the US, the outlook for
Europe was also gloomy. “Middle East supply into Europe is
increasing,” a producer said. “They tend to crack ethane, so no
crude C4 is produced.” With more Middle East capacity due to
come on in the second half of the year, C4 customers are trying
now to secure volumes for the future, he said. At the moment,
the export market from Europe was active, sources said, driven
by continuous demand from the US and aided by a weaker
euro versus the dollar. One seller reported selling an
unspecified-sized parcel to a trader at a price between
Eur1,600-1,650/mt, without specifying the terms or size. While
European buyers said they were getting adequately supplied,
one said he was scouring for additional volumes in order to
make spot sales. Another source said the export market was
still firming, citing sell ideas at $2,150/mt FOB NWE. However,
the bullish nature of the NWE market was also illustrated this
17
 PLATTS POLYMERSCAN
month by another increase in the monthly contract
settlement between Ineos Olefins and its partners including
Dow. The companies agreed on a price of Eur1,400/mt FD
NWE for June-delivered material, an increase of Eur50/mt
compared to May. Looking forward to third quarter
contracts, sources said that discussions had not commenced
yet, but the sentiment, considering the spot prices
throughout the second quarter, would be for another
increase. Considering the monthly contract price, the
reported trade and the return of production sites, spot
butadiene was assessed down Eur20/mt this week at
Eur1,670-1,680/mt FD NWE. On the export market, FOB
prices were reported in a wide range, from as low as
$2,000/mt to as high as $2,150/mt, with no trade reported.
At the same time, considering the US is the prime export
destination, and considering a US market between $2,250-
$2,400/mt, the FOB price was assessed up $12/mt at $2,060-
$2,070/mt FOB R’dam. Fluctuations in naphtha values and
the volatile exchange rate were making it harder to pinpoint
prices, one trader said. The same was true for crude C4 exports.
While most sources reported a factor of between 1.30 and 1.33
to naphtha, one seller reported doing business at a factor of
1.35. With no confirmation of the trade and considering the
return of production units in Europe, the factor was assessed at
1.32 to naphtha on a CIF NWE basis. The raffinate 1 market
continued to show a wide disparity between southern Europe,
where product was proving to be very long, and northern
Europe where demand for blending into ETBE and other
gasoline components was keeping demand moving. “While
May was long, I have been getting less calls from sellers,” one
buyer said. “We are in the middle of the gasoline season and
it’s a cheap product for blending.” Indeed, one source reported
selling an unspecified-sized parcel of R-1 at a factor of 1.18 to
naphtha on a CIF NWE basis in northern Europe for delivery
mid-month. At the same time, however, a southern European
producer said he was selling product as low as naphtha flat on
a FOB basis for export to the US. This level was also echoed by
a buyer who saw the market “awash” with product. With more
European crude C4 production sites coming back online this
week, product will likely get more plentiful during the rest of
the month. Considering the reported levels, the lengthening
market and the seasonal bullishness from gasoline blending
demand, the R1 factor was assessed unchanged this week at
1.13 times naphtha on a CIF NWE basis.
United States
The spot US butadiene price fell slightly this week, but
remained well above the settled contract level. Spot was
talked between 103 and 110 cents/lb, with the assessment at
105 cents/lb, down 3 cents from last week. Spot was 13 cents
above the June contract price, though, as supplies remained
tight. The contract was initially nominated up 7 cents by
Equistar, with Exxon following with a 5-cent increase. TPC
capped the increase at 3 cents, though, with Shell following at
that same level. There appeared to be some spot relief this
week as one of two ships unable to unload in recent weeks
was able to discharge at a terminal near Baton Rouge. A
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
source said the material was likely to be shipped by railcar to
buyers. A second ship, though, was still looking for a home
for about 5kt of material. Sources said the material was unable
to be fed into the US pipeline because of specification issues.
One source said the material would likely end up in Mexico.
There also was concern this week that a shortage of Crude
C4s in the US could hamper butadiene production, a source
said. Regarding imports of butadiene to the US, one cargo
from Korea was heard booked, with loading in mid-June. The
5kt of material was being shipped from Korea to the US on
the Norgas Alameda. That was on top of two other shipments
from Korea expected to reach the US in the next couple
weeks. Two shipments from Europe also are expected.
Latin America
For the Brazilian domestic market, butadiene contract prices
increased 6% in dollars, said a source at Braskem Friday. The
June butadiene contract in Brazil after the price increase was
heard at $2,132/mt FOB. Brazilian butadiene contract prices
follow the US contract prices movements closely.
Asia
FOB KOREA/JAPAN: Prices basis FOB Korea/Japan dropped
$32/mt. Buying appetite for spot FOB Korea/Japan cargoes is
quickly disappearing amid sufficient exports from China,
which is usually an active importer in the region. A FOB
China cargo was reported to have been transacted below
$2,000/mt. Some Korean cargo term lifters started seeking
opportunities to sell term cargoes. Early Friday, China’s Shen
Hua emerged trying to resell its ex-Korea term cargo (1,500
mt) for June loading at $2,050/mt FOB Korea. No buying
interests were reported at $2,050/mt FOB Korea. However,
some market sources were skeptical if Shen Hua will be able
to resell the cargo under its term agreement. Meanwhile,
Idemitsu’s Chiba steam cracker outage may prompt tight
crude C-4 supplies in the country. A 1,800 mt crude C-4 lot is
due to be delivered for June from Indonesia to cover
Idemitsu’s supply shortfall. CFR TAIWAN/CHINA: The market
continued dropping amid heavy supplies in the local China
market. China’s local butadiene market dropped to Yuan
16,000/mt ex-tank, or at $1,973/mt on an import-parity
basis. Import demand was scarce this week as end-users in
China were able to purchase cargoes in the domestic market.
However, traders’ offers were still at $2,100/mt CFR
China/Taiwan as spot availabilities in the region were rather
limited. Traders were also reluctant to reduce offers as
negative cracking margins may prompt lower cracker
operations in the near term. Meanwhile, fixed price
discussions in Taiwan were limited. End-users in Taiwan were
only interested in buying on a floating price basis amid
weakening market. CFR SEA: Trading activities were limited
in Southeast Asia as end-users received sufficient supplies on
a term contract basis. Shell is due to deliver its term cargo
from its new 155,000 mt/year butadiene unit next week to
South Korea’s Kumho. No fixed price discussions were
reported this week, but the market dropped in tandem with
falling CFR China market.
18
 PLATTS POLYMERSCAN JUNE 9, 2010

POLYMER FEEDSTOCKS: AROMATICS

Paraxylene Polymer Feedstocks – Aromatics

Europe Weekly Average Spot*

Styrene FOB Korea ($/mt) 1069.40-1070.40
The June NWE PX contract price was fully settled at Eur835/mt Styrene FOB Rdam ($/mt) 1164.63-1166.38
($1,019/mt) FD NWE this week—a fall of Eur35/mt versus the Styrene FOB USG (¢/lb) 50.85-50.95
May CP of Eur870/mt. The initial settlement was reported by
Paraxylene FOB Korea ($/mt) 903.80-904.80
consumer Cepsa Quimica on Wednesday morning. That
Paraxylene FOB Rdam ($/mt) 901.75-906.00
afternoon, producer Total confirmed settling at Eur835/mt, Paraxylene FOB USG ($/mt) 893.75-898.75
with Lotte UK also confirming their acceptance of the initial
Monthly Contract Price
price Thursday. ExxonMobil were also said to have accepted the
Styrene Barge FD NWE CP (Eur/mt) (JUN ) 1072.00
initial price, although this could not be confirmed directly. Styrene Truck FCA Rdam CP (Eur/mt) (JUN ) NA
Sources said the CP had been a compromise, with one Styrene FOB USG (¢/lb) (JUN ) 54.50-55.50
consumer saying: “I wanted a price below Eur800/mt to be
honest, but apparently that’s impossible for the economics of Paraxylene CFR Asia Average (Jun) 940.00
Paraxylene FD NWE (Eur/mt) (JUN ) 835.00
Europe PX producers.” This followed a full settlement for the Paraxylene FOB USG ((¢/lb) (JUN ) N/S(Q2)#
Asian CP at $940/mt (around Eur770/mt) CFR Asia. Spot PX
* Average prices for week ending previous Friday. # US PX CP are typically settled retroactively,
rose by $4.50/mt this week to reflect improving global prices refer to most recent settlement. To convert Cts/lb to $/mt, multiply by 22.046.
sentiment, although the absence of solid spot indications in
Europe made it difficult to ascertain a price.
US Styrenics Prices
United States
(¢/lb)
US PX shed $15/mt on the week as energy was pulled down 100
by bearish economic news from Europe. Early in the week,
there was a bid at Asia minus freight, but sellers refused to 80
consider it as a legitimate bid. Meanwhile June contracts
were still being negotiated, but consumers were certain of a
60
drop given the lower June mixed xylene contract. In May,
the CP was 52.75 cents/lb ($1,163/mt). With at least an 8%
40
discount, the net CP was around $1,069. Downstream, some
PET producers already announced a 2 cents/lb decrease in US Domestic Dlvd GPPS
June, as they anticipated lower PX costs. 20
Styrene Spot USG

Asia
PX: Up $6 Friday to end the week at $910.50/mt FOB Korea
and $928.50/mt CFR Taiwan/China. There were more
buyers than sellers on the market as prices continued to
rise, and “sellers don’t want to spoil the momentum”,
one trader remarked. There were no participants during
the Platts Market on Close assessment process, but several
bids were heard post-window for CFR Taiwan, Asia-origin
PX. A bid for H2 June rose from $920/mt CFR to $930/mt,
while an H1-July bid was at $930/mt. For the week, PX
rose $15.43, or 1.7%, and hit an intra-week low of
$902.50/mt CFR Wednesday as sentiments weakened after
the PX June Asia Contract Price was settled by all three
producers — ExxonMobil, Idemitsu Kosan and Nippon
Oil Corp. — at $940/mt CFR Asia, down $120, or 11.3%,
from May. Separately, Sinopec nominated its June CP at
Yuan 7,600/mt ($933/mt on an import-parity basis),
down Yuan 800, or 9.5%, from May. Tuesday, two Asia-
origin parcels for July arrival were heard at $915/mt CFR,
and another deal was heard at $925/mt CFR Thursday. In
market news, Taiwan’s CPC issued a buy tender for 5,000
mt of H1-July arrival PX on a floating formula. The
0
20-Jan 17-Feb 17-Mar 14-Apr 12-May 09-Jun
Notes: All aromatics prices reflect assessments at close of previous Friday.
tender will expire on June 9. Thailand’s PTTAR also
awarded its sell tender for 5,000 mt of July loading PX at
a $16-20/mt discount to a 50% ACP/50% spot price
formula. Isomer-MX: Up $5 to close at $802/mt FOB
Korea and $910/mt CFR Taiwan. There were no
participants on the MOC, but offscreen, two offers were
heard, at $820/mt FOB Korea and CFR Taiwan. Post-MOC,
a bid was heard at $800/mt FOB and it was said that
negotiations were underway at around $810-820/mt FOB.
Earlier in the day, a bonded warehouse cargo ex-
Zhangjiagang was said to be offering at $820/mt,
negotiable to $810/mt — but Chinese buyers felt that the
price was still too high. Chinese buyers are mainly
solvent-MX users, and solvent-MX was assessed at
$795/mt CFR China this week, up more than $40 on the
week. The poor PX-MX spread continues to cast a shadow
over the mixed xylene, even as supply tightens due to the

Copyright © 2010, The McGraw Hill Companies 19

 PLATTS POLYMERSCAN
closure of arbitrage window between US and Asia. A
trader said supply is not the issue now, but demand.
“Demand is extremely low, so even if supply is tight,
price will not rise.” Week-on-week, isomer-MX gained
$21.25, or 2.7%, with two MOC deals Tuesday at $806/mt
FOB Korea for H1-July loading. Both deals were sold by
KP Chemical to SK Energy. In market news, MRPL’s sell
tender for 10,000 mt of MX to be lifted between July 1-10
was said to have been canceled as the bids failed to meet
the floor price.
Styrene
Europe
Styrene prices lost further ground this week as confidence
ebbed prior to the negotiation of the June contract price.
Prices were assessed down $37/mt versus last week. “There’s a
lot of volatility in currencies, oil and equities and if you put
those factors in...[traders] are cautious about what will
happen in the next few hours,” a net consumer said.
However, despite this volatility demand was considered good.
“There is plenty of stock available and buyers want to talk
down [the market] to pick up a good price. “The slide in oil
has calmed and benzene is higher. There’s a stable geo-
political environment,” a net consumer said. An NWE
styrene CP barge price for June was settled at Eur1,072/mt
($1,309.50/mt) FD NWE Wednesday, between Synthomer
and BASF, Synthomer said. The CP represents a fall of
Eur73/mt on the May CP of Eur1,145/mt.
United States
The US styrene price continued to fall this week, as the
benzene and ethylene contracts settled lower. There were
several deals heard done, with a parcel heading to a Mexican
buyer, for a price pegged below 50 cents/lb. A US trader also
bought for export to Europe for a price between 50.5 and 51
cents/lb. A US producer also was heard to be shipping
product to Asia, though the price required to make shipping
product to Asia profitable remained below US variable costs.
US styrene traders could profitably move product from the
US to Europe if they are able to buy below 51 cents/lb, a
producer said Friday. With European styrene trading at
$1,180/mt FOB R’dam for June, and assuming $55 to cover
freight and margin, the arb level from the US to Europe was
estimated at just above 51 cents/lb. A trade was heard done
late last week between 50.5 and 51 cents/lb. The buyer
confirmed the 5kt of material was being shipped to Europe,
but did not confirm the price. The US styrene price has
fallen sharply in recent weeks, as both the US benzene and
US ethylene spot prices have dropped. The US benzene
contract for June was settled at 295 cents/gal, down 57 cents
from May. The ethylene contract for May was settled this
week at 44.75 cents/lb, down 7.75 cents from April. At those
levels, variable costs to produce styrene in the US were near
48 cents/lb. With the arb level near 51 cents/lb, producers
would be able to capture nearly 3 cents/lb to cover fixed
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
costs and margin by selling at the arb level. The arb to Asia
was trickier to make work, though, with the July
assessment Friday at $1,090/mt CFR China. At that level,
the US price would have to fall to near 46.5 cents/lb to
profitably ship from the US to Asia. The US domestic price
was heard near 55 cents/lb this week, down a penny from
last week. The US 3- to 30-day price was assessed at 50.75
cents/lb FOB USG this week, down 1.75 cents from last
week. The balance of June was assessed at 50.95 cents/lb,
down 1.5 cents from last week.
Asia
Asian styrene monomer held steady Friday with the FOB
Korea and CFR China benchmarks remaining at $1,062.50/mt
and $1,082.50/mt, respectively. Over the week, however, SM
came under intense pressure from the aftereffects of the
eurozone debt crisis on concerns that demand erosion could
result from the fallout. With China’s manufacturing
expanding at a slower pace than anticipated in May, market
participants also took a more cautious approach. This resulted
in SM prices trending down 2.92%, or $32/mt, from
$1,094.50/mt FOB Korea on May 31 to Friday’s $1,062.50/mt,
while domestic SM prices in China trended down from Yuan
9,075/mt to Yuan 8,975/mt over the same period. In Friday’s
spot market, a firm bid for an any July-loading Korean-origin
cargo was heard at $1,055/mt FOB Korea, while other buying
indications at $1,060/mt FOB Korea for the same laycan were
also reported. A sell idea was heard offscreen at $1,080/mt
FOB Korea. In the CFR China market, buying indications were
expressed at $1,080/mt for any July-delivery cargoes, while
selling indications were heard at $1,100/mt CFR China. No
deals were heard by market close, however. In the CFR China
market, parcels were traded unchanged over the day at Yuan
8,950-9,000/mt ($1,098-1,104/mt import-parity basis) in spite
of firmer front-month crude futures, which were up
$0.70/barrel on the day at $74.75/b, as main feedstock
benzene was assessed down $3/mt on the day at $815/mt FOB
Korea. Buyers also pointed to the high run rates being
maintained, which includes Tianjin Dagu’s 500,000 mt/year
plant at 85% capacity, while CSPC’s 700,000 mt/year plant
was running at full capacity. In other plant news, Sinopec
Zhenhai Refining & Chemical Company is expected to start
its 620,000 mt/year SM plant by the end of June, in line with
a restart of the company’s 1 million mt/year naphtha-fed
steam cracker by mid-June. Based on an initial 50% run rate, a
minimum of 25,000 mt of SM is expected to be injected into
the supply chain in July.
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20
 PLATTS POLYMERSCAN JUNE 9, 2010

POLYMER FEEDSTOCKS: INTERMEDIATES

Purified Terephthalic Acid Polymer Feedstocks – Intermediates

Europe Weekly Spot

PTA CFR China ($/mt)* 865.0-867.0
Lotte Chemical UK declared force majeure at its 500,000 PTA CFR SE Asia ($/mt) 844.0-846.0
mt/year Wilton PTA plant this week, with the outage expected PTA CFR South Asia ($/mt) 877.0-879.0
to last 7-10 days and result in a loss of 15,000 mt of material,
according to a company source. “Force majeure was declared EDC CFR FE Asia ($/mt) 485-487
EDC CFR SE Asia ($/mt) 490-492
yesterday at the PTA plant. There was a catastrophic loss of EDC FOB NWE ($/mt) 480-510
steam from the steam supplier on Sunday. The primary and EDC FOB USG ($/mt) 420-430
secondary steam supply options were lost for 20 hours,” the
source said. “I am not sure how long [the force majeure] will VCM CFR FE Asia ($/mt) 798-800
VCM CFR SE Asia ($/mt) 824-826
last...in the past this has taken 7-10 days. All customer volumes VCM FOB NWE ($/mt) 730-760
will be reduced in June.” The source added that the outage was VCM FOB USG ($/mt) 710-720
expected to impact on other PET producers in Europe, with
Lotte UK unable to offer its usual spot volumes—although the Acrylonitrile CFR FE Asia ($/mt) 2424-2426**
Acrylonitrile CFR SE Asia ($/mt) 2429-2431**
position was “containable in relation to contract customers.” Acrylonitrile CFR South Asia ($/mt) 2469-2471**
Another major PTA producer said it was already receiving more Acrylonitrile FOB USG ($/mt) 2420-2430**
orders as a result of the Lotte outage. Separately, Indorama was Acrylonitrile CIF Mediterannean ($/mt) 2358-2362**
understood to be in turnaround for PTA, although this was not Monthly Contract Price
expected to impact the wider market due to the integrated PTA FD NWE (Eur/mt) (NA ) NA-NA
nature of the company’s production chain. PTA Delivered USG (¢/lb) 48.48-48.50
VCM Delivered USG (¢/lb)(May) 39.44-39.44
United States US domestic prices reflect transaction pricing for medium-sized customers.
* Average prices for week ending previous Friday.
June’s formula derived PTA contract was on hold for the ** ACN prices reflect assessments at close of Tuesday
month’s paraxylene settlement. May’s PTA CP was at 48.49
cents/lb but was likely to decrease as participants expected a Platts Asian PTA versus Paraxylene ($/mt)
lower PX settlement in line with Asia and Europe. One buyer
believed PX could fall 4 cents/lb in June, which if put through ($/mt)
1400
in the PTA contract would result in about a 2.68 cents/lb
decrease in the intermediates contract. Fundamentals were PTA CFR China
balanced in the US with no supply shortages and demand 1250 PX CFR Taiwan
steady from PET makers.

Asia
Asian purified terephthalic acid closed $2 lower Friday at
$860/mt CFR China for Taiwan-origin cargoes. Two Taiwan-
origin deals were heard traded at $855/mt and 860/mt CFR,
while a Korean-origin parcel was heard traded at $840/mt CFR.
PTA has seen a volatile week as prices fluctuated according to
crude, equities, and downstream polyester sales. It lost $25, or
2.82%, over the week — but has managed to stage a rebound
after each plunge. Market watchers remain wary and buyers
have turned cautious, unlike two months ago when traders
were just buying up any available cargoes in anticipation of a
quick profit. Polyester makers said that exports are looking
increasingly difficult in Q3 due to the eurozone debt crisis.
China’s Ministry of Industry and Information Technology on
Thursday said April textile exports have increased 0.3% from
March, but the sector continues to face tremendous pressure
from due to uncertainties in US, Japan and the EU. The
appreciating Yuan is also making Chinese exports more
expensive, especially to the EU and Japan at a time when the
euro and the Yen are sliding. Compared with last Friday, the
CFR China and CFR SEA benchmarks were unchanged.
1100
950
800
15-Jan 12-Feb 12-Mar 09-Apr 07-May 04-Jun
Notes: All intermediates prices reflect assessments at close of Thursday,
with the exception of PTA CFR China.
Meanwhile, PTA feedstock paraxylene rose $15.43, or 1.7%, this
week to close at $922.30/mt CFR Taiwan/China, $18 lower than
the June Asia Contract Price settlement at $940/mt CFR Asia.
Based on a 50% ACP+50% spot price formula, PTA makers need
to break even at just $774/mt CFR China even though the
current spot price is well above $850/mt CFR China. September
futures on the Zhengzhou Commodity Exchange fell Yuan 232,
or 3%, this week, ending Friday at Yuan 7,386 per lot. CFR
India: Up $6 to close at $878/mt as spot activities picked up
due to the closure of MCC PTA India’s plant in Haldia. The

Copyright © 2010, The McGraw Hill Companies 21

 PLATTS POLYMERSCAN
800,000 mt/year No. 2 line was shut for a turnaround from
May 23-June 8, while the 470,000 mt/year No. 1 line was shut
for a three-day maintenance over June 3-5. Traders said
demand from India continues to grow and sellers are turning
their attention to the region as prices are now much better
than CFR China.
Acrylonitrile
Europe
NWE acrylonitrile prices held steady this week amid a dearth
of prompt materials, with the upside capped by consumers’
resistance to pay above $2,400/mt given the weakness in
feedstock prices. A buyer said he’d seen an offer at this level
for August delivery, US origin, but had turned it down as he
found the shipment date “too risky”. “Everbody’s expecting
prices to go down,” he said. Another buyer said he thought
$2,250-2,300/mt was a “fair” range given the weak propylene
values, but would accept $2,400/mt for June shipment. A
European producer however, said he would continue to offer
in the range of $2,360-2,420/mt. Several traders claimed to
have seen buying interest at $2,500/mt, but other market
sources described the level as “unsustainable” and expected a
sharp correction later on. “At the moment, these prices are
above the traditional cost base. This has got to correct at some
point,” said a fiber manufacturer. Supply constraints
prompted Ineos to continue to partially run the 280,000
mt/year Seal Sands ACN plant during the unit’s June 8-29
turnaround, a source said Tuesday. Petkim extended the
shutdown of its 90,000 mt/year ACN unit in Aliaga, Turkey, a
source said Tuesday. Trading sources said LukOil has restarted
the 140,000 mt/year Saratov plant in Russia following repair
work. LukOil has yet to comment.
United States
The US ACN price shifted lower this week as falling feedstock
prices pushed buyers away from the market. Sellers, though,
said prices should stay near $2,500/mt for export, considering
the current lack of supply. June and July were basically sold out,
one producer said, with orders for August already coming in.
Buyers, though, were hoping for prices below $2,400/mt as
propylene prices have fallen nearly 10 cents during the past
two weeks. Chemical-grade propylene values this week were at
53.5 cents/lb, down from 62.25 cents/lb two weeks ago. The US
ACN price this week was assessed at $2425/mt FOB USG, down
$45 from last week. The delivered price was assessed 2 cents
lower at 113 cents/lb. Downstream demand was expected to be
strong for a couple of months, a source said, particularly from
ABS producers. However, buyers were hoping to wait for ACN
prices to fall before attempting to restock, a source said.
Asia
Asian acrylonitrile prices in the Far East and Southeast Asia
started ceding ground, with a steep backwardation expected for
August on news that both ICC and Vinmar had resold a 5,000
mt cargo to Indian acrylic fiber producers at $2,370/mt CFR
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
South Asia for end August delivery. CFR Far East Asia/Southeast
Asia prices fell $25/mt on the week to $2,425/mt and
$2,430/mt, respectively, while CFR South Asian prices fell
$25/mt to $2,470/mt. Stiff buying resistance on weak
acrylonitrile-butadiene-styrene and acrylic fiber prices further
eroded structural support over the week. In line with the spot
ACN cargoes sold at $2,370 for end August delivery to buyers in
India, buying indications plummeted while South Korea’s
Taekwang abandoned offering its 1,000 mt cargo for June
loading in the spot market, and the cargo was heard diverted to
an existing contract customer in Korea. While spot cargoes
continued to remain tight over the remainder of June, with
Asian producers such as Taiwan’s China Petrochemical
Development Corp. and South Korea’s Taekwang having sold
out its June cargoes. While the 5,000 mt cargo sold by ICC and
Vinmar for end August delivery was outside the Platts 30 day
assessment period, Asahi Kasei’s contract price nomination for
June at $2,200/mt CFR Far East Asia, plus concerns the ongoing
sovereign debt crisis will affect demand for downstream ABS
and acrylic fiber applications, resulting in market participants
preferring to operate at lower run rates on contractual supplies.
In the domestic Chinese market, Shanghai Secco Petrochemical
was offering spot cargoes at Yuan 20,000/mt ($2,350/mt
import-parity basis) for H2-June delivery, down Yuan 500/mt
from its offer a week ago. Buying interest for spot cargoes was
also dismal in line with lower domestic ABS offers at Yuan
15,600-15,800/mt ($1,833-1,857/mt import-parity basis). This
led buyers to rely on existing contract supplies, as the economic
outlook remained uncertain on news from China’s State
Council’s Development and Research Center that China’s
economic growth may slip to 10-11% in the second quarter as
industrial production and investment expanded at a slower-
than-expected pace. In plant news, Secco shut one of two
130,000 mt/year ACN lines at its plant in Caojing, Shanghai,
for eight days of scheduled maintenance Tuesday. The second
line is running at full capacity, although Secco will not offer
spot cargoes during the turnaround.
Ethylene Dichloride / Vinyl Chloride Monomer
Europe
EDC: The NWE market was beginning to take on a bearish feel,
according to one market source this week. Little trade was
reported done and the lack of buy interest could see prices dip.
“I’ve done no further trade since last week and it feels like the
market might be turning downwards,” said the source,
although he added that prices hadn’t fallen yet. Elsewhere in
the chlorvinyls chain, IneosChlorVinyls announced a price
increase of Eur25/mt ($30/mt) per dry metric tonne for June
caustic soda business, a company statement said Tuesday. The
statement added that a further increase—which is yet to be
determined—will be applied July 1 for quarter 3 caustic soda
business. The company said the announced increase was “due
to reduced margins on the electro-chemical unit and a
continuing low stock position.” VCM: There was little change
reported in the VCM market this week, as low levels of
22
 PLATTS POLYMERSCAN
production in PVC meant VCM producers continued to use
product internally and restrict spot product availability. PVC
producers were bullish, with a minimum of Eur60/mt
targeted as a price increase for June. One producer said: “All
PVC producers are struggling. We all have the same needs as
an industry and we all face the same problems, so we may
end up with a more consistent approach to June.”
United States
The US EDC price fell this week as export demand remained
sluggish, and domestic demand was heard to be tapering off.
“Not much [EDC] is moving because the Asian market has
some bearish tones,” a trading source said. The price was
assessed at $425/mt FOB USG, down $25 from last week.
Also contributing to the lower price was falling ethylene
prices. The May US net ethylene contracts were settled at
44.75 cents/lb, down 7.75 cents from the April contract. The
settlement was in line with prior expectations of a 7- to 10-
cent drop. The move comes as spot ethylene values were at a
year-long low. PVC operating rates above 90% during the
past month helped keep some upward pressure on VCM
prices. That demand, though, was not expected to provide
enough support to offset the recent drop in ethylene prices.
The May US net ethylene contracts were settled down 7.75
cents this week at 44.75 cents/lb. The US VCM price was
assessed flat this week at $715/mt FOB USG. The delivered
price was at 39.44 cents/lb.
Asia
EDC: The Asian ethylene dichloride market weakened this
week to a five-month low Thursday. Spot EDC demand is
weakening as downstream VCM producers start reducing their
operations amid bearish VCM demand for PVC production.
Taiwan VCM decided to shut its 300,000 mt/year VCM plant
from the middle of June for at least two weeks due to weak
VCM demand. After a spot deal was reported done at $485/mt
CFR China this week, a firm bid dropped to $450/mt CFR Far
East Asia from $500/mt the previous week. Buyers’ sentiment
was also weakened in Asia on sharply-dropping ethylene
feedstock values. The CFR Northeast Asia ethylene price
benchmark was pegged at $961/mt Thursday, $59/mt lower
than last week. Meanwhile, an arbitrage window from the US
to Asia is still closed. The US EDC market is weakening, but at
a much slower pace than Asia, and prices basis FOB USG were
pegged at $450/mt. VCM: Asian vinyl chloride monomer
prices dropped $21-25/mt on the week to a five-month low
Thursday, pressured by weak VCM demand for PVC
production amid weakening PVC prices. Asian PVC prices
dropped $16/mt, or 1.7%, on the week Wednesday to settle at
a year-low of $949/mt CFR China. Tracking this trend, the
Asian VCM market also traveled south. Thursday, a spot cargo
was reported to have been transacted at $799/mt CFR China,
lower than a deal done level of $805/mt CFR China earlier
this week. Prices basis CFR Southeast Asia were between $820-
830/mt this week on thin trading. Some trading sources said
the Asian VCM market is near its bottom as local PVC prices
in China have started to rebounded slightly. Ethylene-based
Copyright © 2010, The McGraw Hill Companies
JUNE 9, 2010
PVC prices rose Yuan 50/mt to Yuan 7,600/mt delivered,
while carbide-based PVC prices rose Yuan 100/mt to Yuan
7,350/mt delivered. China’s carbide-based PVC market is
being lifted by firm carbide feedstock values amid rising
electricity prices in China.
Dimethyl Terephthalate
Europe
The upstream June NWE PX CP was understood to have
been fully settled at Eur835/mt ($1,019/mt) FD NWE this
week—a fall of Eur35/mt versus the May CP of Eur870/mt,
according to market sources. Following an initial settlement
reported by Cepsa Quimica Wednesday, producer Total and
Lotte UK confirmed their acceptance of the price, while
ExxonMobil was also said to have agreed it—although this
could not be confirmed directly. A consumer said the CP
had been a compromise, adding that the May CP of
Eur870/mt FD NWE had been “no good for anyone”.
“Eur835/mt was at the high end of the envelope, but with
the fluctuations in the exchange rate it was not clear
whether it would be a good price or not. It’s a matter of
comparing [the CP] to the previous CP and exchange rate at
the time,” he said. A DMT producer said Eur835/mt was
acceptable, but added it was still on the high side
considering the June ACP of $940/mt (Eur770/mt) CFR Asia.
DMT activity was understood to be firm, especially
compared to 2009, although one source said volumes were
still expected to drop closer to August.
NEWS
US toluene nearly 20 cents higher
above 2009 summer blend value
Houston — US toluene's premium over blend value is nearly
20 cents/lb higher so far during the 2010 driving season,
compared to the same period in 2009, according to Platts data.
Driving season typically runs from the beginning of May until
the end of September, sources said. The premium for toluene
over blend value considers data from 25 trading days were
taken from May 3 to June 8 in both 2009 and 2010. So far this
summer, the higher premium was due to suppliers who were
exercising "pretty good self-control," offering well above blend
value despite a lack of demand from the gasoline pool and no
export opportunities or chemical demand, sources said. "No
one wants to sell lower," one trader commented. One
participant said he needed to sell a minimum number of barrels
in order to be coaxed into producing enough material to go
into the spot market. Still others pointed to margins that
remained positive for swing toluene disproportionation (TDP)
and MSTPD units in the US, so there was still motivation for
manufacturers to continue to produce material. A
manufacturing source though said, "There is a point where
(toluene and mixed xylenes) will not go well above blend
23
 PLATTS POLYMERSCAN JUNE 9, 2010

value," because suppliers will start to slash rates. Currently
chemical demand was weak, given that Asian inventories
were full, and sentiment was bearish on questions about the
European economy. For instance, in East China this week,
toluene inventories held by traders were estimated to be at
180,000 mt Monday, far above the region's normal monthly
inventory levels of 60,000-80,000 mt. Further, Japan's Nippon
Oil Corp. Wednesday said it would maintain operating TDP
rates in Mizushima below 100% indefinitely, due to weak
production margins. Blenders meanwhile were seeking
cheaper octane values in ethanol and alkylate, sources said.
On June 3, US production of ethanol-blended conventional
gasoline hit yet a second all-time high for the reporting week
ending May 28, according to statistics released by the US
Energy Information Administration. The US produced 4.918
million b/d of conventional gasoline blended with ethanol,
up from 4.757 million b/d for the week ending May 21, the
EIA figures show. The previous high was for the week ending
May 14, 4.823 million b/d. On Thursday, toluene was assessed
23 cents above blend value at 224.72 cents/gal. Blend value is
an estimate of the price level at which toluene and mixed
xylene can profitably be used to boost octane or lower RVP
ratings in gasoline. Since the RVP values for gasoline shift
lower in spring and summer gasoline blends -- and both
toluene and mixed xylene have low RVP ratings -- blend
demand for both toluene and mixed xylene tend to increase
during the spring and summer.
European MTBE Eurobob factor
drops to 2010 low of 1.03
London — The Northwest European MTBE factor versus
Eurobob Wednesday fell to 1.03, both its lowest point this year
and a historical low since Platts began assessing Eurobob on
July 1, 2009. Wednesday's factor dropped below the previous
record low of of 1.045 recorded Tuesday. Octane-booster MTBE
is assessed at a factor — effectively a percentage ratio — to
gasoline barges, to reflect the economic advantages of
blending the component into gasoline. It can also be assessed
at an outright price in dollars/mt. The factor has now dropped
around five factor points since May 28, with sources citing
lackluster demand for MTBE against a glut of supply. Despite
an improving blending economics picture — which would
entice blenders to use more MTBE in their gasoline blends —
there remains too much MTBE in storage and an absence of
any incremental demand from fresh tenders, sources said.
Early this week market sources said that at a factor of 1.05
blenders would step in and buy barrels, but as yet the market
has yet to find its floor, they said Wednesday. "[A factor of]
1.05 has been the historical blend value at which buyers
would step in. Buying is lackluster because people are still
chewing through it [current over-supply]. If naphtha-gasoline
weakens you'll see people buying," a trader said. "There should
be a blend margin but no one is in a hurry to blend it. There's
no sense in bringing it in," said one industry player. "You
would [likely] optimize it by keeping in the Arabian Gulf or by
sending it into Asia," he added. "Europe is not a big enough
market to take it. At a factor of 1.03-1.04, how long will it take
to create a good blend value?" asked a trader. "With alkylate
trading at a 1.22 factor above gasoline and reformate at an
[approximate] $15/mt premium above gasoline, it's a question
of finding oxy [gasoline] outlets," a producer said. The problem
was that these outlets were few and far between, with little or
no gasoline US-bound arbitrage opportunities, sources said.
"Storage tanks are full. There is no arb, and more direct
ethanol blending in the US and the US can fulfill its own
demand [of components]. The Med is also slow. My customers
[there] are not complaining anymore. Sellers are finding it
[increasingly] tough," a second producer said. "Producers are
struggling. They brought more in [earlier this year]. The
Venezuela pull through on high factors attracted material [into
NWE]," the first producer said. In March Venezuela's state
PDVSA tendered for a combination of April and May-loading
MTBE. According to European market sources, the tender was
comprised of two lots: for 300,000 barrels to be loaded in late-
April and 200,000 barrels to be loaded in early May, 10 days
apart, equivalent to 59,000 mt. Prior to this PDVSA tendered
40,000-60,000 mt of MTBE for delivery March 28-April 3,
market sources reported. In addition, there was not enough of
a contango to attract storage, the first producer said.

Global Production Update

Company Location kmt/yr Product Timing Status
JG Summit Bantangas 180 PP June 7 SU
Nanjing Jinling Nanjing 150 PP Jun 2 OR 90%
Nanjing Jinling Nanjing 150 PP Jun OR 100%
Nanjing Jinling Nanjing 150 PP May 7-28 SD margins
Indian Oil Panipat 600 PP Apr-May test runs
Indian Oil Panipat 600 PP Jun ave OR 65% planned
LB Plock 400 PP Jun 1 SU FM
Sabic Geleen 620 PP May 26 SU FM to be lifted next week
LB Plock 400 PP May 14 SD! FM
Borealis Porvoo 220 PP May 05 OR reduced - C3 shortage
Dow Seadrift, TX 300 PP May 27 SU - restarted
Dow Seadrift, TX 300 PP Apr 6 SD! mid-May restart

TA = scheduled turnaround; SD! = unplanned shutdown; SU = startup; DB = debottlenecking; OR = operating rate Contact: +44 207 176 6264

Copyright © 2010, The McGraw Hill Companies 24

 PLATTS POLYMERSCAN JUNE 9, 2010

EU carbon price to rise to Eur17.55/mt
by 2012: UK's DECC
London — The price of carbon allowances under the EU
Emissions Trading System is expected to rise to Eur17.31/mt
($20.74/mt) of CO2 equivalent by 2011 and Eur17.55/mt by
2012, the UK government said Wednesday. The projections for
2011 and 2012 are based on a central scenario, with a Eur8.84-
21.55/mt range for 2011 and Eur8.96-21.91/mt for 2012, the
department of energy and climate change said in a statement.
Looking further ahead, DECC said it expects the EU carbon
price to rise to Eur18.28/mt by 2015, Eur19.73/mt by 2020 and
Eur84.74/mt by 2030, according to its central projections. DECC
said its projections were revised to include new information on
fossil fuel prices, economic growth and changes in scope to the
EU ETS. "The impact of this new information on the DECC
carbon price model has been to revise the carbon values
significantly downwards," said DECC in the report. The
government department said one of the main challenges to the
modelling is to the estimated level of emissions that would take
place without the EU ETS. "Lower economic growth across the
EU has led to lower demand for electricity and carbon-intensive
industrial products, and therefore a lower expected level of
business-as-usual emissions. This has the effect of lowering EUA
prices as the amount of abatement that is required in the EU
ETS is reduced," said DECC. "Another significant change to the
modelling has been to incorporate more detailed research into
the abatement options available in the industrial sectors covered
by the EU ETS. This research shows that there is a greater range
of abatement options in these sectors than we have previously
assumed, which has the effect of lowering our carbon values," it
said. The scheme's regulator, the European Commission, has
said it intends to reduce the overall cap on carbon emissions
under the EU ETS using a linear annual factor of 1.74% in Phase
III, which would reduce the cap from 1.974 billion mt/yr in
2013 to 1.72 billion mt/yr by 2020. The EC has also said it
intends to extend the 1.74% annual reduction into the scheme's
Phase IV period, which will run from 2021 to 2028, and
beyond. A DECC spokesman said the sharp jump in its
projected prices between 2020 and 2030 is partly explained by
the department's use of two different models: one used for the
projections up to 2020 based on the current workings of the EU
ETS, and another longer term model which considers long-term
emissions stabilization goals. DECC's projections for carbon
price scenarios were based on the EU's existing target to reduce
economy-wide emissions by 20% from 1990 levels by 2020. The
figures in the report were quoted in UK Pounds/mt of CO2e and
converted into euros. The price of EU Allowances for delivery in
December 2010 on the over-the-counter market closed at
Eur15.70/mt on Tuesday, and the contract was trading little
changed at Eur15.71/mt by 12:50 BST (11:50 GMT) Wednesday.
Total, UAE's Masdar to build
world's largest solar power plant
Dubai — French oil major Total has teamed up with the
Abu Dhabi Future Energy Co, or Masdar, to build the world's
largest concentrated solar power plant in the UAE capital, the
first of its kind in the Middle East, the companies said in a
statement Wednesday. Masdar appointed Total and Spain's
Abengoa Solar to build the Shams 1 solar power plant, which
the statement said would be one of the UAE clean energy
company's flagship projects. Construction of the power plant
will begin in the third quarter of 2010 and is due to be
completed within two years. It will contribute toward Abu
Dhabi's target of achieving 7% renewable energy power
generation capacity by 2020. Shams 1, to be built at Madinat
Zayed, some 120 km southwest of Abu Dhabi, will have a
capacity of approximately 100 MW and a solar field
consisting of 768 parabolic trough collectors to be supplied
by Abengoa Solar. The project is registered under the UN
Clean Development Mechanism and is eligible for carbon
credits, the statement said. The plant will displace
approximately 175,000 mt of CO2 per year, equivalent to
planting 1.5 million trees or removing 15,000 cars from Abu
Dhabi's roads. Masdar will own a 60% stake in the
consortium with Total and Abengoa Solar holding 20% each.
Although the UAE is a member of OPEC holding
approximately 8% of global oil reserves, nearly all
concentrated in Abu Dhabi, and the sixth largest natural gas
reserves, it has taken the lead among the region's oil
producers in developing clean energy sources to help meet
rapid demand growth for energy in the seven emirates that
make up the UAE federation. Energy demand is growing at
an average 10% per year and all seven emirates are short of
natural gas for power generation and desalination plants. The
UAE is a net importer of natural gas through the Dolphin
Energy project, which supplies pipeline gas from Qatar's
North Field to the UAE and Oman. Masdar, which is building
the world's first carbon neutral city on the outskirts of Abu
Dhabi, is a wholly owned subsidiary of Abu Dhabi's
government-owned Mubadala, which has interests ranging
from energy to aerospace. Mubadala holds a 51% stake in
Dolphin Energy with partners Total and the US' Occidental
with 24.5% each.

] Polymerscan Volume 33 / Issue 23 / June 9, 2010

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