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

Copyright © 2010, The McGraw Hill Companies 3


PLATTS POLYMERSCAN JUNE 9, 2010

United States waiting for PVC offers this week and we heard in the market
The US PVC price was talked in a wide range this week, with prices should be down at least $50/mt,” said the source. A
some deals heard done below $800/mt. However, sources said US trader said he heard CFR Peru offers this week at
those deals were traders selling short and did not reflect the $940/mt. He said the domestic price, plus shipping and
actual value in the US. “From a producer’s perspective, you profit, could land product in Peru at that level. The higher
don’t want to establish that position,” a source said. “But if prices, he said, were probably a result of traders or sellers
enough deals get done at that level, it could make this market. adding on additional costs or margins. Freight rates from the
From a feedstock perspective, the market is going that way. But US to Peru were near $100/mt.
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 Low Density Polyethylene
below $800, the producers will just sell it all domestically if the
demand is there.” The source said the deals done below Europe
$800/mt would require the price to fall to $740-750/mt in July. European spot values have increased to Eur1,300-1,305/mt
But with domestic demand strong, he said he did not expect ($1,572/mt) FD NWE, as offers continued to move up in a thin
producers to be willing to go that low. “No one is at $800/mt market, sources said. Many traders reported lack of prompt
yet,” he said. The US price this week was assessed at $815/mt prime product, as allocations from producers remained thin.
FAS Houston, down $40 from last week. The US delivered price Some spot offers were reported in a Eur1,320-1,370/mt FD
was assessed at 43 cents/lb, down 3 cents from last week. NWE range but this did not attract buyers, sources said. Some
sources felt that prices improved at a slower pace, as global
Asia bearishness led to a more conservative volume approach.
The CFR China PVC price benchmark ticked down $4/mt on Despite thin supply, spot buying interest appeared more
the week to settle at a six-month low of $945/mt, as the cautious this week, as converters addressed immediate shorts
market continued to be hit by weak spot demand. End-users directly with producers. Traders also refrained from building
and distributors in China remained on the sidelines, stock, preferring to do back-to-back business only. “I am not
expecting a further slide in offers for July-delivery business — doing much business but I am not actively pursuing more,
especially from the US. US PVC prices were in the mid- everyone is jittery as China is sliding so people [traders] are
$800s/mt FAS Houston late last week, which can be translated afraid of a snowball effect and hold of purchasing,” a trader
to around $940/mt CFR China, including typical freight cost said. Producers however said the persistent slide in Asia would
of around $70-80/mt. However, Chinese buyers expect US have little effect as low European inventory level continued to
PVC prices to decline further to $900-910/mt CFR China, as support prices. “LDPE is a never-ending story, the main issue
the US PVC market will likely be hit by falling ethylene for us remains to keep our customers running as we have low
feedstock values there. “Lots of Chinese buyers flashing back stocks,” a producer said. “We are completely sold out for June,
what happened in 2008,” a trader said. Many Chinese buyers the market is short and tight and we have a very good order
and traders lost a lot of money in late 2008, as the Asian PVC book,” a second producer said. Converters, while confirming
market collapsed more than $700/mt within three months. thin allocations from producers, grew increasingly concerned
Elsewhere, prices basis CFR India dropped to $910-920/mt, about this own demand. “Our volumes in shrink film [serving
compared with $955/mt the previous week. Ex-Korean PVC the beverage industry] are slowing down for 10 days now as our
was offered at $920-930/mt CFR India this week, but end- customers have inventories,” a converter said. “We are slowly
users were reluctant to accept the offers, keeping their bids at getting to a low season, though the season has started much
$900-910/mt. On the other hand, some market sources said earlier this year and customers already built inventories so
the Asian PVC market was seeking bottom as supplies from maybe volume will pick up again in August,” he said. “We will
regional producers will likely turn tight due to possible run start decreasing our resin purchases in July.” Some other
cuts. For example, Taiwan’s Ocean Plastics plans to reduce converters agreed, also seeing a margin drop off in their
runs at its 150,000 mt/year PVC plant in Taoyuan to 80% in volumes. “Our lamination film volumes are stable, mainly due
July from 85% in June due to tight vinyl chloride monomer to shortages of the PET films, which we blend with
feedstocks. South Korea’s LG Chem was also reported to be polyethylene; PET film mainly go into more sophisticated high
considering run cuts at its PVC plants in Yeosu and Daesan tech applications now, so it is hard to secure volume for food
(total capacity 750,000 mt/year). In addition, carbide prices packaging,” a second converter said. “While food packaging
are increasing in tandem with rising power costs, which will and labeling segments are stable, we see lower volumes in
likely push carbide-based PVC prices in the near future. surface protection and bubble wrap films, as our customers are
holding back now, it is all about the cost for them,” he added.
Latin America “Demand is not as terrific as it was but it is still at good levels,
PVC prices were reported falling in the West Coast Latin it has eased a little,” a third converter said. Meanwhile in the
American market. US was offering PVC to Peru last week at contract market gross values were mainly discussed at a Eur30-
$980/mt CFR. A buyer in Peru said they believe PVC offer 40/mt increase versus May. Gross values reported by the
prices are going to be reduced by $50/mt or more. “We are producers were at a Eur1,385-1,410/mt range, with some

Copyright © 2010, The McGraw Hill Companies 4


PLATTS POLYMERSCAN JUNE 9, 2010

producers looking at a bi-monthly result, combining Uruguay at $1,750-1,800/mt CFR. “LDPE continues (to be)
increases in May and June together. But other producers short in the market, and we should see availability
focused their efforts on June as a stand alone month, restrictions this month,” said a source at Braskem. A buyer
targeting a Eur50/mt increase. “Our gross values are above [a] in Paraguay said they should buy LDPE from Brazil this
Eur1,400/mt level and we have increased prices by month. “We are worried with the drop in prices on LDPE at
Eur50/mt,” a producer said. Converters contacted this week this time, but we should nevertheless be purchasing it,” said
reported gross values at a Eur1,340-1,375/mt FD NWE level. a buyer. Brazilian LDPE offers to Andean Countries and
Gross values remained stable this week. Gross values in the Central America were reduced by $50/mt and they were
UK were assessed GBP10/mt ($14.57/mt) higher this week at pegged at $1,630-1,700/mt CFR for film. European offer to
GBP1,180-1,185/mt FD UK. In production news, force Peru was heard this week at $1,560/mt CFR. For the
majeure at LyondellBasell’s Aubette, France plant remained in Brazilian domestic market, Braskem had flat prices compared
place this week, a company source said. to May at Reals 4,250/mt CIF for LDPE film. Korean material
was meanwhile reported offers at $1495/mt CFR Peru.
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 Linear Low Density Polyethylene
FAS Houston, which several traders said they would have
jumped at had they been offered the resin. Other sources Europe
said LDPE was still at and over 70 cents/lb in railcars European spot values remained at Eur1,245-1,250/mt FD NWE
delivered to Houston. 70 cents/lb was too high for traders, ($1,506/mt) Wednesday, despite attempts to offer higher,
however, as there was less expensive LD available from other trading sources said. Buyers and sellers appeared far apart this
producers outside the US. There continued to be talk of week. Trading sources stressed that prompt availability
European LDPE making its way to South America and there remained constrained as European producers lacked sufficient
was Iranian LDPE also on the market. In addition, Dow’s inventory, while imported volumes remained marginal and
Chile LDPE plant was expected back up by the end of June were not overwhelming the market. “The imports are so small
after being idled after the massive earthquake struck they are not even causing a ripple in the market,” a producer
Concepcion, Chile in February. While it is only a relatively said. Despite firm prompt availability, converters refrained from
small plant at 50 kt/year any additional production was chasing spot offers at traders. This reluctance to commit from
welcome to a region extremely tight on LDPE. In other plant converters led to some downward correction at the higher end
news, LyondellBasell was still on schedule to restart its 245 of the spot offers, market sources said. “I could sell higher last
kt/year plant in Morris, Illinois by the end of June. 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
Asia June spot volumes are covered that is why it is harder to book
Low density polyethylene fell $5/mt on the week to end buyers now,” a second trader said. In the Asian market,
$1,335/mt CFR Far East Asia, while Southeast Asia prices dipped meanwhile, prices continued to fall with Far East Asian prices
$10/mt to end at $1,410/mt CFR. Despite poor market ending at $1,170/mt CFR Wednesday. Despite prominent
sentiment, LDPE was largely supported by tight supply in the bearishness in Asia, European LLDPE producers stressed that
region. Middle Eastern producers such as Qapco were heard relentless European demand, thin inventories and lack of
offering at $1,370/mt CFR China, while a Southeast Asian market moving imported volumes sustained firm
producer sold cargoes into China at $1,450/mt CFR China, fundamentals. “In Asia the falls are sentiment driven, they have
which is import tax exempt under a Free Trade Agreement. reacted to lower crude and some traders got rid of stock, the
However, buyers were tracking fluctuations in stock markets, direct customers in Asia are still buying, I think that the
crude and ethylene prices. “They are still unwilling to buy in [currently] depressed Asia is a short-term phenomenon,” a
large quantities. They’ll buy on a need-to basis,” a Malaysian producer said. “Asia is just a side show and the problems there
producer said of the Chinese market. Sellers were unwilling to will get resolved and it’s weak sentiment is not affecting
lower offers, arguing that supply is tight and they have better Europe.” European converters said that they had no issues to
sales prospects in other parts of Asia. Sinopec rolled over its ex- secure C6 grades but struggled with C4 allocations from one
works price from last week at Yuan 11,000/mt ($1,611/mt), but major supplier. “One supplier has reduced volume allocations
changed it to a listed price, which means buyers will be in June as they have very thin stock, which they have not been
refunded the difference if the settled prices are lower. In SE able to rebuild yet,” a converter said. “It is not a problem to get
Asia, a Singapore-based trader offered LDPE at $1,420/mt CFR volume from the rest.” Converters started to mention some
SE Asia. In plant news, Thai PTTPE plans to start up its 300,000 offers for July volume from the Middle East but this was not
mt/year LDPE plant next week after months of delays. corroborated by the rest of the market at the time of press.
“LLDPE will be more under pressure and the gap with LDPE
Latin America will grow further as we are getting more offers from traders for
June LDPE Brazilian offers to Mercosur (Argentina) were Middle East product,” a converter said. “No one will buy more
heard at $2,030-2,080/mt CFR while to Paraguay and than needed in Europe now, Turkey is down, Asia is down,” a

Copyright © 2010, The McGraw Hill Companies 5


PLATTS POLYMERSCAN JUNE 9, 2010

second converter said. Producers reported strong volumes in on import-parity basis) compared with last week’s average
June from most segments. Converters reported a marginal price of Yuan 10,000/mt. Sinopec rolled over its ex-works
downturn in end-user demand in some specific sectors. listed price from last week at Yuan 10,200/mt, where buyers
“Volumes in pallet wrapping segment are stable, only are refunded the difference if settled prices are lower. The
marginally down, but stretch film for beverage industry is more arbitrage opportunity has been open between Far East Asia
down, and I am not sure why,” a converter said. Producers said and South Asia since last week. This has prompted sellers to
while there was some caution about July, plant maintenance in move LLDPE cargoes to India, fetching as much as
August would prevent a physical volume overhang in Europe, $1,300/mt CFR India. Based on an average $75/mt freight
even if demand retreated. In the contract market values were from China to India, NE Asian sellers have a healthy margin.
reported at a Eur1,360/mt FD NWE level by the producers, In plant news, PTT shut its LLDPE plant June 5 to divert
while converters reported accepting Eur1,330-1,340/mt FD ethylene in an attempt to start up its new LDPE plant.
NWE. Gross values in the UK strengthened marginally this
week to GBP1,130-1,135/mt FD UK. Ineos’ plant at Latin America
Grangemouth was set to start up Friday from a brief shutdown. Brazilian LLDPE offers to Paraguay dropped $130/mt related to
The plant went down over the weekend due to a technical May, said a resin distributor. After the price reduction, LLDPE
glitch, a company source said. The plant was also set for Brazilian offers in Paraguay were at $1,620/mt CIF. A
scheduled maintenance of five weeks, starting in August. Paraguayan buyer said today they don’t see the necessity to buy
LLDPE this month since the Asian product they recently
United States purchased should be arriving soon. LLDPE Brazilian offers to
Persistently weak export demand pulled down LLDPE prices Andean Countries and Central America went down in June
again out of the US. There was a bifurcated export market $50/mt, said a source at Braskem. Resin offers from Brazil after
with deepsea prices talked at 47-48 cents/lb in railcars, the price reduction were heard at $1,430-1,490/mt CFR for
against traders working the Latin American market with butene and at $1,480-1,540/mt for hexene. US LLDPE film offer
values closer to 50 cents/lb in railcars. Even at 50 cents/lb to Peru was heard at $1,380/mt CFR. For the Brazilian domestic
for Latin America, there was little demand. Some converters market, June LLDPE offers were at the same May levels due to
were only interested in securing a container, about 18mt, as the fact that demand was still very healthy in the Brazilian
they did not want to build inventory while the market was domestic market and raw material prices just went down in the
falling. A producer said June would be a month of flux US and not in Europe. Brazilian ethylene contract prices
where buyers did not want to buy much and producers did typically follow the European contract prices movements with
not have much pressure to sell. Liquidity was expected to be a month lag. Braskem’s LLDPE offers in the Brazilian domestic
poor until there was more clarity on when the bottom of market were pegged at Reals 4,200/mt CIF for butene and
the market will be reached. Traders looked at integrated hexene. Mexican LLDPE offers dropped 4% compared to May
producers’ cost of ethylene from ethane still at around 23-24 because of lower international prices and slow demand, a
cents/lb and believed this gave makers plenty of room to source at state-owned Pemex said. “We saw some recovery
decrease prices instead of reducing operating rates. “Why during May, and we managed to close the month at 5% better
can’t they afford to sell at 45 cents/lb?,” a trader asked. But than in April. However, even though this was the case, demand
producers were content to build inventory and work to sell for PE in Mexico is still quite low,” said the company source.
more into the domestic market than reduce export offers. LLDPE, after the drop was being offered in Mexico at 57-59
Even if domestic prices fall 8 cents/lb as some participants cents/lb FOB Mexico City.
expected, producers would be better off selling domestically
in the high 50’s cents/lb than dropping export prices.
High-Density Polyethylene
Asia
The Asian linear low density polyethylene market pointed Europe
downward this week as Far East Asia saw prices ending at European contract values in injection grade have
$1,170/mt Wednesday, down $20/mt on the week, while strengthened this week on the back of confirmed June
Southeast Asian prices ended at $1,190/mt, dropping $35/mt business to Eur1,210-1,220/mt ($1,466/mt) FD NWE. The
on the week. South Asian prices fell $30/mt to $1,300/mt, increase in contract values mirrored the increase in
tracking the steep fall in Far East Asia prices last week. The feedstock ethylene for June, market sources said. Some
LLDPE market is weighed down by a seasonal lull period. producers reported achieving an increase of Eur20/mt in
Buyers were also anxious about the European debt problems June, with gross values at Eur1,220-1,230/mt FD NWE mark
and falling crude oil prices Monday. Buying sentiment was but this was not confirmed by converters at the time of
crushed Monday as LLDPE September futures on the Dalian press. Converters stressed that it was not an issue to source
Commodity Exchange dropped Yuan 495/mt ($72/mt) on injection grade, as imported alternatives started to appear in
the day to Yuan 9,415/mt, triggering a trading halt following the market. But spot values in injection grade remained
DCE’s 5% gain/loss limit. In response, several Chinese stable this week at a Eur1,070-1,075/mt FD NWE. Some
traders lowered offers to the Yuan 9,000/mt level ($1,058/mt sources said that the market was poised to soften as presence

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PLATTS POLYMERSCAN JUNE 9, 2010

of imports, mainly from Egypt, made buyers more reluctant inventory. Until prices reach a bottom, deals were likely to
to commit to current offers. Other sources disagreed, seeing be few, as neither traders nor converters want to take a risk.
currency still as a barrier to making the imported volume Producers, also do not want to chase the market lower as it
attractive. In blowmolding grade, producers contacted this hurts sentiment in the domestic market. Barring a hurricane
week continued to report increases of Eur10-20/mt versus in the USG or widespread plant outages in the US,
May, commenting on healthy demand and tighter participants expected June domestic prices to decrease. One
availability. Previous ethylene shortages left the inventory supplier expected June contracts to fall 8 cents/lb.
levels thinner, producers said. European spot ethylene values
were assessed lower since the end of last week at Eur915/mt Asia
FD NWE, with recent urgency to secure prompt volumes no YARN: Yarn grade fell $10/mt on the week to end at
longer evident in the market as availability has improved, $1,215/mt CFR Far East Asia and CFR Southeast Asia rolled
market sources said. Cracker reliability issues in the region over from last week as supply remains relatively tight. A
have mostly been resolved and with that the need to cover Chinese trader reported selling a small ex-warehouse parcel
prompt shorts has diminished, the sources said. Some selling Tuesday at Yuan 10,300/mt ($1,210/mt import-parity basis),
interest for June ethylene molecules was present in the market down Yuan 100/mt on the week. China’s Sinopec lowered its
but it has, so far, failed to attract incremental buyers. While ex-works price by Yuan 200 to Yuan 10,400/mt. INJ/BLMDG:
ethylene availability has improved, this was yet to be evident Wednesday, injection grade was down $45/mt to $1,125/mt
in all geographies, a producer said, still reporting issues to CFR FE Asia, down $50/mt to $1,115 CFR SE Asia and down
source ethylene for some of its HDPE assets this week. $35/mt to $1,165/mt CFR South Asia. Blow molding grade fell
Blowmolding buyers expressed mixed views on availability. $50/mt to $1,140/mt CFR FE Asia, dropping $30/mt to
Some converters reported struggling to secure additional $1,150/mt CFR SE Asia and falling $15/mt to $1,175/mt CFR
volume above agreed monthly allocations. Other converters South Asia. The drops were on poor buying sentiment and
reported seeing a balanced market, with no pressing high availability of both grades in the domestic Chinese
availability issues. Converters said that they hoped to reach a market and buyers were following the Far East Asian market
rollover, but were currently discussing a Eur10/mt increase. closely. In the Chinese domestic market, Sinopec offered ex-
Gross values were assessed marginally higher this week at works injection grade cargoes at Yuan 9,700/mt, up Yuan
Eur1,195-1,200/mt FD NWE, subject to change on further 900/mt on the week and rolled over its blow-molding price at
acceptance of increases from converters. Spot values in Yuan 9,400/mt. Chinese traders lowered blow-molding grade
blowmolding grade, however, remained stable this week. Film offers by about Yuan 450/mt to Yuan 8,800/mt ($1,034/mt
grade had different dynamics this week. Uni-modal film was import-parity basis) and several traders have reported selling
seen balanced, while bi-modal film was tighter, sources said, out injection grade. Blow molding grade was cheaper than
commenting on a widening gap between the two grades. injection grade in China, while it was the opposite in
Producers reported achieving a Eur10-30/mt increase in June Southeast Asia, reflecting the smaller dip for CFR SE Asia
values but feedback from converters was not yet conclusive. blow-molding grade. FILM: Film-grade fell again as market
Gross values in film grade remained stable as did spot prices. participants looked to the Chinese market for cues. CFR FE
In the UK market, gross prices remained stable this week, Asia prices fell $15/mt on the week to $1,125/mt, while CFR
market sources said. 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
United States fluctuating crude, falling ethylene spot prices and uncertain
Export prices fell across the board as demand weakened. stock markets, the Chinese market has high inventories of
Traders said it was hard to move any material at any price as Iranian-origin film. The most common 7000F-grade was heard
buyers expectations were for lower prices ahead. Blow being offered below $1,100/mt CFR China, but was not taken
molding was talked in a wide range. For traders looking at into assessment due to its embargoed nature and
deepsea markets, buy ideas were under 45 cents/lb delivered specifications. 7000F film has a melt flow index of
to Houston in railcars. For Latin America, buy ideas were at 0.04g/10min, below Platts methodology specifications of 0.07-
50 cents/lb in railcars, but for small quantities of a container 0.18g/10min. Reflecting the uncertain market, Sinopec
or two. “Whatever offer I make, a buyer will ask for a lower switched its ex-works price of Yuan 9,600/mt ($1,406/mt) into
price,” a trader said. Producers, however, were in no rush to a listed price system that refunds buyers the difference if the
open up spot offers to the market as they were either able to settled prices is lower. As a result of competitive prices, several
move large quantities quietly within their own system Asian producers have given the China market a miss for June
overseas or they were building inventory and content to sell allocations. Middle East cargoes were heard offered at below
at higher prices into the domestic market. The HDPE film $1,140/mt CFR China, while cargoes to South Asia were
market was also a mixed bag with traders saying converter offered about $1,200/mt CFR (L/C 60 days).
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 Latin America
commented. In this situation several traders said they A Brazilian resin distributor in Paraguay was offering HDPE
preferred to be on the sidelines and simply sell off their in June at $1,620/mt CIF for film and at $1,650/mt CIF for

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PLATTS POLYMERSCAN JUNE 9, 2010

blowmolding and injection. According to the seller, the for homo injection grade. “Supply is enough but you have to
Brazilian HDPE offers went down $130/mt related to May. A pay for it,” said a trader. In Turkey, open market spot prices
Paraguayan buyer said they should not buy HDPE this month remain weak, tracking the steady decline in feedstock values.
due to the fact that they were receiving the Asian product Offers and indicated traded levels were reported between
they bought last month. “We are worried with the constant $1,320-1,350/mt CFR Istanbul plus 3% duty “with most deals
drop in prices this month, and we will only buy the absolute done at the lower end of the range,” said one trader, adding he
minimum, possibly only LDPE,” said the buyer. The Brazilian expected prices to be on a gradual decline until next week. On
HDPE producer Braskem reduced offer prices to the Andean the production side, Sabic has delayed the lifting of a force
Pact and Central America by $50/mt. After the price majeure on PP supplies from its Geleen production unit in the
reduction, Brazilian offers were at $1,430-1,490/mt CFR for Netherlands, a source confirmed, adding the 550,000 mt/year
film, injection and blowmolding. HDPE US offer to Peru was unit is running at full capacity. LyondellBasell has resumed
heard this week at $1,380/mt CFR for film. Elsewhere on the operations and deliveries from its 400,000 mt/year Plock PP
West Coast, June deal prices between US and Colombia were production unit joint venture in Poland, but has maintained
pegged at $1,437/mt CFR for film and at $1,440/mt CFR for the force majeure imposed on PP supplies, a company source
blowmolding. On the production side, Dow’s three said last week.
polyethylene plants in Argentina were reported working at
90% of capacity. The plants have a combined capacity of United States
480,000 mt/year of LLDPE, and 300,000 my/year of HDPE. Domestic PP prices moved lower this week, tracing the
According to the source, the two HDPE and the LLDPE plants monomer contract that shed 8 cents/lb in June. US June
in Bahia Blanca, Argentina should be working at full capacity propylene contracts initially settled 8 cents/lb lower last
in 20 days. Dow’s cracker and polyethylene plants went on week, bringing polymer-grade propylene contracts to 55.50
emergency shutdown due to technical problems in April, and cents/lb and June chemical-grade propylene to 54 cents/lb,
they went back on line the first week of May. 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.
Polypropylene Random copolymer was talked higher at near 70 cents/lb
delivered this week. Sources characterized domestic demand
Europe as healthy this week. Many participants had run through
The assessment for June monthly Northwest European inventories and were looking to rebuild. “Orders are picking
polypropylene contract prices was talked higher again this week up in all segments,” said one seller. Meanwhile export values
although most producers eased on the Eur50/mt price hike were mostly stable this week as sources suggested the market
target they were aiming for at the start of the month. “Plus was still catching up after sellers dropped prices ahead of the
Eur50/mt is a hard target to reach. I think plus Eur30/mt is a fall in the US monomer contract. Prices were still workable
more accurate picture. I’ve done most contracts at that level,” a into some parts of Latin America but US prices were still too
European producer said. Several converters said they are now in high to work to other regions. The homo injection price was
a better position to resist any steep price increases amid easing assessed this week at $1,234-1256/mt FAS Houston while
supply constraints. With feedstock and Asian PP prices falling, copolymer was at $1,300-1,322/mt FAS Houston.
buyers said they are more convinced that a plus Eur50/mt rise
is no longer justified. “Markets are shifting to our favor,” a Asia
European converter said. “I won’t accept anything more than Prices slipped $20/mt in China/Northeast Asia from a week
plus Eur20/mt.” Several other converters said they will insist on ago, dipping $10/mt in Southeast Asia and $5/mt in the
a price rise of Eur25-30/mt for their June contracts. “I’ll Indian subcontinent. Except for India where trading
probably accept plus Eur30/mt. I’m not going to lose on this volumes have been relatively stable, demand continued to
one,” said a UK buyer. Demand remains firm, with one major suffer in China and Southeast Asia as converters and traders
producer citing a “shoot up” in orders from the caps and de-stocked amid worries about the fragile state of the global
closures sector. June is shaping up to be the “best month” so far financial markets and economies. Global headlines featuring
this year, the producer said, adding that the bulk of his the term “double-dip recession” put market participants in a
contracts were concluded within the plus Eur30-40/mt range state of unease, also shaking up global consumer confidence.
with “nothing below that.” Market sources said supply seems to Market participants were also expecting a boost in China’s
be in balance with demand at the moment as production units PP production within weeks when the state-owned Sinopec
previously offline come on stream. “The critical point of supply brings online a new PP plant in Zhenhai in Zhejiang
availability is over. There’s no panic anymore,” said a trader. He province. Built by subsidiary Sinopec Zhenhai Refining &
added falling Asian prices are also giving consumers the option Chemical Co., the unit will be able to turn out 300,000
to buy cheaper materials from overseas. European producers mt/year of the plastic resin. Borouge’s 800,000 mt/year PP
said their capacities are fully committed to their customers and plant in Ruwais, Abu Dhabi, is expected to begin test runs
not offering spot materials. In the spot market, offers and between July and August. Borouge plans to sell about 40% of
reported deals were within a range of Eur1,280-1,310 FD NWE the plant’s output to Asia. On Wednesday, raffia offers at

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PLATTS POLYMERSCAN JUNE 9, 2010

$1,220-1,230/mt CFR China had become commonplace and share this view of the market, which continued to be
attracted no buyers. Buying interest dropped to $1,070- fundamentally tight and had emerged from planned and
1,080/mt at best. Southeast Asia’s raffia market centered unplanned shutdowns during May. While nearly all plants
around $1,230/mt CFR. India’s prices were supported by were reported to be producing at the highest possible rates,
demand for raffia bags for wheat crops, sparked by a shortage Dow was not available to confirm if its Schkopau, Germany site
of jute and jute bags. IPP and BOPP commanded a $55/mt had returned to production after a maintenance outage which
premium over raffia in China, with the premiums slightly was due to conclude Tuesday. Despite the higher production
lower at $45/mt in SE Asia and the Indian subcontinent. rates, producers said they still expected to be sold out around
Block copol fetched a $140/mt premium over raffia in China, mid-month. This was due principally to the lack of imported
with premiums seen at $130/mt and $125/mt in SE Asia and material in the continental market but also because June is
the Indian subcontinent, respectively. Propylene closed effectively the peak month for polystyrene demand in the
Wednesday at $1,065/mt FOB Korea and $1,100/mt CFR European calendar. Orders for extruded polystyrene, used for
China, down $20/mt over the past week. Raffia PP margins insulation in the construction industry, were particularly
were negative by $50/mt Wednesday, based on a monomer- strong, several sources noted with demand even in southern
to-polymer conversion cost of $150/mt. To break even, a PP and eastern Europe showing an improvement. The same was
producer in Asia would have needed to price its raffia cargoes true of expanded polystyrene, sources said. With the weak euro
at at least $1,250/mt CFR China, or $150/mt above the price continuing to fend off imports from Asia, producers were facing
of propylene on a CFR China basis. overwhelming demand and thus able to negotiate for
continuing higher prices. Under recent European Union
Latin America directives, newly built houses must have ever-increasing
Some buyers in Paraguay said they were waiting this week amounts of insulation. With only about 10% of the continent’s
for the Brazilian offers for June purchase. The Brazilian housing stock already insulated, sellers of both XPS and EPS
polypropylene producer Braskem said resin offer prices for expect demand to continue organically in both the short and
June to Mercosur went down $100/mt. Following the offer long term. While one producer reported settling some business
price reduction, PP offers from Brazil to Argentina were at a decrease of Eur35/mt compared to last month, others said
heard at $1,800-1,900/mt CFR homo raffia, injection and they saw the likely outcome of monthly negotiations at
film, $1,900-2,000/mt CFR for co-polymer impact and at between minus Eur30/mt an Eur40/mt. However, other
$1,970-2,070/mt CFR for random. June Brazilian PP offers to producers said they would try to maintain prices as close to a
Uruguay, Paraguay and Bolivia were heard at $1,700- rollover price as possible. “Our customers don’t want a decrease
1,800/mt CFR for homo raffia, injection and film and at yet, because they are still passing on increases to their
$1,800-1,900/mt CFR for random. For the Brazilian domestic customers,” one said. Another said customers were already
market, Braskem announced flat polypropylene offers in taking material at a rollover price and saw no need to go down.
June related to May, and they were heard at Reals 4,200/mt However, buyers saw the price proposal as a signal to negotiate
CIF for homo raffia, Reals 4,400/mt CIF for homo film and lower prices. While none were aiming for the full Eur73/mt,
injection and at Reals 4,500/mt CIF for co-polymer. June one converter said it would hold out for a Eur50/mt fall, adding
Brazilian offers to Peru dropped $100/mt, said a source at raw material fluctuations had distorted the true market value. A
Braskem this week. After the offer price reduction, Brazil was second said he expected to end with a decrease of Eur40/mt.
offering PP in Peru at $1,430-1,500/mt CFR for homo film, Considering the information received, the FD NWE market was
injection and raffia, $1,480-1,550/mt CFR for co-polymer assessed down a further Eur10/mt, making a total decline of
impact and at $1,530-1,600/mt CFR for random. A buyer in Eur25/mt from May. In the spot market, traders reported some
Peru said Colombia started the month with similar offers at “aggressive sellers” offering European-produced material as low
$1,510/mt CFR for homo, $1,640/mt for co-polymer and at as Eur1,200/mt FD Med. At the same time, Asian material was
$1,580/mt CFR for co-polymer impact. In Peru the sellers reported landing in Turkey as cheap as $1,300/mt excluding
said demand is very slow at the moment due to the fact that 6.5% duty. Considering the fall in SM spot prices and this
the buyers should be waiting for another drop in prices.US information, the spot market was assessed Eur30/mt lower,
imports to Peru were heard at $1,430-1,440/mt CFR. 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
Polystyrene increase. Outright prices were reported in line with last week’s
assessment, which remained unchanged.
Europe
Following the settlement of the NWE styrene barge contract at United States
a decline of Eur73/mt ($87/mt) from May, producers were The US polystyrene price was assessed lower again this week
mixed in their responses. BASF was the only one to officially as feedstock styrene prices continue to fall. “We’ve seen a
announce its pricing intentions this month, signaling that it reduction [in prices],” one source said. “More in crystal than
would lower its June-delivered general purpose polystyrene HIPS. The prices have fallen 5 to 6 cents for crystal, but
price by Eur35/mt. Other producers, however, said they did not maybe 3 cents for HIPS.” High butadiene prices continued to

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PLATTS POLYMERSCAN JUNE 9, 2010

support a larger than normal high-impact premium over Acrylonitrile Butadiene Styrene
general purpose, sources said. “The delta is up to about 7
cents,” a source said. The general purpose price this week Europe
was assessed at $1,450/mt, down $180 from last week. The Acrylonitrile-butadiene-styrene market sources in Europe said
high-impact price was assessed at $1,605/mt FOB USG, they continued to see prices flat in June compared to May as
down $135 from last week. The delivered price for general falling styrene and acrylonitrile prices were offset by a forecast
purpose material fell to 67 cents/lb, while the high-impact increase for third quarter butadiene. At the same time, the
price was at 74 cents/lb. The primary cause of the price cut continued absence of imported material from Asia meant that
was falling styrene prices. The US styrene price was assessed there was no pressure for producers to lose margin and reduce
this week just above 50 cents/lb, down more than 10 cents prices. “There is so little material available that producers can
from a month ago. Sources said there was a chance the price keep their prices,” one buyer said, adding that he had been
could fall even further, if demand from Europe is unable to buying at a rollover from May. One producer echoed the
sustain a potential arbitrage opportunity from the US. sentiment saying that customers who had pushed for a
reduction had done so with little conviction. Looking into the
Asia third quarter, despite last week’s fall in the butadiene spot price
GPPS: Asian prices have come under renewed downward as units returned from outages, sources said they would expect
pressure on delayed re-stocking by traders and end-users as an a third quarter settlement between Eur1,400-Eur1,450/mt FD
uncertain outlook over the global economic recovery NWE ($1,680-$1,740/mt) compared to the second quarter
shadowed market sentiment. Asian prices ended lower, losing figure of Eur1,275/mt FD NWE. At the same time, one source
$10/mt to rest at $1,195/mt in line with weaker feedstock said he forecast styrene monomer would rebound next month.
styrene prices, which softened by $14.70/mt after averaging Finally, acrylonitrile was expected to fall further in the coming
$1,069.70/mt CFR China over June 3-9 versus $1,084.40/mt weeks, sources said, while the European price was still about
the week earlier. Buyers were maintaining a wait-and-see $85/mt cheaper than the comparative Far East price. However,
attitude in anticipation of prices trending down over June and ABS pricing in Asia was seen moving lower this week, and the
July. Kumho and Hong Kong-based traders were maintaining assessed mid-point of $1,880/mt CFR China was close to a level
offers at $1,280/mt CFR China/Hong Kong (including the where imports would be viable, one source said, calculating the
$12/mt terminal-handling charge), although buyers were not equivalent FD NWE price at around Eur1,750/mt. “It could
keen on spot cargoes. Converters have started cutting arrive competitively but there is no margin for the exporter,”
purchasing volumes in anticipation of reduced export orders, he said. The risk factor would be heightened by continued
and end-users are limiting their requirements to contract volatility in the euro exchange rate. In fact, Asian exports were
cargoes, as the total demand for their products is slowing. In still far more likely to end up in the US, or other dollar-
Southeast Asia, Denka was offering H2 June-delivery cargoes at denominated markets before Europe, he added. With market
$1,300/mt, although no bids or buying interest were reported players seeing the contract price at a rollover, the assessment
for the spot cargoes. In the domestic Chinese market, 30-50 mt was unchanged this week. The spot market was assessed down,
parcels were traded between Yuan 9,800-10,000/mt ($1,152- however, pulled by the lower Asian assessments.
1,175/mt import-parity basis) over the week. Run rates by
Asian producers continue to be maintained at 70-80% of United States
capacity, although rate cuts are anticipated if demand does not The US ABS price fell slightly this week as two of the three
improve by the end of June. HIPS: Prices in both Northeast major feedstocks fell. But the price remained well above
and Southeast Asia fell by $5/mt to settle at $1,320/mt $1/lb as butadiene remained tight. The ABS price was
Wednesday. Buying interest for HIPS continued to be dismal assessed at 113 cents/lb this week, down 3 cents from last
even as lower offers of $1,388/mt CFR China/Hong Kong week. The US styrene price fell into the mid-50s cents/lb,
(excluding the $12/mt THC) were unsuccessful in attracting softened by a drop in benzene and ethylene spot values. The
firm bids or buying indications. Following the recent upheaval styrene price has fallen more than 10 cents during the past
resulting from the eurodebt crisis, concerns abound on news month. There also was some slight softening in the ACN
that China’s economic growth may slip to between 10-11% in price, though ACN supplies were expected to remain tight
the second quarter as industrial production and investment through the end of July and perhaps into August. ABS was
expanded at a slower-than-expected pace. As converters have able to get ample support from butadiene. A shortage of
started cutting buying volumes in anticipation of reduced crude C4, as well as the inability to unload some imported
orders, and with HIPS being offering in the domestic Chinese butadiene, kept butadiene supplies tight, sources said.
market at Yuan 11,200-11,300/mt ($1,316-1,328/mt import-
parity basis), end-users were heard preferring to buy smaller Asia
30-50 mt cargoes on a hand-to-mouth basis. Traders, Asia’s acrylonitrile-butadiene-styrene prices have come under
meanwhile, have abstained from further restocking of cargoes renewed downward pressure on delayed re-stocking by traders
at current offer prices as it is not commercially viable to and end-users as the uncertain outlook over the global
purchase higher price CFR China cargoes and resell them economic recovery shadows market sentiment. Both CFR
based on current domestic prices. China and CFR Southeast Asia prices headed south, losing

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PLATTS POLYMERSCAN JUNE 9, 2010

$15/mt on the week to rest at $1,880/mt on weaker feedstock above budget in June. I am hoping for a fall in the June PET
prices. According to a South Korean producer, sales volumes in contract price.” UK spot prices were meanwhile said to be
June slipped by as much as 30% from levels in May, as around or just below GBP1,000/mt ($1,458/mt) FD UK, with
converters have started cutting purchasing volumes in the May net contract price understood to have been settled at
anticipation of reduced export orders. Meanwhile, with ABS in the same level. This contrasted sharply to trader sentiment in
the domestic Chinese market being offered at Yuan 15,600- NWE, with one source saying they were expecting June to be “a
15,800/mt ($1,833-1,856/mt import-parity basis), end-users quiet month in general” as spot reports slipped below
were heard buying 50-100 mt cargoes on a hand-to-mouth Eur1,200/mt($1,445/mt) FD NWE to a range of Eur1,150-
basis. Market participants continued to remain on the sidelines, 1,180/mt. “Customers are on the sidelines analysing their stock
in anticipation of prices trending down over June and July. situation. Some feel the price will go down, others say it is just
Offers from producers and traders were heard at $1,938/mt CFR a quiet period and that customers will soon return,” the trader
China/Hong Kong (excluding the $12/mt terminal-handling said. “Antidumping has not had an impact for the time
charge), but buyers were not heard to be interested in stepping being...It has been a week of rumors. Customers are looking to
into the market. A Korean producer said that under the push down prices and demand is a little quiet at the moment.
circumstances it remained unviable for resellers to purchase We will have to wait and see what happens next month.” A
CFR China cargoes and resell them under current domestic second trader agreed with the lower price indication, saying
prices. End-users are limiting their requirements to contractual that some Eastern European producers were “even looking at
volumes, with very limited interest seen for spot cargoes, as the Eur1,120-1,130/mt FD NWE.” “The range is difficult to define,
total demand for their products is slowing. Market participants but I would say around Eur1,150-1,180/mt FD NWE...the gap
pointed to the volatile feedstock markets. Main feedstock was quite big [between the contract and spot price] in May, but
styrene, which makes up 60% of ABS costs, continued to soften now it is narrowing,” the source said. “Demand is not where it
by $14.70/mt after averaging $1,069.70/mt CFR China over should be. People expected the market to be short as a result of
June 3-9 versus $1,084.40/mt the week earlier. Acrylonitrile, antidumping, but it has been too cold so far [to encourage
which makes up 25% of ABS costs, fell by $25/mt at $2,425/mt demand]. There may be some impact in July and from the
CFR Far East Asia on June 8. Butadiene, which constitutes 15% World Cup, especially if we have temperatures like 30-35
of ABS costs, fell $31 to $2,049/mt CFR China on June 4. degrees, as we did during the last one.” This suggested a third
Taking a weighted average of all three key feedstocks, and consecutive week of falls from a May high of Eur1,260/mt FD
factoring in a minimum conversion cost of $220/mt, the break- NWE, with a nine-day turnaround at Indorama’s PET plant
even cost was calculated at $1,775/mt versus $1,795/mt last from Thursday unlikely to impact significantly on prices. A
week. While ABS was assessed $15/mt lower at $1,880/mt, the source at La Seda de Barcelona said the second line at its El Prat
margin widened by $5/mt to $105/mt this week. 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
Polyethylene Terephthalate contract price reported around Eur1,170-1,230/mt FD NWE.
“Raw materials have settled down representing a drop-off of
Europe about Eur30/mt in PET. Our aspirations were for a Eur20/mt
Demand for polyethylene terephthalate in the UK was holding increase, but it’s now a difficult exercise to get any increase at
firm in contrast to the rest of Northwest Europe this week, all,” a producer said. “We should be happy with a rollover
where less favourable spring weather conditions have seen situation...we already achieved some increases before the raws
consumption fall short of expectations, sources said Tuesday. settled, so there is some arm-wrestling starting to happen.
“UK resin demand is holding up compared to other markets, Customers never expected month-on-month increases and now
there has been better weather there. It’s worse in Germany and they want something back.” He added sellers need to “step
Eastern Europe, even in Switzerland to a certain extent,” a cautiously, [the] tide could turn.” “Soft drink demand has
producer said. “There is a lot of stockpiling in Europe, people improved a little with [European] holidays, but supermarkets
are holding back at the moment. Benelux starts its summer are sitting on a lot of preform stock, and not turning over,” he
break in July, and with a bit more heat we could see demand said. A second producer said the market was unlikely to see any
pick up for another month or so...we do expect margin import material in the coming month but added the market
retention at the least.” A UK consumer agreed with the was tight with customers “trying to find alternative sources.”
sentiment, saying that market conditions had been quieter in “We will improve our margins [in June]. We are sold out in
mainland Europe. He added that end-user demand in the UK most plants...the only one not yet sold out is Italy. It will be a
was now increasing as the weather improved, although up until rollover for June, which will cover the margin increase,” he
recently it had been “somewhat disappointing”. “We expect a said. In production news, Lotte Chemical UK declared force
busy month ahead. The market has been variable on the quiet majeure at its 500,000 mt/year Wilton PTA plant on June 3,
side...the first sign of prices falling came from the mainland, with the outage expected to last 7-10 days and result in a loss
and people there are trying to be hopeful and prevent the same of 15,000 mt of material, according to a company source. He
from happening in the UK,” he said. “In April the juice market added that the outage was expected to impact on Europe, with
was very quiet. Now it has picked up and we expect to be Lotte UK unable to offer its usual volumes for the spot market.

Copyright © 2010, The McGraw Hill Companies 11


PLATTS POLYMERSCAN JUNE 9, 2010

US while FOB Southeast Asia prices remained stable at $1,230/mt.


Domestic PET prices in the US were already down 2 cents/lb in Demand for Southeast Asian parcels was stronger as South Asia
June from Eastman and Wellman announcements, but experiences an unusually hot summer. PET bottle chips were
participants believed contracts would be down more than that strong in North Africa, where market sources say demand could
given an estimated 4.8 cents/lb decrease in costs. June’s PX be pushed up by the hot season and the Fifa World Cup being
contract had not yet settled but if the US follows Asia, the held in Africa next month. “Most producers in the region are
contract would decrease 5.44 cents/lb. MEG contracts were not in a hurry to sell now,” explained a Southeast Asian
already concluded down 5 cents/lb in June. Producers were producer. A deal was heard concluded at $1,230/mt FOB
fighting to gain margin in June by cutting resin prices less than Malaysia to the Middle East for a 200 mt cargo. Another
feedstock drops, but it was questionable whether this strategy Southeast Asian producer even raised its offer price by $10/mt
would work. Demand was said to be firm from bottlers on the week and managed to sell parcels to South Asia at
continuing to gear up for the summer beverage season. There $1,240/mt FOB Thailand. Further east, PET bottle chip prices
was also a reported uptick in beverage demand already from could not hold as well as sellers had expected from last week.
the single serve market. Supply, however, was more than ample This was due to depressed buying sentiment that carried over
despite the lack of spot imports. Imports were heard to be from last week on weak crude prices late last week to early
supplanted by increased domestic production as AlphaPET week. Despite the seasonal demand period, buyers were also
started up the second half of its 430 kt/year PET plant in tracking feedstock prices, which have been on a steady decline
Decatur, Alabama, earlier in May. One importer believed the in recent weeks. This is in line with the lull in the polyester
AlphaPET’s plant would “effectively kill the import trade.” market that shares the same feedstocks as PET bottle chips.
Import offers were talked at 62 cents/lb DDP West Coast, Upstream, feedstock PTA was down $28/mt on the week to
which, assuming the cargo arrives in June would be on par $830/mt Wednesday and monoethylene glycol was at $708/mt,
with some medium sized domestic contracts. A more likely down $30/mt. This forced producers to lower prices as they
scenario was that imports would not arrive until July and no hope to cash in before the peak season ends after June. Last
converter wanted to take a chance on imports so far out, week, the European Commission announced prohibitive duties
considering domestic prices could fall again next month. MEG on PET bottle chip imports from the United Arab Emirates,
contracts already had pressure to fall following the $120/mt Pakistan and Iran. Parcels from these countries are slapped with
decrease in Sabic’s Asia Contract Price nomination. “Converters countervailing duties of Eur42.34/mt, Eur83.64/mt and
will say, come back to me in 5 weeks and ask me if I want to Eur142.97/mt, respectively. UAE-origin cargoes attract an
buy at the price you are offering today,” a trader said. “No one additional antidumping duty of Eur54.80/mt, bringing total
knows what the price (domestic) will be then,” the source duties to Eur97.14/mt. The tariffs were designed to prevent
added,”and no imports can get done.” sellers from these countries from underselling into the EU.
However, these duties did not excite Asian producers. “It would
Asia have been helpful for us if it was introduced in April,” a South
Northeast Asian prices saw another week of decline on bearish Korean producer said. The euro slid further against the US
sentiments on crude oil price fluctuations and continued dollar this week, making arbitrage between Asia and Europe less
concerns over the eurozone debt problem. Prices on a FOB attractive. In Northwestern Europe, PET bottle grade was last
Northeast Asia basis fell $20/mt on the week to $1,180/mt, assessed at Eur1,225/mt FD NWE ($1,466/mt).

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Copyright © 2010, The McGraw Hill Companies 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 JUNE 9, 2010

Ethylene propane in early June pushed the price ratio quickly up to a


last published level of 97.4%.
Europe
European spot ethylene values were assessed lower Friday at United States
Eur915/mt ($1,099/mt) FD NWE, with recent urgency to Spot ethylene values in the US continued to slide this week,
secure prompt volumes no longer evident in the market as falling to an 8-month low according to Platts data on
availability has improved, market sources said. Cracker improved supply. Early week activity was thin however
reliability issues in the region have mostly been resolved and prices dropped Thursday as spot ethylene traded three times.
with that the need to cover prompt shorts has diminished, June was heard traded at 35 cents/lb MtB Wms and
the sources said. There was modest incremental buying consequently at 34.50 cents/lb MtB Wms. The market was
interest in the market for June, although buyers appeared to backwardated into July and late in the day, sources reported
be hesitant to commit this week. Some selling interest for a July deal at 32.875 cents/lb MtB Wms. Friday morning
June molecules was present in the market but it has, so far, June was seen bid at 31 cents/lb MtB Wms while July was
failed to attract incremental buyers. The market has been seen offered at 32.875 cents/lb MtB Wms against bids at
severely backwardated of late, but with improved availability 32.50 cents/lb MtB Wms. At market close Friday, two July
some steam has begun to come off the prompt market, deals were heard at 32.50 cents/lb MtB Wms. Price erosion
flattening the backwardation. Spot values were heard at a was not confined strictly to the spot market though as May
Eur900-930/mt FD NWE bid-offer range through Friday. US ethylene contracts settled 7.75 cents lower this week at
Ethylene producers said that, while availability has 44.75 cents/lb. The April contract was at 52.50 cents/lb.
improved, core contractual demand remains healthy, Despite the falling prices though, steam cracker operators
supporting near maximum utilization rates at steam crackers. were still enjoying decent margins from ethane and E/P mix
“The demand is holding, we are running at maximum rates, at 9.35 and 12.88 cents/lb, respectively. In production, Dow
even though availability has improved,” an ethylene was expected to restart its 1.1 billion lbs/year LHC 2 steam
producer said. “We are not in a hurry to sell at lower prices, cracker at Plaquemine, Louisiana, in mid-June, sources said.
we are not pushing the volume out, we would still prefer to
adjust the output down by 1%,” a second ethylene seller Latin America
said. Ethylene buyers agreed that, while the market has not June ethylene contracts for the Brazilian domestic market saw a
tilted in balance as yet and is not overwhelmingly long, decrease of 8% to $1,215/mt FOB. In Reals, the CP in Brazil fell
availability has improved. With healthy contract and spot 5%. Usually, Brazilian ethylene contract follows the European
cracker margins and a better-balanced market, a prompt price movement with a month lag. In order to be more
tonne commands less of a premium now. Platts spot cracker competitive in the international market, polyethylene Brazilian
margins were assessed at Eur164/mt Thursday, while contract offers for the Mercosur (Paraguay and Uruguay) dropped $50 in
cracker margins for June have so far averaged Eur187/mt. June, said a source at Braskem this week. June Brazilian PE
Ethylene buyers have also said there has been some selling offers to Paraguay and Uruguay were heard this week at $1,700-
interest from the Middle East and Iran in the market for mid- 1,750/mt CFR butene, $1,710-1,760/mt CFR hexene, $1,750-
June loading. Coastal ethylene values have fallen 1,800/mt CFR for LDPE film and $1,700-1,750/mt CFR for
prominently as well Friday to $1,066/mt CIF NWE, impacted HDPE blowmolding, film and injection. LLDPE and HDPE
by lower bids in Europe and weaker Asia. In Asia, ethylene Brazilian offers to Chile went down $100-120/mt to $1,500-
values continued to descend Friday. The prices basis CFR SEA 1,550/mt CFR for butene, $1,550-1,600/mt CFR hexene and at
collapsed $114/mt on the week Friday to settle at $901/mt. $1,500-1,550/mt CFR for HDPE film, injection and
Market sentiment remained weak throughout the week amid blowmolding. For Argentina, PE Brazilian offers were at the
rising supplies from Middle East countries, such as Iran, same levels compared to May. “We are going to try to work flat
Qatar and the United Arab Emirates. In European production prices in Argentina at the beginning of the month, but possibly
news, Dow Europe’s steam cracker at Bohlen, Germany has we are going to have to apply some offer price reduction as
restarted after a maintenance outage, a company source said. well,” said the source. Brazilian offers to Argentina in June were
“The cracker has restarted mid-week. It is producing on-spec at $1,800-1,850/mt CFR butene, at $1,860-1,910/mt CFR
ethylene. It is quickly ramping up,” he said. In upstream hexene, $2,030-2,080/mt CFR for LDPE film.
news, the spot price of delivered North Sea propane cargoes
has started to approach parity with the delivered price of Asia
naphtha, according to industry sources. According to sources, NEA: The CFR Northeast Asia ethylene price benchmark
the current strength of North Sea propane is due to a dived $89/mt on the week to settle at $931/mt, as the
combination of fairly tight availability, exports being moved market continued to be hit by heavy supplies and weak spot
out of the area and healthy non-petchem buying interest. demand. Traders reduced offers gradually to $950/mt CFR
Any surplus North Sea propane during the summer months NEA later this week from $1,000/mt reported earlier this
is traditionally used as an alternative to naphtha by week. A 3,000 mt deal was reported to have been done at
petrochemicals but at a price discount equivalent to $930/mt CFR China for mid-July delivery. Due to the
approximately 90% of the CIF naphtha price. The strength of persisting plunge in the Northeast Asia ethylene market on

Copyright © 2010, The McGraw Hill Companies 14


PLATTS POLYMERSCAN JUNE 9, 2010

stable naphtha feedstock prices, negative margins widened $727/mt. Buyers have pulled back on purchasing MEG as the
further this week. Late Friday, negative NEA cracking margins polyester industry enters a lull after the high demand season
widened to minus $98.6/mt compared with minus $25.25/mt between March and April ahead of summer. This has seen
Monday, which prompted speculations that naphtha-fed consumers looking to ensure parity with the Asian market,
steam cracker operators will start reducing operations. For although some producers remain eager to maintain or even
example, Taiwan’s Formosa is considering reducing steam improve margins following an increase of Eur10/mt in the
cracker operations amid negative margins. No steam cracker upstream June ethylene CP. Spot prices were understood to
operators have started reducing run rates, but the speculation have held steady over the week, with little change observed
at least supported the NEA market just above $900/mt. in the way of steady demand from downstream PET. A source
However, some market sources said NEA cracker operators said the truck price was “still around Eur740-750/mt FCA
needed to keep running at 100% capacity in June as they NWE,” with levels steady due to the firm ethylene
already purchased naphtha for the month. Meanwhile, the movement. “Everything is proceeding within expectations.
prices basis FOB Korea slid $80/mt on the week in tandem The CP settled down with Asia and the weak exchange rate.
with a falling CFR NEA market. A bid was reported at $900/mt The market is balanced, there are some producers in
FOB Taiwan, but the bid was rejected by producers. No deals shutdown, but these were planned so there should be no
were reported on an FOB Korea basis this week. SEA: The influence on the spot price,” the source said. In PET, Asian
prices basis CFR SEA collapsed $114/mt on the week Friday to prices have fallen from an April high of $1,300/mt FOB, with
settle at $901/mt. The market sentiment remained weak the price now assessed as low as $1,218/mt FOB NEA as
throughout the week amid rising supplies from the Middle buyers seek to secure cheaper cargoes amid falling PET
East, such as Iran, Qatar and the United Arab Emirates. UAE’s feedstock prices, despite firm seasonal demand. This saw
Borouge issued tenders to sell two spot cargoes this week. The sentiment similarly weak in Europe, although the overall
first 5,000 mt cargo is scheduled to be loaded in the middle of tightness of the market appears sufficient to maintain prices.
June, while the second 5,000 mt is for the end of June. The The NWE PET market finally received clarity on the Middle
tender was canceled Friday due to a lack of participation, Eastern antidumping issue, after the European Commission
which dampened the market sentiment further this week. announced prohibitive duties on bottle-grade imports from
Early Friday, a 2,500-3,500 mt spot cargo was transacted at the United Arab Emirates, Pakistan and Iran, according to a
$900/mt CFR Indonesia for any-July arrival. 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
Ethylene Glycol imposed on the UAE of Eur42.34/mt, Eur83.64/mt on
Pakistan and Eur142.97/mt on Iran. A producer said
Europe antidumping measures would pave the way for further
The June NWE monoethylene glycol contract price was fully increases in Northwest Europe, where prices have risen
settled at Eur820/mt ($994/mt) FD NWE this week, a decrease steadily by Eur400/mt since November 4, 2009 to a high of
of Eur36/mt on the May price of Eur856/mt, according to Eur1,260/mt FD NEW on May 5. However, on Tuesday a
market sources. The initial settlement was confirmed by a trader said signs of weakness were emerging, with the spot
source at producer Ineos, who said he had settled with two of range now seen at Eur1,180-1,230/mt FD NWE. The source
his customers. Consumer M&G Group also later confirmed added it was not so much a decrease, however, but an effect
following an initial agreement between Shell and consumer of sellers “reducing stocks and supporting regular customers.”
Indorama. By Friday BASF was understood to have also
settled the price with a consumer, although this could not be United States
confirmed directly. “We settled at Eur820/mt FD NWE. The Contract prices fell 5 cents/lb and with lower costs in the US
fall was driven by Asian spot price and contract further cuts were possible in July. As usual, however, US
nominations,” a source at Shell said Tuesday. A consumer prices will depend on the stability of the Asia market. Since
said that given recent falls in the Asian markets, the there are US contracts based on the Asia Contract Price,
settlement seemed “on the higher side” but added that participants kept a close watch on China to see if the spread
“taking into account ethylene and the exchange rate it is a between spot and ACP widens. June ACP’s were at $960-
reasonable compromise.” “Europe is no different to the other 970/mt, but the spot market in China was just under
regions, it is not separate from the rest of the world. MEG is $$730/mt which was a wide enough spread to pull down
soft everywhere. In Europe there are a number of planned contract nominations in July and US-related contracts with
turnarounds, but demand has taken producers by surprise, so them. As MEGlobal tends to move its North American
the market is balanced,” the source said. Another consumer benchmark in sympathy with the ACP’s, the other primary
said he was trying to follow the initial settlement with contract mechanism was also likely to drop. MEGlobal’s June
another producer, but expressed doubts for a prompt North American benchmark was at 48 cents/lb, less 15%
agreement as the seller “thinks it’s too low a price.” In recent discount for large volume buyers, putting these contracts at
weeks Asian spot prices have fallen from an April high of just over 40 cents/lb. Spot export traders were kept on the
$947/mt CFR China, to the current assessed price of sidelines with the arbitrage window to Asia and Europe

Copyright © 2010, The McGraw Hill Companies 15


PLATTS POLYMERSCAN JUNE 9, 2010

closed. Considering CFR China prices at about $727/mt, FOB for the coming weeks. In plant news, South Korea’s Honam
USG values would have to be at least $100/mt under that for Petrochemical shut its 160,000 mt/year MEG plant in Yeosu on
an export to be viable. But at $627/mt or 28 cents/lb, it was Tuesday. It kept its 250,000 mt/year MEG plant at Daesan shut
not an attractive price for producers. Spot ethylene would longer than its scheduled turnaround on poor margins.
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 Propylene
had seen tremendous demand from clean up efforts in the
USG from BP Macando oil spill. This demand was said to Europe
have ended, however, and a source commented that many Spot free delivered propylene prices for Northwest Europe
cars had even been turned away at the last minute which headed further south this week as buying interest waned, with
were then sold at distressed prices as there was a question most market sources describing their inventories and positions
about the specs of the glycol. The on-spec truck and railcar as balanced. On Friday, two traders reported having done spot
market was talked in the mid-40’s cents/lb. Demand from the deals at around Eur1,000/mt ($1,120/mt) FD NWE for polymer
anti-freeze segment was relatively slow as it was the off- grade parcels in inland Europe. On the coast, one trader said he
season for blenders, but PET makers continued to run hard at had heard prices at around Eur950-960/mt for PGP. “Molecules
about 90% operating rates with the peak bottle making are becoming more accessible,” he added. Continued plant
season still underway. There was also producer demand in outages in Germany are still impacting supply availability and
the US with MEGlobal on sales control and under most industry players agreed that positions were “balanced to
turnaround in Prentiss, Canada through June. short” inland and “balanced to long” on the coast. The spot
market was generally quiet, with most producers saying their
Asia production units are working “flat out” to fulfil their
Asian monoethylene glycol prices continued to take a beating contractual obligations and have no spare output to offer. But
this week as they dropped $18/mt from last week to end at the market remains in “delicate balance” and supply could
$727/mt CFR North East Asia. Buyers have started to pull back easily tighten again if another cracker suffered an unplanned
on buying MEG as the polyester industry enters a lull after the shutdown, sources said. Demand remained healthy, although
high demand season between March and April ahead of orders are certainly slower than what the market saw in April
summer. While PET bottle chips were still in good demand, this and early parts of May, according to European producers and
represents only a small buying share in the MEG market. buyers, adding spot PGP prices are moving to slightly below
Buyers in China also remained cautious, tracking the local stock contract levels. One seller said it was struggling to offload
markets, which failed to rebound in tandem with other global materials in the coast and the offers received were “ridiculously
markets. The slow buying sentiment was further magnified by low.” “We didn’t really get outright buyers for June PGP. CGP is
ethylene prices that dropped $89/mt to $931/mt CFR North even worse, not a single buyer in Europe that we can find right
East Asia. This means that the theoretical cost price for MEG now,” a producer said, adding that recent imports have beefed
stands at $679/mt. However, industry sources say this is not up supply and are weighing down on coastal prices. One trader
necessarily the actual cost price due to feedstock supplied on said that imports are causing a “temporary overflow” in the
contract basis. High inventory in eastern Chinese tanks coast. A South-American olefins producer said it had sold a
continues to cast a shadow over the market there as MEG cargo of 6,000 mt last week for early July arrival in Europe, and
buyers find it hard to find space until the end of June. The is also looking for buyers for another 5,000-6,000 mt. “It seems
other fiber intermediate purified terephthalic acid remained no one wants it in Europe at the moment,” the source said, and
depressed after rebounding briefly Monday to $885/mt CFR was looking now to buyers in Asia. A UK producer said that
China, up $25/mt from last Friday. By Friday, PTA spot prices any weakness in values will be gradual and temporary. “Prices
were down to $857/mt CFR China. Similarly, PTA September are coming off slightly but not bombing. There’s no reason for
futures on the Zhengzhou Commodity Exchange were down that at all,” he said, commenting that speculators may be
Yuan 218/mt ($32/mt) on the week to close at Yuan 7,386/mt trying to talk down prices because of the decline in propylene
Friday. These movements in PTA have put further pressure on prices in Asia, the volatility in ethylene and energy values and
the MEG market. On the other hand, sellers were unwilling to as production capacity slowly come back on stream. On
settle at the constantly lowering bids, on firmer crude prices Thursday, BPRP, the German petrochemicals arm of BP, lifted
this week. Late week, few deals were heard as buyers and sellers the force majeure on propylene supplies from the fluid catalytic
were locked in a stalemate, with offers heard at $735/mt CFR cracker at its Rotterdam refinery in the Netherlands, a company
China and bids at $720/mt CFR China. “On Friday, sellers were source said. The source added that force majeure remains in
willing to discuss at $730-735/mt CFR China levels, but the place on supplies from the FCC at PCK Raffinerie’s plant in
bids were too low,” a trader said. This week, Sinopec nominated Schwedt, Germany, where production is currently ramping up.
its June contract price at Yuan 6,500/mt, down Yuan 400/mt Force majeure was declared on propylene out of Schwedt in
from its May settled price. The CP is usually higher than Platts mid-May following a fire at the site, and also out of the
previous month’s average prices, but Sinopec’s June CP broke Rotterdam unit, which suffered a power failure. The Rotterdam
the trend. Market participants say this is likely to set the ceiling FCC produces almost 50,000 b/d of gasoline and around

Copyright © 2010, The McGraw Hill Companies 16


PLATTS POLYMERSCAN JUNE 9, 2010

150,000 mt/year of propylene. The Schwedt unit has a 1,180/mt CFR China, with higher-end rates closer to
production capacity of 200,000 mt/year of propylene. $1,200/mt. LG Chem had raised its selling interest to
$1,150/mt FOB Korea for loading within July. Propylene’s
United States price increase ran counter to a $15/mt drop in polypropylene
US June propylene contracts initially settled 8 cents/lb lower values. PP margins returned to negative mode after a brief
Thursday, bringing June polymer grade propylene contracts to sojourn into the black last week. PP margins were negative by
55.50 cents/lb and June chemical-grade propylene to 54 $80/mt Friday, based on a raffia grade PP price of $1,215/mt
cents/lb, sources told Platts. The decrease followed a previous CFR China/Northeast Asia, propylene value of $1,145/mt
12 cents/lb decrease in May contracts and marks a 27% CFR China and a monomer-to-polymer conversion cost of
decline in contract prices over the course of two months. In $150/mt. To break even a PP producer in Asia would have
spot RGP appeared to stabilize this week with several June needed to price its raffia cargoes at at least $1,295/mt CFR
trades. June traded twice midweek at 38 cents/lb MtB pipe China/NE Asia, or $150/mt above the price of propylene.
and then again on Thursday at the same level. Spot PGP and Asia’s PP demand has been extremely lackluster, with worries
CGP activity was limited on the week, last heard traded at 51 about the health of the global economies prompting
and 49.50 cents/lb, respectively. In production, Dow was converters and distributors to de-stock.
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. Butadiene

Latin America Europe


Propylene contract prices for the Brazilian domestic market The market for butadiene and crude C4 continued to be
fell 12% in dollars for June to $1,149/mt FOB, said a source at perceived as tight in Europe as a continued demand for export
Braskem. The Brazilian propylene price formula usually material sucked out any spare product in the region. With the
follows the US and European contract movements with a continent’s largest consuming site, Butachimie’s 325,000
month lag. In May, propylene contract prices in the US went mt/year adiponitrile production plant in Chalampe, France still
down 16% and in Europe down by 6%. Downstream, PP on a maintenance outage, butadiene was longer in principle.
Brazilian offers to Mercosur were reduced by $100/mt for However, sources said that they had previously adjusted
June, said a source. “We are trying to be more competitive in volume flows to account for the outage. During the week
the market with the offer reduction,” said the source. LyondellBasell lifted a force majeure from supplies of butadiene
Following the drop, the Brazilian PP offers to Paraguay and out of its 80,000 mt/yr Berre, France unit, a company source
Uruguay were heard at $1,700 1,800/mt CFR for homo film, said. The force majeure had been originally declared April 15.
raffia and injection, $1,800-1,900/mt CFR for co-polymer Coupled with this, Dow’s steam cracker at Bohlen, Germany
impact and at $1,870-1,970/mt CFR for random. was restarted this week with the company expecting to be
producing butadiene Friday or Saturday, according to a
Asia spokesman. Also, Sabic confirmed Friday it had lifted force
Prices leaped $90/mt during the course of the week, as majeure on supplies of butadiene and raffinate 1 at Wilton, UK,
traders sought to cover short positions taken two to three a Sabic spokesman confirmed. However, sources continued to
weeks ago when crude oil, propylene and PP prices were in a bemoan the amount of light cracking and the ensuing low C4
steep downturn. It also has come to light that Idemitsu was yields. “There is a substantial reduction in production this
expected to lose about 18,000 mt of propylene production year,” one source said. “The light feedstock cracking season
from a monthlong unplanned shutdown of its steam cracker seems to widen every year.” While light cracking is the main
in Chiba, Japan. The steam cracker can produce 224,000 reason for lower C4 production in the US, the outlook for
mt/year of propylene from naphtha supplemented with LPG, Europe was also gloomy. “Middle East supply into Europe is
and is to be taken offline in late June for repairs. The plant increasing,” a producer said. “They tend to crack ethane, so no
was operating at full capacity Thursday. Through a number crude C4 is produced.” With more Middle East capacity due to
of physical cargo swaps, Idemitsu has acquired enough come on in the second half of the year, C4 customers are trying
propylene from its peers in Chiba to offset its production now to secure volumes for the future, he said. At the moment,
loss. A rebound in the price of crude oil futures to over the export market from Europe was active, sources said, driven
$74/barrel also fueled propylene’s increase. Three deals were by continuous demand from the US and aided by a weaker
heard to have transpired Thursday. Platts was able to confirm euro versus the dollar. One seller reported selling an
two of them — H2 June done at $1,100/mt FOB Korea (L/C unspecified-sized parcel to a trader at a price between
at sight) 1,500 mt, between LG Chem and a Korean trader, Eur1,600-1,650/mt, without specifying the terms or size. While
and mid-July at $1,110/mt FOB Korea (L/C 10 days) 1,500 European buyers said they were getting adequately supplied,
mt, between YNCC to Korean trader. A Chinese trader one said he was scouring for additional volumes in order to
reported buying an H2-June/H1-July lot Thursday at make spot sales. Another source said the export market was
$1,120/mt CFR (L/C 30 days), but the deal could not be still firming, citing sell ideas at $2,150/mt FOB NWE. However,
confirmed. On Friday, selling interest started from $1,170- the bullish nature of the NWE market was also illustrated this

Copyright © 2010, The McGraw Hill Companies 17


PLATTS POLYMERSCAN JUNE 9, 2010

month by another increase in the monthly contract source said the material was likely to be shipped by railcar to
settlement between Ineos Olefins and its partners including buyers. A second ship, though, was still looking for a home
Dow. The companies agreed on a price of Eur1,400/mt FD for about 5kt of material. Sources said the material was unable
NWE for June-delivered material, an increase of Eur50/mt to be fed into the US pipeline because of specification issues.
compared to May. Looking forward to third quarter One source said the material would likely end up in Mexico.
contracts, sources said that discussions had not commenced There also was concern this week that a shortage of Crude
yet, but the sentiment, considering the spot prices C4s in the US could hamper butadiene production, a source
throughout the second quarter, would be for another said. Regarding imports of butadiene to the US, one cargo
increase. Considering the monthly contract price, the from Korea was heard booked, with loading in mid-June. The
reported trade and the return of production sites, spot 5kt of material was being shipped from Korea to the US on
butadiene was assessed down Eur20/mt this week at the Norgas Alameda. That was on top of two other shipments
Eur1,670-1,680/mt FD NWE. On the export market, FOB from Korea expected to reach the US in the next couple
prices were reported in a wide range, from as low as weeks. Two shipments from Europe also are expected.
$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 Latin America
destination, and considering a US market between $2,250- For the Brazilian domestic market, butadiene contract prices
$2,400/mt, the FOB price was assessed up $12/mt at $2,060- increased 6% in dollars, said a source at Braskem Friday. The
$2,070/mt FOB R’dam. Fluctuations in naphtha values and June butadiene contract in Brazil after the price increase was
the volatile exchange rate were making it harder to pinpoint heard at $2,132/mt FOB. Brazilian butadiene contract prices
prices, one trader said. The same was true for crude C4 exports. follow the US contract prices movements closely.
While most sources reported a factor of between 1.30 and 1.33
to naphtha, one seller reported doing business at a factor of Asia
1.35. With no confirmation of the trade and considering the FOB KOREA/JAPAN: Prices basis FOB Korea/Japan dropped
return of production units in Europe, the factor was assessed at $32/mt. Buying appetite for spot FOB Korea/Japan cargoes is
1.32 to naphtha on a CIF NWE basis. The raffinate 1 market quickly disappearing amid sufficient exports from China,
continued to show a wide disparity between southern Europe, which is usually an active importer in the region. A FOB
where product was proving to be very long, and northern China cargo was reported to have been transacted below
Europe where demand for blending into ETBE and other $2,000/mt. Some Korean cargo term lifters started seeking
gasoline components was keeping demand moving. “While opportunities to sell term cargoes. Early Friday, China’s Shen
May was long, I have been getting less calls from sellers,” one Hua emerged trying to resell its ex-Korea term cargo (1,500
buyer said. “We are in the middle of the gasoline season and mt) for June loading at $2,050/mt FOB Korea. No buying
it’s a cheap product for blending.” Indeed, one source reported interests were reported at $2,050/mt FOB Korea. However,
selling an unspecified-sized parcel of R-1 at a factor of 1.18 to some market sources were skeptical if Shen Hua will be able
naphtha on a CIF NWE basis in northern Europe for delivery to resell the cargo under its term agreement. Meanwhile,
mid-month. At the same time, however, a southern European Idemitsu’s Chiba steam cracker outage may prompt tight
producer said he was selling product as low as naphtha flat on crude C-4 supplies in the country. A 1,800 mt crude C-4 lot is
a FOB basis for export to the US. This level was also echoed by due to be delivered for June from Indonesia to cover
a buyer who saw the market “awash” with product. With more Idemitsu’s supply shortfall. CFR TAIWAN/CHINA: The market
European crude C4 production sites coming back online this continued dropping amid heavy supplies in the local China
week, product will likely get more plentiful during the rest of market. China’s local butadiene market dropped to Yuan
the month. Considering the reported levels, the lengthening 16,000/mt ex-tank, or at $1,973/mt on an import-parity
market and the seasonal bullishness from gasoline blending basis. Import demand was scarce this week as end-users in
demand, the R1 factor was assessed unchanged this week at China were able to purchase cargoes in the domestic market.
1.13 times naphtha on a CIF NWE basis. However, traders’ offers were still at $2,100/mt CFR
China/Taiwan as spot availabilities in the region were rather
United States limited. Traders were also reluctant to reduce offers as
The spot US butadiene price fell slightly this week, but negative cracking margins may prompt lower cracker
remained well above the settled contract level. Spot was operations in the near term. Meanwhile, fixed price
talked between 103 and 110 cents/lb, with the assessment at discussions in Taiwan were limited. End-users in Taiwan were
105 cents/lb, down 3 cents from last week. Spot was 13 cents only interested in buying on a floating price basis amid
above the June contract price, though, as supplies remained weakening market. CFR SEA: Trading activities were limited
tight. The contract was initially nominated up 7 cents by in Southeast Asia as end-users received sufficient supplies on
Equistar, with Exxon following with a 5-cent increase. TPC a term contract basis. Shell is due to deliver its term cargo
capped the increase at 3 cents, though, with Shell following at from its new 155,000 mt/year butadiene unit next week to
that same level. There appeared to be some spot relief this South Korea’s Kumho. No fixed price discussions were
week as one of two ships unable to unload in recent weeks reported this week, but the market dropped in tandem with
was able to discharge at a terminal near Baton Rouge. A falling CFR China market.

Copyright © 2010, The McGraw Hill Companies 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 0
20-Jan 17-Feb 17-Mar 14-Apr 12-May 09-Jun
PX: Up $6 Friday to end the week at $910.50/mt FOB Korea
and $928.50/mt CFR Taiwan/China. There were more
Notes: All aromatics prices reflect assessments at close of previous Friday.
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 tender will expire on June 9. Thailand’s PTTAR also
the Platts Market on Close assessment process, but several awarded its sell tender for 5,000 mt of July loading PX at
bids were heard post-window for CFR Taiwan, Asia-origin a $16-20/mt discount to a 50% ACP/50% spot price
PX. A bid for H2 June rose from $920/mt CFR to $930/mt, formula. Isomer-MX: Up $5 to close at $802/mt FOB
while an H1-July bid was at $930/mt. For the week, PX Korea and $910/mt CFR Taiwan. There were no
rose $15.43, or 1.7%, and hit an intra-week low of participants on the MOC, but offscreen, two offers were
$902.50/mt CFR Wednesday as sentiments weakened after heard, at $820/mt FOB Korea and CFR Taiwan. Post-MOC,
the PX June Asia Contract Price was settled by all three a bid was heard at $800/mt FOB and it was said that
producers — ExxonMobil, Idemitsu Kosan and Nippon negotiations were underway at around $810-820/mt FOB.
Oil Corp. — at $940/mt CFR Asia, down $120, or 11.3%, Earlier in the day, a bonded warehouse cargo ex-
from May. Separately, Sinopec nominated its June CP at Zhangjiagang was said to be offering at $820/mt,
Yuan 7,600/mt ($933/mt on an import-parity basis), negotiable to $810/mt — but Chinese buyers felt that the
down Yuan 800, or 9.5%, from May. Tuesday, two Asia- price was still too high. Chinese buyers are mainly
origin parcels for July arrival were heard at $915/mt CFR, solvent-MX users, and solvent-MX was assessed at
and another deal was heard at $925/mt CFR Thursday. In $795/mt CFR China this week, up more than $40 on the
market news, Taiwan’s CPC issued a buy tender for 5,000 week. The poor PX-MX spread continues to cast a shadow
mt of H1-July arrival PX on a floating formula. The over the mixed xylene, even as supply tightens due to the

Copyright © 2010, The McGraw Hill Companies 19


PLATTS POLYMERSCAN JUNE 9, 2010

closure of arbitrage window between US and Asia. A costs and margin by selling at the arb level. The arb to Asia
trader said supply is not the issue now, but demand. was trickier to make work, though, with the July
“Demand is extremely low, so even if supply is tight, assessment Friday at $1,090/mt CFR China. At that level,
price will not rise.” Week-on-week, isomer-MX gained the US price would have to fall to near 46.5 cents/lb to
$21.25, or 2.7%, with two MOC deals Tuesday at $806/mt profitably ship from the US to Asia. The US domestic price
FOB Korea for H1-July loading. Both deals were sold by was heard near 55 cents/lb this week, down a penny from
KP Chemical to SK Energy. In market news, MRPL’s sell last week. The US 3- to 30-day price was assessed at 50.75
tender for 10,000 mt of MX to be lifted between July 1-10 cents/lb FOB USG this week, down 1.75 cents from last
was said to have been canceled as the bids failed to meet week. The balance of June was assessed at 50.95 cents/lb,
the floor price. down 1.5 cents from last week.

Asia
Styrene Asian styrene monomer held steady Friday with the FOB
Korea and CFR China benchmarks remaining at $1,062.50/mt
Europe and $1,082.50/mt, respectively. Over the week, however, SM
Styrene prices lost further ground this week as confidence came under intense pressure from the aftereffects of the
ebbed prior to the negotiation of the June contract price. eurozone debt crisis on concerns that demand erosion could
Prices were assessed down $37/mt versus last week. “There’s a result from the fallout. With China’s manufacturing
lot of volatility in currencies, oil and equities and if you put expanding at a slower pace than anticipated in May, market
those factors in...[traders] are cautious about what will participants also took a more cautious approach. This resulted
happen in the next few hours,” a net consumer said. in SM prices trending down 2.92%, or $32/mt, from
However, despite this volatility demand was considered good. $1,094.50/mt FOB Korea on May 31 to Friday’s $1,062.50/mt,
“There is plenty of stock available and buyers want to talk while domestic SM prices in China trended down from Yuan
down [the market] to pick up a good price. “The slide in oil 9,075/mt to Yuan 8,975/mt over the same period. In Friday’s
has calmed and benzene is higher. There’s a stable geo- spot market, a firm bid for an any July-loading Korean-origin
political environment,” a net consumer said. An NWE cargo was heard at $1,055/mt FOB Korea, while other buying
styrene CP barge price for June was settled at Eur1,072/mt indications at $1,060/mt FOB Korea for the same laycan were
($1,309.50/mt) FD NWE Wednesday, between Synthomer also reported. A sell idea was heard offscreen at $1,080/mt
and BASF, Synthomer said. The CP represents a fall of FOB Korea. In the CFR China market, buying indications were
Eur73/mt on the May CP of Eur1,145/mt. expressed at $1,080/mt for any July-delivery cargoes, while
selling indications were heard at $1,100/mt CFR China. No
United States deals were heard by market close, however. In the CFR China
The US styrene price continued to fall this week, as the market, parcels were traded unchanged over the day at Yuan
benzene and ethylene contracts settled lower. There were 8,950-9,000/mt ($1,098-1,104/mt import-parity basis) in spite
several deals heard done, with a parcel heading to a Mexican of firmer front-month crude futures, which were up
buyer, for a price pegged below 50 cents/lb. A US trader also $0.70/barrel on the day at $74.75/b, as main feedstock
bought for export to Europe for a price between 50.5 and 51 benzene was assessed down $3/mt on the day at $815/mt FOB
cents/lb. A US producer also was heard to be shipping Korea. Buyers also pointed to the high run rates being
product to Asia, though the price required to make shipping maintained, which includes Tianjin Dagu’s 500,000 mt/year
product to Asia profitable remained below US variable costs. plant at 85% capacity, while CSPC’s 700,000 mt/year plant
US styrene traders could profitably move product from the was running at full capacity. In other plant news, Sinopec
US to Europe if they are able to buy below 51 cents/lb, a Zhenhai Refining & Chemical Company is expected to start
producer said Friday. With European styrene trading at its 620,000 mt/year SM plant by the end of June, in line with
$1,180/mt FOB R’dam for June, and assuming $55 to cover a restart of the company’s 1 million mt/year naphtha-fed
freight and margin, the arb level from the US to Europe was steam cracker by mid-June. Based on an initial 50% run rate, a
estimated at just above 51 cents/lb. A trade was heard done minimum of 25,000 mt of SM is expected to be injected into
late last week between 50.5 and 51 cents/lb. The buyer the supply chain in July.
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
Advertise in Platts’ Newsletters
contract for June was settled at 295 cents/gal, down 57 cents
from May. The ethylene contract for May was settled this
RFPs • RFQs • Job Listings
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 +720-548-5479
48 cents/lb. With the arb level near 51 cents/lb, producers advertising@platts.com
would be able to capture nearly 3 cents/lb to cover fixed

Copyright © 2010, The McGraw Hill Companies 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 1100
Asian purified terephthalic acid closed $2 lower Friday at
$860/mt CFR China for Taiwan-origin cargoes. Two Taiwan-
950
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 800
crude, equities, and downstream polyester sales. It lost $25, or 15-Jan 12-Feb 12-Mar 09-Apr 07-May 04-Jun
2.82%, over the week — but has managed to stage a rebound
after each plunge. Market watchers remain wary and buyers Notes: All intermediates prices reflect assessments at close of Thursday,
with the exception of PTA CFR China.
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 Meanwhile, PTA feedstock paraxylene rose $15.43, or 1.7%, this
increasingly difficult in Q3 due to the eurozone debt crisis. week to close at $922.30/mt CFR Taiwan/China, $18 lower than
China’s Ministry of Industry and Information Technology on the June Asia Contract Price settlement at $940/mt CFR Asia.
Thursday said April textile exports have increased 0.3% from Based on a 50% ACP+50% spot price formula, PTA makers need
March, but the sector continues to face tremendous pressure to break even at just $774/mt CFR China even though the
from due to uncertainties in US, Japan and the EU. The current spot price is well above $850/mt CFR China. September
appreciating Yuan is also making Chinese exports more futures on the Zhengzhou Commodity Exchange fell Yuan 232,
expensive, especially to the EU and Japan at a time when the or 3%, this week, ending Friday at Yuan 7,386 per lot. CFR
euro and the Yen are sliding. Compared with last Friday, the India: Up $6 to close at $878/mt as spot activities picked up
CFR China and CFR SEA benchmarks were unchanged. due to the closure of MCC PTA India’s plant in Haldia. The

Copyright © 2010, The McGraw Hill Companies 21


PLATTS POLYMERSCAN JUNE 9, 2010

800,000 mt/year No. 2 line was shut for a turnaround from South Asia for end August delivery. CFR Far East Asia/Southeast
May 23-June 8, while the 470,000 mt/year No. 1 line was shut Asia prices fell $25/mt on the week to $2,425/mt and
for a three-day maintenance over June 3-5. Traders said $2,430/mt, respectively, while CFR South Asian prices fell
demand from India continues to grow and sellers are turning $25/mt to $2,470/mt. Stiff buying resistance on weak
their attention to the region as prices are now much better acrylonitrile-butadiene-styrene and acrylic fiber prices further
than CFR China. 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
Acrylonitrile Taekwang abandoned offering its 1,000 mt cargo for June
loading in the spot market, and the cargo was heard diverted to
Europe an existing contract customer in Korea. While spot cargoes
NWE acrylonitrile prices held steady this week amid a dearth continued to remain tight over the remainder of June, with
of prompt materials, with the upside capped by consumers’ Asian producers such as Taiwan’s China Petrochemical
resistance to pay above $2,400/mt given the weakness in Development Corp. and South Korea’s Taekwang having sold
feedstock prices. A buyer said he’d seen an offer at this level out its June cargoes. While the 5,000 mt cargo sold by ICC and
for August delivery, US origin, but had turned it down as he Vinmar for end August delivery was outside the Platts 30 day
found the shipment date “too risky”. “Everbody’s expecting assessment period, Asahi Kasei’s contract price nomination for
prices to go down,” he said. Another buyer said he thought June at $2,200/mt CFR Far East Asia, plus concerns the ongoing
$2,250-2,300/mt was a “fair” range given the weak propylene sovereign debt crisis will affect demand for downstream ABS
values, but would accept $2,400/mt for June shipment. A and acrylic fiber applications, resulting in market participants
European producer however, said he would continue to offer preferring to operate at lower run rates on contractual supplies.
in the range of $2,360-2,420/mt. Several traders claimed to In the domestic Chinese market, Shanghai Secco Petrochemical
have seen buying interest at $2,500/mt, but other market was offering spot cargoes at Yuan 20,000/mt ($2,350/mt
sources described the level as “unsustainable” and expected a import-parity basis) for H2-June delivery, down Yuan 500/mt
sharp correction later on. “At the moment, these prices are from its offer a week ago. Buying interest for spot cargoes was
above the traditional cost base. This has got to correct at some also dismal in line with lower domestic ABS offers at Yuan
point,” said a fiber manufacturer. Supply constraints 15,600-15,800/mt ($1,833-1,857/mt import-parity basis). This
prompted Ineos to continue to partially run the 280,000 led buyers to rely on existing contract supplies, as the economic
mt/year Seal Sands ACN plant during the unit’s June 8-29 outlook remained uncertain on news from China’s State
turnaround, a source said Tuesday. Petkim extended the Council’s Development and Research Center that China’s
shutdown of its 90,000 mt/year ACN unit in Aliaga, Turkey, a economic growth may slip to 10-11% in the second quarter as
source said Tuesday. Trading sources said LukOil has restarted industrial production and investment expanded at a slower-
the 140,000 mt/year Saratov plant in Russia following repair than-expected pace. In plant news, Secco shut one of two
work. LukOil has yet to comment. 130,000 mt/year ACN lines at its plant in Caojing, Shanghai,
for eight days of scheduled maintenance Tuesday. The second
United States line is running at full capacity, although Secco will not offer
The US ACN price shifted lower this week as falling feedstock spot cargoes during the turnaround.
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, Ethylene Dichloride / Vinyl Chloride Monomer
one producer said, with orders for August already coming in.
Buyers, though, were hoping for prices below $2,400/mt as Europe
propylene prices have fallen nearly 10 cents during the past EDC: The NWE market was beginning to take on a bearish feel,
two weeks. Chemical-grade propylene values this week were at according to one market source this week. Little trade was
53.5 cents/lb, down from 62.25 cents/lb two weeks ago. The US reported done and the lack of buy interest could see prices dip.
ACN price this week was assessed at $2425/mt FOB USG, down “I’ve done no further trade since last week and it feels like the
$45 from last week. The delivered price was assessed 2 cents market might be turning downwards,” said the source,
lower at 113 cents/lb. Downstream demand was expected to be although he added that prices hadn’t fallen yet. Elsewhere in
strong for a couple of months, a source said, particularly from the chlorvinyls chain, IneosChlorVinyls announced a price
ABS producers. However, buyers were hoping to wait for ACN increase of Eur25/mt ($30/mt) per dry metric tonne for June
prices to fall before attempting to restock, a source said. caustic soda business, a company statement said Tuesday. The
statement added that a further increase—which is yet to be
Asia determined—will be applied July 1 for quarter 3 caustic soda
Asian acrylonitrile prices in the Far East and Southeast Asia business. The company said the announced increase was “due
started ceding ground, with a steep backwardation expected for to reduced margins on the electro-chemical unit and a
August on news that both ICC and Vinmar had resold a 5,000 continuing low stock position.” VCM: There was little change
mt cargo to Indian acrylic fiber producers at $2,370/mt CFR reported in the VCM market this week, as low levels of

Copyright © 2010, The McGraw Hill Companies 22


PLATTS POLYMERSCAN JUNE 9, 2010

production in PVC meant VCM producers continued to use PVC prices rose Yuan 50/mt to Yuan 7,600/mt delivered,
product internally and restrict spot product availability. PVC while carbide-based PVC prices rose Yuan 100/mt to Yuan
producers were bullish, with a minimum of Eur60/mt 7,350/mt delivered. China’s carbide-based PVC market is
targeted as a price increase for June. One producer said: “All being lifted by firm carbide feedstock values amid rising
PVC producers are struggling. We all have the same needs as electricity prices in China.
an industry and we all face the same problems, so we may
end up with a more consistent approach to June.”
Dimethyl Terephthalate
United States
The US EDC price fell this week as export demand remained Europe
sluggish, and domestic demand was heard to be tapering off. The upstream June NWE PX CP was understood to have
“Not much [EDC] is moving because the Asian market has been fully settled at Eur835/mt ($1,019/mt) FD NWE this
some bearish tones,” a trading source said. The price was week—a fall of Eur35/mt versus the May CP of Eur870/mt,
assessed at $425/mt FOB USG, down $25 from last week. according to market sources. Following an initial settlement
Also contributing to the lower price was falling ethylene reported by Cepsa Quimica Wednesday, producer Total and
prices. The May US net ethylene contracts were settled at Lotte UK confirmed their acceptance of the price, while
44.75 cents/lb, down 7.75 cents from the April contract. The ExxonMobil was also said to have agreed it—although this
settlement was in line with prior expectations of a 7- to 10- could not be confirmed directly. A consumer said the CP
cent drop. The move comes as spot ethylene values were at a had been a compromise, adding that the May CP of
year-long low. PVC operating rates above 90% during the Eur870/mt FD NWE had been “no good for anyone”.
past month helped keep some upward pressure on VCM “Eur835/mt was at the high end of the envelope, but with
prices. That demand, though, was not expected to provide the fluctuations in the exchange rate it was not clear
enough support to offset the recent drop in ethylene prices. whether it would be a good price or not. It’s a matter of
The May US net ethylene contracts were settled down 7.75 comparing [the CP] to the previous CP and exchange rate at
cents this week at 44.75 cents/lb. The US VCM price was the time,” he said. A DMT producer said Eur835/mt was
assessed flat this week at $715/mt FOB USG. The delivered acceptable, but added it was still on the high side
price was at 39.44 cents/lb. considering the June ACP of $940/mt (Eur770/mt) CFR Asia.
DMT activity was understood to be firm, especially
Asia compared to 2009, although one source said volumes were
EDC: The Asian ethylene dichloride market weakened this still expected to drop closer to August.
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. NEWS
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
US toluene nearly 20 cents higher
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 above 2009 summer blend value
East Asia from $500/mt the previous week. Buyers’ sentiment Houston — US toluene's premium over blend value is nearly
was also weakened in Asia on sharply-dropping ethylene 20 cents/lb higher so far during the 2010 driving season,
feedstock values. The CFR Northeast Asia ethylene price compared to the same period in 2009, according to Platts data.
benchmark was pegged at $961/mt Thursday, $59/mt lower Driving season typically runs from the beginning of May until
than last week. Meanwhile, an arbitrage window from the US the end of September, sources said. The premium for toluene
to Asia is still closed. The US EDC market is weakening, but at over blend value considers data from 25 trading days were
a much slower pace than Asia, and prices basis FOB USG were taken from May 3 to June 8 in both 2009 and 2010. So far this
pegged at $450/mt. VCM: Asian vinyl chloride monomer summer, the higher premium was due to suppliers who were
prices dropped $21-25/mt on the week to a five-month low exercising "pretty good self-control," offering well above blend
Thursday, pressured by weak VCM demand for PVC value despite a lack of demand from the gasoline pool and no
production amid weakening PVC prices. Asian PVC prices export opportunities or chemical demand, sources said. "No
dropped $16/mt, or 1.7%, on the week Wednesday to settle at one wants to sell lower," one trader commented. One
a year-low of $949/mt CFR China. Tracking this trend, the participant said he needed to sell a minimum number of barrels
Asian VCM market also traveled south. Thursday, a spot cargo in order to be coaxed into producing enough material to go
was reported to have been transacted at $799/mt CFR China, into the spot market. Still others pointed to margins that
lower than a deal done level of $805/mt CFR China earlier remained positive for swing toluene disproportionation (TDP)
this week. Prices basis CFR Southeast Asia were between $820- and MSTPD units in the US, so there was still motivation for
830/mt this week on thin trading. Some trading sources said manufacturers to continue to produce material. A
the Asian VCM market is near its bottom as local PVC prices manufacturing source though said, "There is a point where
in China have started to rebounded slightly. Ethylene-based (toluene and mixed xylenes) will not go well above blend

Copyright © 2010, The McGraw Hill Companies 23


PLATTS POLYMERSCAN JUNE 9, 2010

value," because suppliers will start to slash rates. Currently around five factor points since May 28, with sources citing
chemical demand was weak, given that Asian inventories lackluster demand for MTBE against a glut of supply. Despite
were full, and sentiment was bearish on questions about the an improving blending economics picture — which would
European economy. For instance, in East China this week, entice blenders to use more MTBE in their gasoline blends —
toluene inventories held by traders were estimated to be at there remains too much MTBE in storage and an absence of
180,000 mt Monday, far above the region's normal monthly any incremental demand from fresh tenders, sources said.
inventory levels of 60,000-80,000 mt. Further, Japan's Nippon Early this week market sources said that at a factor of 1.05
Oil Corp. Wednesday said it would maintain operating TDP blenders would step in and buy barrels, but as yet the market
rates in Mizushima below 100% indefinitely, due to weak has yet to find its floor, they said Wednesday. "[A factor of]
production margins. Blenders meanwhile were seeking 1.05 has been the historical blend value at which buyers
cheaper octane values in ethanol and alkylate, sources said. would step in. Buying is lackluster because people are still
On June 3, US production of ethanol-blended conventional chewing through it [current over-supply]. If naphtha-gasoline
gasoline hit yet a second all-time high for the reporting week weakens you'll see people buying," a trader said. "There should
ending May 28, according to statistics released by the US be a blend margin but no one is in a hurry to blend it. There's
Energy Information Administration. The US produced 4.918 no sense in bringing it in," said one industry player. "You
million b/d of conventional gasoline blended with ethanol, would [likely] optimize it by keeping in the Arabian Gulf or by
up from 4.757 million b/d for the week ending May 21, the sending it into Asia," he added. "Europe is not a big enough
EIA figures show. The previous high was for the week ending market to take it. At a factor of 1.03-1.04, how long will it take
May 14, 4.823 million b/d. On Thursday, toluene was assessed to create a good blend value?" asked a trader. "With alkylate
23 cents above blend value at 224.72 cents/gal. Blend value is trading at a 1.22 factor above gasoline and reformate at an
an estimate of the price level at which toluene and mixed [approximate] $15/mt premium above gasoline, it's a question
xylene can profitably be used to boost octane or lower RVP of finding oxy [gasoline] outlets," a producer said. The problem
ratings in gasoline. Since the RVP values for gasoline shift was that these outlets were few and far between, with little or
lower in spring and summer gasoline blends -- and both no gasoline US-bound arbitrage opportunities, sources said.
toluene and mixed xylene have low RVP ratings -- blend "Storage tanks are full. There is no arb, and more direct
demand for both toluene and mixed xylene tend to increase ethanol blending in the US and the US can fulfill its own
during the spring and summer. 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
European MTBE Eurobob factor
struggling. They brought more in [earlier this year]. The
drops to 2010 low of 1.03 Venezuela pull through on high factors attracted material [into
London — The Northwest European MTBE factor versus NWE]," the first producer said. In March Venezuela's state
Eurobob Wednesday fell to 1.03, both its lowest point this year PDVSA tendered for a combination of April and May-loading
and a historical low since Platts began assessing Eurobob on MTBE. According to European market sources, the tender was
July 1, 2009. Wednesday's factor dropped below the previous comprised of two lots: for 300,000 barrels to be loaded in late-
record low of of 1.045 recorded Tuesday. Octane-booster MTBE April and 200,000 barrels to be loaded in early May, 10 days
is assessed at a factor — effectively a percentage ratio — to apart, equivalent to 59,000 mt. Prior to this PDVSA tendered
gasoline barges, to reflect the economic advantages of 40,000-60,000 mt of MTBE for delivery March 28-April 3,
blending the component into gasoline. It can also be assessed market sources reported. In addition, there was not enough of
at an outright price in dollars/mt. The factor has now dropped 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 December 2010 on the over-the-counter market closed at
by 2012: UK's DECC Eur15.70/mt on Tuesday, and the contract was trading little
London — The price of carbon allowances under the EU changed at Eur15.71/mt by 12:50 BST (11:50 GMT) Wednesday.
Emissions Trading System is expected to rise to Eur17.31/mt
($20.74/mt) of CO2 equivalent by 2011 and Eur17.55/mt by
Total, UAE's Masdar to build
2012, the UK government said Wednesday. The projections for
2011 and 2012 are based on a central scenario, with a Eur8.84- world's largest solar power plant
21.55/mt range for 2011 and Eur8.96-21.91/mt for 2012, the Dubai — French oil major Total has teamed up with the
department of energy and climate change said in a statement. Abu Dhabi Future Energy Co, or Masdar, to build the world's
Looking further ahead, DECC said it expects the EU carbon largest concentrated solar power plant in the UAE capital, the
price to rise to Eur18.28/mt by 2015, Eur19.73/mt by 2020 and first of its kind in the Middle East, the companies said in a
Eur84.74/mt by 2030, according to its central projections. DECC statement Wednesday. Masdar appointed Total and Spain's
said its projections were revised to include new information on Abengoa Solar to build the Shams 1 solar power plant, which
fossil fuel prices, economic growth and changes in scope to the the statement said would be one of the UAE clean energy
EU ETS. "The impact of this new information on the DECC company's flagship projects. Construction of the power plant
carbon price model has been to revise the carbon values will begin in the third quarter of 2010 and is due to be
significantly downwards," said DECC in the report. The completed within two years. It will contribute toward Abu
government department said one of the main challenges to the Dhabi's target of achieving 7% renewable energy power
modelling is to the estimated level of emissions that would take generation capacity by 2020. Shams 1, to be built at Madinat
place without the EU ETS. "Lower economic growth across the Zayed, some 120 km southwest of Abu Dhabi, will have a
EU has led to lower demand for electricity and carbon-intensive capacity of approximately 100 MW and a solar field
industrial products, and therefore a lower expected level of consisting of 768 parabolic trough collectors to be supplied
business-as-usual emissions. This has the effect of lowering EUA by Abengoa Solar. The project is registered under the UN
prices as the amount of abatement that is required in the EU Clean Development Mechanism and is eligible for carbon
ETS is reduced," said DECC. "Another significant change to the credits, the statement said. The plant will displace
modelling has been to incorporate more detailed research into approximately 175,000 mt of CO2 per year, equivalent to
the abatement options available in the industrial sectors covered planting 1.5 million trees or removing 15,000 cars from Abu
by the EU ETS. This research shows that there is a greater range Dhabi's roads. Masdar will own a 60% stake in the
of abatement options in these sectors than we have previously consortium with Total and Abengoa Solar holding 20% each.
assumed, which has the effect of lowering our carbon values," it Although the UAE is a member of OPEC holding
said. The scheme's regulator, the European Commission, has approximately 8% of global oil reserves, nearly all
said it intends to reduce the overall cap on carbon emissions concentrated in Abu Dhabi, and the sixth largest natural gas
under the EU ETS using a linear annual factor of 1.74% in Phase reserves, it has taken the lead among the region's oil
III, which would reduce the cap from 1.974 billion mt/yr in producers in developing clean energy sources to help meet
2013 to 1.72 billion mt/yr by 2020. The EC has also said it rapid demand growth for energy in the seven emirates that
intends to extend the 1.74% annual reduction into the scheme's make up the UAE federation. Energy demand is growing at
Phase IV period, which will run from 2021 to 2028, and an average 10% per year and all seven emirates are short of
beyond. A DECC spokesman said the sharp jump in its natural gas for power generation and desalination plants. The
projected prices between 2020 and 2030 is partly explained by UAE is a net importer of natural gas through the Dolphin
the department's use of two different models: one used for the Energy project, which supplies pipeline gas from Qatar's
projections up to 2020 based on the current workings of the EU North Field to the UAE and Oman. Masdar, which is building
ETS, and another longer term model which considers long-term the world's first carbon neutral city on the outskirts of Abu
emissions stabilization goals. DECC's projections for carbon Dhabi, is a wholly owned subsidiary of Abu Dhabi's
price scenarios were based on the EU's existing target to reduce government-owned Mubadala, which has interests ranging
economy-wide emissions by 20% from 1990 levels by 2020. The from energy to aerospace. Mubadala holds a 51% stake in
figures in the report were quoted in UK Pounds/mt of CO2e and Dolphin Energy with partners Total and the US' Occidental
converted into euros. The price of EU Allowances for delivery in with 24.5% each.

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


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Copyright © 2010, The McGraw Hill Companies 25