]

Platts European and US Solvents Price Assessments

FOB Rdam (US$/mt) 1120 - 1130 1113 - 1117 1160 - 1170 1025 - 1035 1110 - 1120 FOB USGulf 52.50 - 53.50 52.50 - 53.50 FOB USGulf 63.00 - 64.00 370.85 - 373.80 FD NWE (Euro/mt) 810 - 820 850 - 860 940 - 950 905 - 915 970 - 980 FOB Chicago 54.50 - 55.50 54.50 - 55.50 DER 62.75 - 63.25 Solvent Naphtha (C9) Toluene Xylenes White Spirit(14-195) Hexane(Special Grade) (/lb) Toluene Xylenes (/lb) Hexane Hexane cts/gal

www.platts.com

Solventswire
Volume 34 / Issue 27 / July 5, 2011 Solvent Naphtha

Northwest Europe
There were mixed pictures between the NWE solvent naphtha barge and truck market this week, with the FOB Rotterdam market supported by rising gasoline values, whilst truck prices were still under pressure. Sources saw prices sliding down in the truck market for both spot and monthly values. One distributor reported selling at Eur810-820/mt FD NWE this week adding: There is very slow demand at the moment. Prices are falling, but theres still no demand. Prices were also reported to be lower for July monthly prices, with a UK source saying levels were down by 1 pence per liter. The slowness in the truck market was also restricting barge trade as distributors reported postponing buying in order to see the next price move. However, gasoline prices were supporting the barge market, with 10ppm gasoline seen trading between $1,019-1,022/mt FOB AR at close Tuesday, compared to $962/mt last week. Eurobob was also above $1,000/mt at $1,002/mt at close. The wide premium reflected increased demand for 10ppm from West Africa. In C10s, one source said the lack of supply going into high season meant the market was facing a critical situation. A producer supported the view by saying the market was still tight with no spot volume available.

Platts Global Oxygenated Solvents Price Assessments

FOB Rdam (US$/mt) 1690 - 1700 1605 - 1615 1305 - 1315 1305 - 1315 2715 - 2725 2755 - 2765 1545 - 1555 1880 - 1890 FD NWE (Euro/mt) 1210 - 1220 1150 - 1160 945 - 955 1920 - 1930 1945 - 1955 1110 - 1120 1340 - 1350 FOB USGulf DER (US$/mt) (US$/mt) 1720 - 1760 1980 - 2020 1306 - 13281315 - 1325 (N) 1598 - 1620 NA - NA NA - NA 3160 - 3200 3110 - 3150 2690 - 2730 2600 - 2640 1550 - 1590 1715 - 1765 2190 - 2230 2225 - 2265 FOB DSP (200) 490.00 - 500.00 CFR SEA 1569-1571 1139-1141

IPA Phenol (N) Acetone T1 Acetone T2 MEK MIBK E Acetate B Acetate

US Ethanol (cts/gal) (US$/mt) Phenol Acetone

(N) Phenol is basis FOB Ex-Tank

FOB DSP (190) 465.00 - 475.00 CFR China 1529-1531 1099-1101

Solvent Toluene

Asian phenol, acetone assessments are basis L/C 90 days *NWE methanol FOB Rdam price is in Euro/MT for T2 cargoes. **US Methanol is cts/gal FD NWE prices in table based on spot lots of 20 mt in the German mkt. FOB based on larger spot parcels for import/export. DER US prices in table based on spot lots sold on a delivered, east of the Rockies basis in truckloads.

Northwest Europe
Spot FOB Rdam toluene prices climbed by $45/mt over the week as the solvent market was pulled upwards by a tight and bullish toluene diisocyanate (TDI) grade market, sources said. One source said toluene was balanced-to-tight for July although this was more for TDI product which was called very very short by a producer. A buyer added: Ive been checking the market for the past ten days and there are no offers. I dont think there would be a molecule available below $1,150/mt. Although these levels related more to TDI grade than nitration, a consumer felt that solvent grades would also be higher. If someone really wanted to buy toluene, they would have to pay above $1,100/mt, the consumer said. There was still a lack of clear price indications, however, and one source noted that it was so difficult to put a price tag on toluene. One source noted that the nitration market had been quiet since May. The

Platts Global Chlorinated Assessments

FOB Rdam (US$/mt) 348 - 353 FD NWE (Euro/mt) 395 - 405 FD NWE (CP) (Euro/mt) 210-220 FOB USGulf (US$/mt) FOB USG 445 - 455 $/mt 440 FOB NE Asia (US$/mt) 448-450 DER (US$/mt) FOB Plant 235 - 255 - 450 $/dst

Caustic Soda

Chlorine

Chlorine Caustic Soda

US Contract 300 - 320 480 - 495

Caustic Soda

CFR SE Asia (US$/mt) 500-502

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PLATTS SOLVENTSWIRE

JULY 5, 2011

source continued: I hear numbers [for nitration] between $1,050-1,150/mt, so it is very hard to call in reality. The truck market was not responding in the same way and one distributor noted there was still cheap product around. We had to let some business go, because buyers would only pay below the Rotterdam equivalent, the distributor said adding that he was offering at Eur840/mt FCA. A second source noted that delivered prices were between Eur850860/mt FD NWE, supporting the view of the first source that prices had not risen market-wide.

levels in the market and although he believed that delivered prices should be clearly above Eur900/mt, he added that FCA levels were at Eur870/mt. This suggested that delivered levels could be below Eur900/mt in some cases.

United States
US solvent xylene prices was steady at 52.50-53.50 cents/lb FOB USG this week despite higher barge markets, participants said. There were no spot trades heard. The MX barge assessment Tuesday climbed 12 cents/gallon week on week Tuesday to 369 cents/gallon FOB USG for July on stronger NYMEX RBOB. Platts data showed that spot mixed xylene was assessed at 14 cents/gallon under the blend value Tuesday. A week ago, the difference was smaller at 6.5 cents/gallon. Market sources said this indicated that mixed xylene would potentially be more attractive as a blendstock as it is currently undervalued. A producer was hoping to hear increases in solvent mixed xylene prices as the rising barge market had put severe pressure on profit margins. Asian solvent xylene dipped $4/mt week on week Friday to $1,106/mt FOB Korea and $1,135/mt CFR China on weaker Asian spot mixed xylene. In Europe, solvent xylene rose by $35/mt to $1,165/mt FOB Rotterdam on limited supply, said sources in the region. Market sources in the US said the FOB Chicago price was unchanged at 54.50-55.50 cents/lb.

United States
US solvent toluene was unchanged at either side of 53 cents/lb FOB USG despite stronger barge toluene, a source said Tuesday. There were no spot trades reported this week. A producer said he was hoping to institute a price hike soon, as break-even costs were higher and shrinking profit margins. Barge toluene rose 9 cents/gallon week on week to 370 cents/gallon FOB USG for July as it continued to track NYMEX RBOB futures. Spot toluene was assessed Tuesday roughly 11.6 cents/gallon under the blend value. A week ago, the spot value was only 1.2 cents/gallon under the blend value. Traders said this meant toluene was more attractive as a blendstock, as it is considered undervalued. The premium of spot toluene to regular unleaded 87 USGC gasoline was at 73.08 cents/gallon Tuesday, compared to 85.23 cents/gallon a week ago. In Europe, solvent toluene was assessed up $45/mt week on week at $1,115/mt FOB Rotterdam as sources reported a tight and bullish TDI-grade market. The FOB Chicago price remained stable on either side of 55 cents/lb, according to market participants.

White Spirit

Northwest Europe
Sources continued to report excellent demand from the Turkish market for European white spirit this week, a fact that was helping producers offset slow domestic demand. One producer reported lots of inquiries from Turkey and North Africa, noting that strong economic growth in the region was helping boost the coatings industry there. Because of this, the producer believed that higher premiums to jet kerosene could be achieved by sellers. I think a premium around $70-80/mt would be normal levels, the producer said. In the truck market, prices were under pressure from weak demand in the NWE region. July monthly prices were reduced by Eur30/mt, one source said, whilst a distributor added: We have only done two deals so far this week, both at Eur910/mt. The low aromatic D40 market was also down ny Eur30/mt month-on-month and described as quiet. Jet kerosene closed the week up by close to $40/mt at around $1,020/mt FOB Rdam.

Solvent Xylenes

Northwest Europe
The NWE xylene barge market rose by $30/mt over the week, with prices supported by limited supply and solid prices in the US Gulf Coast. Offers rose from the previously heard sell idea of $1,145/mt 1kt FOB Rdam and by July 1 trade had been reported done at $1,182/mt. This level was supported by a FOB USGC price of 368 cents per gallon or $1,122/mt and some sources felt that a lack of material in Europe meant the market would be priced on a US plus freight basis. That is the benchmark now, because I dont see any available domestic volume. Europe is dry, said one source. Other sources did not think the market was at that point, however, and questioned whether the trade value could be repeated. Indeed, a trader was heard offering at $1,165/mt FOB Rdam for July delivery and by July 1 the offer fell to trade at $1,160/mt FOB Rdam. In the truck market, there were mixed views. One source said that the market was working well but acknowledged that prices had fallen a little. The source saw levels between Eur950-960/mt FD NWE down Eur10/mt on the previous week. A second source saw lower

Hexane

Northwest Europe
The NWE hexane market weakened this week, with reports of barge trade narrowing the premium between naphtha and

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hexane. A distributor reported buying a 1,600mt parcel at $1,080/mt CIF Rotterdam this week. The trade level was $30/mt lower than the previous weeks FOB Rdam assessment, although a sharp climb in naphtha Tuesday helped support the market and push assessed prices above the trade level. Naphtha closed just below $945/mt CIF NWE Tuesday, a climb of over $50/mt on the previous weeks. In the truck market, prices were still falling according to sources. One German distributor reported 23mt trucks sold at Eur970-980/mt FD NWE this week. The same source felt that prices could go lower as we enter the summer holiday period. Holidays will bring lower demand and it will bring pressure on prices. I think we could go down to Eur950/mt, the source said. In the Mediterranean, a source saw strong demand adding that healthy premiums above naphtha reflected the current market situation.

sources said. Traders in the export market reported prices came down in second half June by $130/mt based on upstream pressure from dropping propylene values. Prices are still weak and could slip more during July depending if propylene keeps falling, a domestic distributor. said. In supply news, market participants reported no supply issues with product being available from US producers as well as from Sasol and Allchem, who import product and have inventories at terminals in the East Coast. Buyers said demand was healthy in the coatings, inks and pharmaceutical markets and expected to remain this way during July. For June, chemical-grade propylene settled 15 cents lower at 80.5 cents/lb, with the spot heard to be trading at 73-74 cents/lb going into July.

Phenol

United States
Spot hexane values moved higher this week, supported by gains in the energy complex. NYMEX August crude settled $1.95 higher at $96.89/barrel Tuesday, this after having posted slight declines of 48 cents on Friday. Additionally, RBOB values posted sizeable gains, jumping roughly 10 cents last week. August RBOB settled 48 points higher at $2.9774/gal. Those gains pushed the spot price slightly higher, and sources talked the market at near 63.50 cents/lb FOB USG and at roughly 63 cents/lb ex-tank DER. Sources said demand had firmed, though there was little change on the supply side and sources continued to talk of a snug market.

Northwest Europe
Demand for spot phenol was poor this week as customers remained well supplied through term contracts, sources said. On the other hand, producers claimed they did not have any spare material to offer outside their contractual commitments. Therefore, one source said it was extremely difficult to gauge prices in the spot market because it simply doesnt exist. At the end of the day, spot phenol prices become a little academic because it follows whatever happens to benzene, he added. But a second phenol producer said he sold a phenol parcel at Eur1,050/mt FD NWE, pointing to a premium of Eur296/mt over benzene. This trade could not be corroborated around the market. The NWE benzene contract price for July was agreed at Eur754/mt FD NWE, a fall of Eur80/mt compared to June, and reflected losses seen in the spot market over the month. Pending confirmations, acetone fell by Eur80/mt to Eur1,155/mt FD NWE in line with the drop in benzene.

Isopropyl Alcohol

Northwest Europe
IPA prices fell further this week on continued pressure from lower feedstocks and improved availability. Whereas deals were fixed at Eur1,230-1,240/mt FD NWE last week, distributors reported selling trucks at Eur1,210-1,220/mt FD NWE this week. One seller said better prices have pushed up demand for spot IPA and activity was overall good. However, widespread expectations that prices would keep weakening within July put a lid on the amount of product consumers were willing to take. Customers waited [for the July decreases] and now they really need product, one distributor said. But they are still buying only what they need to meet prompt demand, he added. The same distributor claimed he was also keeping stocks low as prices were likely to fall. On the week, prices polymer grade (PGP) were heard at around Eur1,050-1,070/mt FD NWE, down Eur1,135-1,140/mt the previous week, pointing to mouting downward pressure.

United States
Phenol prices escalated $12/mt week on week to be assessed Tuesday on either side of $1,317/mt, with sources attributing the gains to movements by the feedstock benzene. Compared to a week ago, feedstock benzene rose 4 cents/gallon to 374 cents/gallon FOB USG for July on gains in NYMEX crude, which settled up $1.95/barrel Tuesday to $96.89/barrel. The benzene-to-crude ratio slid for the sixth consecutive day to 1.621 after hitting 1.7009 June 24, according to Platts data. Sources said a ratio of at least 1.7 is considered economically favorable for benzene producers, illustrating the undervaluing of benzene in the current spot market. The ratio was at 1.678 a week ago. In Asia, phenol softened $55/mt week on week to $1,530/mt CFR China on thin demand from China. Phenol in Europe plunged by $100/mt week on week to $1,610/mt FOB Rotterdam as sources reported poor demand for spot phenol as customers remained well supplied through term

United States
IPA prices were expected to fall based on lower propylene values but were seen stable this week amid good demand,

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contracts. The ex-tank USEC price rose by $30/mt to either side of $1,320/mt, sources said.

Asia
Phenol prices weakened $55/mt week on week Tuesday to $1,530/mt CFR China on thin demand from China, with buyers in India also showing signs of remaining on the sidelines. The weaker demand was also felt by local producers in China as their prices fell below Yuan 13,000/mt ($2,010/mt). Sinopec Shanghai Gaoqiao Petrochemical cut its ex-work prices for phenol to Yuan 12,500/mt, down Yuan 600/mt from Yuan 13,100/mt last Tuesday. Similarly, Beijing Yanshans offers plunged to Yuan 12,600/mt, down Yuan 400/mt from Yuan 13,000/mt last Tuesday. In spite of the cuts, downward pressure was seen from ex-tank prices in East China, which stood at Yuan 12,400-12,500/mt. Spot deals were concluded at slightly higher than $1,500/mt CFR, market participants said. Bids were heard at about $1,520/mt CFR for European deep-sea cargoes. Traders were concerned as poor polycarbonate demand has led to lower requirements for bisphenol-A. Polycarbonate demand is not fantastic at the moment, a trader said, adding that BPA demand in China was also sluggish. Monetary controls and power shortages were cited as the mains reasons for the weaker demand. As a result, BPA producers are trimming their runs, reducing their phenol and acetone requirements and leading a buildup of solvent stocks in Asia. The buildup was limited by Japans Mitsui Chemicals, which shut its solvents plant at Takaishi, Osaka prefecture, Saturday for a turnaround that will end July 28. Before it shut, the plant was operating at 100% of its design capacity of 200,000 mt/year of phenol and 120,000 mt/year of acetone. In Thailand, PTT Phenol plans to restart its 150,000 mt/year BPA plant at Map Ta Phut, Rayong province, Wednesday. The plant shut unexpectedly June 25 due to technical issues. As a result of the shutdown, the run rate at the companys solvents plant at the same site, which has a capacity of 200,000 mt/year of phenol and 124,000 mt/year of acetone, was reduced to 90% from 100%. Acetone spot prices fell $10/mt week on week Tuesday to $1,100/mt CFR China. Sinopec Gaoqiao cut its ex-works prices for acetone to Yuan 8,700/mt from Yuan 9,450/mt, while Beijing Yanshans offers were at Yuan 9,000/mt after it had maintained prices for about two weeks at Yuan 9,550/mt. A producer said solvent run rates are hovering at about 75%, citing weak downstream demand.

now. They are constantly asking if you we can take extra volumes, one distributor said. Most fixtures for this week were done around the Eur950/mt FD NWE level, sources said, with some reports of deals going through at Eur920930/mt FD NWE on a net price basis. One acetone producer claimed to have sold product at Eur980-990/mt FD NWE but this could not be confirmed. Market participants described demand as healthy but claimed people were waiting for further decreases to purchase larger volumes. Customers in the Mediterranean were still paying a premium for spot material, with one producer claiming to have sold one acetone parcel above the Eur1,000/mt FCA Italy mark this week.

United States
Acetone moved down another $22/mt week on week to a range of $1,598-$1,620/mt FOB USG even though feedstocks benzene and refinery-grade propylene were stronger, sources said Tuesday. Feedstock benzene rose 4 cents/gallon week on week to an assessment of 374 cents/gallon FOB USG for July on firmer NYMEX crude, which settled up $1.95/barrel to $96.89/barrel. The benzene-to-crude ratio fell for the sixth consecutive day to 1.621 after hitting 1.7009 on June 24, according to Platts data. Sources said a ratio of at least 1.7 is considered economically favorable for benzene producers, illustrating the undervaluing of benzene in the current market. Feedstock RGP prices gained only 0.50 cents/lb week on week for a Tuesday assessment of 68 cents/lb MtB pipe. There was a flurry of spot activity late last week, a producer said. Based off of Tuesdays RGP assessment, the break-even cost for acetone producers edged up $9/mt to $1,199/mt. The margin between the break-even cost and the spot price dropped to roughly $410/mt. In Asia, acetone fell $10/mt week on week to $1,100/mt CFR China. In Europe, acetone declined by $45/mt to $1,310/mt FOB Rotterdam.

Methyl Ethyl & Methyl Isobutyl Ketones

Northwest Europe
MEK prices came off marginally for the first time in four weeks on lower feedstocks costs and a slight improvement in availability, sources said. One producer argued this weeks fall reflected a small adjustment in production economics due to lower ethylene prices. The ethylene July contract fell by Eur95/mt to settle at Eur1,090/mt FD NWE. However, the tightness in MEK more than offset the decrease upstream, with one source claiming supplies were still very limited. A second producer said discussions for FD NWE parcels were happening between Eur1,900-1,950/mt, while another claimed to have sold product at Eur1,960/mt FD NWE. While in previous weeks sources argued high prices were eroding MEK demand and leading companies to seek for alternative

Acetone

Northwest Europe
Acetone prices fell by Eur40/mt FD NWE this week following sharp reductions on feedstock prices and rising inventories which put heavy pressure across the solvents chain in July. Suppliers are pressing to sell more product

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feedstocks, market participants claimed all possible substitution have already happened and high values were a mere a function of tight supplies. Despite that, one source said the situation in Asia had gotten better. Ive been hearing that inventory levels [there] are higher and many people are asking themselves if they had overreacted [after the March 11 earthquake] and oversold. Maybe they have full tanks now and dont really need that amount of product, pointing to a more relaxed supply/demand situation in the near term. In MIBK, where very little substitution can be made, prices were also said to be under pressure from a drop in feedstock naphtha. However, deals reported this week did not show any decreases in FD NWE fixtures, leaving the assessment unchanged.

said, noting producers were eager to discharge the biggest amount of product possible ahead of further price decreases. I think prices will keep falling in the coming two weeks, he said.

United States
Good demand and tightness in the ethyl acetate market was keeping prices in the export and domestic markets stable for the week, sources said Tuesday. Buyers reported good demand with some tightness and no production issues. Traders reported seeing exports to Europe to offset the impact of INEOS force majeure declaration, which had decreased the allocation rate for July to 65% for contract customers. The force majeure was expected to last 80 days June 10. In pricing news, Celanese, Eastman and Sasol announced price increases of 5 cents/lb effective July 1, with market participants saying there was good chance the hikes would be implemented because of good seasonal demand from the coatings market and because availability was expected to get tight. In feedstock acetic acid, the prices were stable as buyers reported a balanced market. Ethanol 190 proof remained flat at 445 cents/gallon, although producers announced price increases of 25-30 cents/gallon effective July 1.

United States
MEK prices for the export and domestic markets remained firm Tuesday on improved availability after having increased $220/mt in June. Buyers reported US suppliers ExxonMobil, Shell Chemical and Sasol were on sales controls, which were expected to last through the third quarter. According to market participants, the availability was better as there were imports coming from China. Also, some end users had switched formulations to lesser costly solvents. However, traders reported spot product for export remained hard to get and there was still a gap of 5-10 cents/lb between spot and contract prices. For MIBK, the prices held steady for the week based on good seasonal demand and no supply issues, sources said. Producers Celanese and Eastman announced price increases of 3 cents/lb effective July 1, with the distributors saying they were not expecting the increase to be implemented as the market remained well balanced. In feedstock acetone, the price to the solvents and distribution markets came down to 73 cents/lb.

Butyl Acetate

Northwest Europe
Butac prices dropped to Eur1,340-1,350/mt FD NWE this week on weak feedstocks, despite healthy demand, according to one source said. A Germany-based distributor argued he expected prices to fall quicker than they have in the past two weeks, owing to a significant drop in the July propylene contract of Eur75/mt. Butanol producers however, were reported offering a maximum decrease of Eur30/mt for iso-butanols and Eur20/mt for normal butanols. Sources said butac was facing a similar situation to other solvents, with customers buying product hand-to-mouth on expectation of a deeper fall in spot prices.

Ethyl Acetate

Northwest Europe
Ample supplies of spot etac had so far offset the impact of Ineos force majeure at its Hull, UK, unit, sources said. Ineos acetic acid supplier BP Chemicals extended its force majeure at Hull for another 30 days, it said last Friday. The force majeure will now last for 80 days beginning June 10, a BP spokesman said. Ineos could not be reached to comment whether the etac force majeure would also be prolonged. In the truck market, prices were relatively stable compared to last week. Distributors reported deals at Eur1,110-1,120/mt FD NWE, Eur5/mt down from the previous week. The same distributors said despite the force majeure, it was still fairly easy to secure product. I just spoke to a supplier 30 minutes ago and he asked me if I could get some extra volume this week, one distributor

United States
Butyl Acetate remained stable this week amid good demand from the export and domestic markets, sources said. Market participants said availability remained tight amid allocations from two US suppliers, as Oxea and Eastman were on 100% sales control based on good seasonal demand. Traders said they expected the prices to come down based on lower value for feedstock butanol, which has decreased by $75/mt, reflecting a fall in propylene costs. For June, chemical-grade propylene settled 15 cents lower at 80.5 cents/lb, with the spot last assessed around 73-74 cents/lb going into July.

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Chlorinated Solvents and Chlor-Alkali

Northwest Europe
European caustic soda Q3 contract negotiations were still ongoing this week, with the Eur40-50/mt ($58-72/mt) increase ideas giving way to that of more modest Eur1020/mt ones. However, sources described a two-tiered market in Europe, seeing a pronounced differential between Northern and Southern Europe. The situation for Q3 [contracts] is still open, a rollover or slight increase maybe possible, an NWE source said. Another NWE source agreed, adding: I have settled some initial contracts between a rollover and a Eur10-20/mt increase. This would put the NWE CP around Eur410-420/mt FD. These initial agreements were yet to be corroborated by the rest of the market. Meanwhile in the Southern Europe, a source reported a very different picture saying that although I havent settled any business yet, I expect the contract price to see a Eur20/mt decrease in Southern Europe. The disparity in terms of contract prices was mainly attributed to the demand levels, sources said, seeing a more buoyant market in the NWE, when compared to the South. In the spot market, an NWE producer reported receiving a number of transatlantic queries around the $380-390/mt FOB NWE level. Nevertheless, he added that it was not possible to positively answer any of these, as there was little prompt material available as demand in NWE is good. However, some sources reported this and last week that they had no interest in selling any volume below the Eur310-320/mt FOB NWE level ($448-463/mt - close to last weeks FOB US Gulf). In the Med, FOB prices were heard softening to a $330-340/mt level. Meanwhile in the US, caustic prices were heard stable despite a supply reported as slightly tight, owing to a few planned turnarounds, some sources said. US buyers were heard to have the option of importing volume from Asia. Meanwhile in Asia, prices were assessed flat this weekat $449/mt FOB Northeast Asia and $501/mt CFR Southeast Asia as Chinese product continued be easily available. On the other side of the chlor-alkali chain, demand for chlorine from PVC applications continued to suffer according to sources. Downstream, PVC demand remained weaker in the South, sources said, reporting sustained slower volume off-take there. NWE demand remained steady and was described as decent by sources. Demand in May was excellent, a bit less so in June, a trader said. Meanwhile, an NWE converter reported seeing a year-on-year drop in volume intake. Going forward into July, sources were heard indicating that market fundamentals would determine the extent to which prices would react to feedstock ethylene decrease in July.

and sluggish PVC demand, US spot chlorine export prices remained steady. The 3-to-30 day assessment was at $245/st FOB. After producers succeeded in implementing their $60/st price increase for June contracts, the offer and demand balance in the chlorine market was characterized as stable. In production, US Formosa Plastics expected to start operating its new chlor-alkali and ethylene dichloride capacities in Point Comfort, Texas, by mid-July, a company source told Platts. After its 25% expansion capacity the total production of the chloralkali plant will be 200,000 st/year. Meanwhile, an additional 25% capacity to produce EDC will translate into 280,000/mt tons per year, the source said. Downstream, US PVC export market was in a bearish mode as offer ideas were talked close to $1,000/mt FAS Houston, while notional buy ideas were heard at $950980/mt FAS Houston. Meanwhile, EDC prices were flat on a week-over-week basis. Sources said that the US EDC market would be longer due to the slowdown in the PVC market and the gradual stable supply situation in Japan and Brazil. Caustic Soda: US caustic soda manufacturers continued pushing for a July price hike on the back of tight supply and some planned turnarounds. However, thin buy interest kept US caustic soda prices stable this week. The price was assessed at $450/mt FOB USG. Last week, US producer Dow announced a $35-50/mt price increase to be implemented in August, even though the $60 price hike that other producer posted in May was still in negotiations. According to some traders, producers will have some difficulties to implement additional price increases as buyers will start seeking more competitive prices in Europe and Asia. However, producers said firm demand from pulp and paper, alumina, and textile industries, mainly from Latin American countries, were expected to remain strong the rest of the year.

Asia
The FOB Northeast Asia caustic soda price was assessed flat Tuesday from a week earlier at $448/mt, while the CFR Southeast Asia price was assessed at $501/mt, also unchanged from the previous week. Sentiment across Asian petrochemical markets firmed this week as concerns of economic crisis in Europe eased after Athens agreed to austerity measures that meant Greece could avoid default a situation many feared could have led to another global financial shock. The news sparked some active buying in Asian petrochemical markets, which pushed up prices of Asian polymers such as PVC. Amid this, Asian caustic soda producers also turned bullish this week and raised their offers to $500/mt FOB NEA, from $450/mt heard the previous week. But no active spot buying was seen in the Asian caustic soda market, with bids still hovering at $420-430/mt FOB NEA. The market sentiment [of Asian petrochemical markets] has improved this week. But buyers [of caustic soda] were reluctant to buy spot cargoes actively,

United States
Chlorine: Despite additional chlor-alkali capacities that are expected to start during the second half of the year,

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considering the current firmness would be short-lived, a trader said. Asian caustic soda producers also elected not to reduce their offers from $500/mt FOB NEA due to tightening supply amid turnaround season. In China, Tianjin LG Bohai plans to shut its 240,000 mt/year caustic soda plant in Tianjin mid-July for 10 days of annual maintenance. In Indonesia, PT Asahimas Chemical shut its 150,000 mt/year caustic soda plant in Anyer July 1 for annual maintenance until early August. In addition, operating rates at Formosa Plastics 1.09 million mt/year caustic soda unit in Mailiao remained low Tuesday, as the companys 720,000 mt/year vinyl chloride monomer plant remained shut. Formosa was ordered to shut the VCM plant June 12 by the government due to environmental concerns. Some market sources were speculating the VCM plant would be restarted sometime in July, but an official restart date was still unclear. In related news, Japans caustic soda production in May rose 1.8% from a year earlier to 328,591 mt, the Japan Soda Industry Association said last Thursday. Japans caustic soda exports in the month amounted 12,744 mt, plunging 77.1% from a year earlier. Caustic soda inventory as of end May rose 23.9% year on year to 137,109 mt. In China, Shanghai Chlor-Alkali Chemical plans to expand its caustic soda production capacity by 180,000 mt/year from 700,000 mt/year at its plant in Shanghai by year end.

such as the supply chain disruption following the March 11 earthquake in Japan, are in part responsible for the lackluster world economic growth in the second quarter of this year," Standard & Poor's chief economist for Europe Jean-Michel Six said in a report. "And other, longer-lasting trends have also surfaced, such as flagging consumer demand in developed markets and a slowdown in emerging markets following tighter monetary policies." Despite this, Standard and Poor's, which, like Platts, is a member of The McGraw-Hill Companies, said emerging markets would continue to be a major driver of global growth. According to its baseline forecast, which factored in sluggish consumer spending, S&P said that based on anticipated continued growth in emerging markets it expects positive world GDP growth, albeit subpar by historical standards, for the rest of this year and in 2012.

Vitol's Coastal Caverns plans Beaumont, Texas, LGP export facility

New York Vitol Group subsidiary Coastal Caverns said it plans to develop a new export facility in conjunction with an LPG storage facility that is under development in Beaumont, Texas. Mike Loya, head of Vitol Inc., the North American subsidiary of the Vitol Group, said in a statement the export facility will provide capacity to supply "multiple international markets." The export project will include storage capacity for up to 6 million barrels of domestic and international grade propane as well as a processing facility capable of handling as much as 100,000 b/d, according to the statement. The first phase of the project will be designed to treat and export up to 3 million mt of propane per year, with a potential second phase that will allow for up to 6 million mt per year. The company has permits for up to 24 million barrels of liquids storage capacity. Development of CCI's propane facility began earlier this year with a targeted completion date of the first quarter of 2013.

Ethanol

United States
Ethanol prices moved higher this week after the successful implementation of a Q3 price increase. Sellers were able to push through a 25-cent/gallon price hike for the third quarter, bringing the 190 price to 470 cents/gallon FOB DSP and the 200 price to 495 cents/gallon FOB DSP. Meanwhile, demand was characterized as stable amid snug supply. In feedstocks, prices saw a bump Tuesday as CBOT corn futures opened the day 25 cents higher at $6.68/bushel. The gains were attributed to a general market correction, supported by increased spot buying interest from Asia. In fuel-grade ethanol, prices were heard at 270 cents/gallon, up more than 5 cents from close of business Friday.

June US ethylene CP settles down, matches market expectations

The US ethylene contract price for June settled lower as expected, down 1.75 cents to 56.75 cents/lb, two market sources said Tuesday. The price represented a roughly 3% drop from May's contract, which was at 58.50 cents/lb. Market sources had expected a 1- to 2-cent drop in the June contracts because of falling spot prices and continued weak demand from downstream markets, particularly polyethylene. It was a trend first seen in May, when the contract settled up just 1.25 cents/lb higher than April despite spot ethylene averaging 66.50 cents/lb for the month, according to Platts data. Spot ethylene in June averaged north of 62.25 cents/lb, although it has shed more than 8 cents over the past two weeks. The lower settlement marked the first time since January 2011 that the contract market saw downward movement in the price,

News Briefs

Developed markets to avoid double-dip recession: S&P

London Despite recent economic data suggesting the global economic recovery has hit a soft patch, ratings agency Standard and Poor's said Tuesday developed markets would avoid a double-dip recession with emerging markets driving growth. "Temporary factors,

Copyright 2011, The McGraw Hill Companies

PLATTS SOLVENTSWIRE

JULY 5, 2011

according to Platts data. January was settled at 45.25 cents/lb, down 3.25 cents from December. On Tuesday, July bids were heard at 54.50 cents/lb against no offers. Ethylene was last assessed Friday on either side of 55.375 cents/lb

Subscriber Note
Subscriber note: Platts to reorganize PCA news headline summaries Platts proposes to reorganize the way news headlines are captured and summarized for readers of Platts Petrochemical Alert (PCA). With effect from July 25, 2011, all news stories will be published on PCA page 100. Readers interested in viewing all current headlines will be able to filter headlines using fixed page 100 as the principal filter, or simply by filtering PCA pages using the "N" category code available on most vendors. Viewing headlines this way will allow readers to more easily, and more immediately, click through to each underlying news story. As part of this change, Platts is retiring PCA pages PCA001-0017, which currently stack headlines in a static format. Platts will also suspend PCA pages 18-50, 120-159 and 465-500, which currently carry individual news stories on a rolling publication cycle. For more information, please contact us at support@platts.com copy petchems@platts.com. Subscriber note: PCA 115 replaces PCA 100 US solvents plant page The current Platts US Solvents Plant Operations page PCA 100 will be replaced by PCA 115, with immediate effect. The replacement is ahead of the proposed reorganization of the way news headlines are captured and summarized for readers of Platts Petrochemical Alert (PCA). With effect from July 25, 2011, all news stories will be published on PCA page 100. (Please see subscriber note PCA 1522 published on June 21, 2011 at 1013am EDT/1413 pm GMT) For more information, please contact us at support@platts.com copy petchems@platts.com.

Strong PET demand enables full operating rates in NWE

London Three European polyethylene terephthalate producers said this week that PET demand in Europe is strong enough that they are producing at full capacity and selling everything they produce. "We are running flat out, the highest possible production rate and we don't have stocks," one producer said. Last month one producer said he was concerned that the start up of the new 240,000 mt/year Alco Naphtha PET plant in Kaliningrad and the restart of the 175,000 mt/yr PET plant in San Roque, Spain by Cepsa could make established producers consider limiting production. But on Monday another producer said overcapacity in European PET was not a new phenomenon and now there is enough demand to maintain all PET producers. "We are running at full capacity... everybody is running at full capacity, so the demand is strong enough to support the new plants and the existing plants," the producer said. A third producer who also said he was running at full production rates, said the current PET market was balanced and prices were stabilizing between Eur1,300-1,350/mt FD NWE and he expects spot prices will remain in that range throughout the summer. "It will be a sort of a constant market from now on," he said.

Solventswire

Volume 34 / Issue 27 / July 5, 2011

Editorial: Sydney +61-2-9255-9842. Singapore +65-6530-6584. Tokyo +81-3-3593-8831. London +44-20-7176-6264. New York +1-212-904-4174. Houston +1-713-658-3206. Client services information: North America: 800-PLATTS8 (800-752-8878); direct: +1-212-904-3070 Europe & Middle East: +44-20-7176-6111 Asian Pacific: +65-6530-6430 Latin America: +54-11-4804-1890, E-mail: support@platts.com

Copyright (c) 2011 The McGraw-Hill Companies. All rights reserved. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed without prior written authorization from Platts. Platts is a trademark of The McGraw-Hill Companies Inc.Information has been obtained from sources believed reliable. However, because of the possibility of human or mechanical error by sources, McGraw-Hill or others, McGraw-Hill does not guarantee the accuracy, adequacy or completeness of any such information and is not responsible for any errors or omissions or for results obtained from use of such information. See back of publication invoice for complete terms and conditions.

Copyright 2011, The McGraw Hill Companies

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