CMAI Asia - Light - Olefins - Monthly Analysis (10th Nov. 2011)

ASIAN MARKET REPORT LIGHT OLEFINS
November 10, 2011 / Issue No. 047

Jinsu Yim Samuel Liew Aaron Cheong Kelly Lu Vince Sinclair Ashish Pujari Eddie Kok N. Ravivenkatesh
MONTHLY ANALYSIS
(Olefins, Asia) (Olefins, Asia) (Olefins, Asia) (Client Services) (Styrenics, Asia) (MEG, Asia) (Vinyls, Asia) Jinsu.Yim@ihs.com Samuel.Liew@ihs.com Aaron.Cheong@ihs.com Kelly.Lu@ihs.com vince.sinclair@ihs.com ashish.pujari@ihs.com eddie.kok@ihs.com +(65) 6501-1535 +(65) 6501-1534 +(65) 6501-1518 +(65) 6501-1510 +(65) 6501-1537 +(65) 6501-1540 +(65) 6501-1536 +(65) 6227-2758
20 McCallum Street # 17-01 Tokio Marine Centre Singapore 069046 Telephone: (65) 6226-5363 Fax: (65) 6226-5157 www.cmaiglobal.com
(Purvin & Gertz, Asia Naphtha) nravi@purvingertz.com
Subscriber Notes: As part of CMAIs continuous improvement efforts, we have updated two new charts on page 7 of the AMRLO Monthly Analysis report to reflect the production economics of an integrated ethylene cracker (with both butadiene and BTX extraction units) in NE and SE Asia. We believe that this will further add value to our customers in view of the current economic conditions.
CONTENTS/LINKS Asia Olefins Price Settlement

- Focus CMAIs 2012 World Light Olefins Analysis - Graphical Analysis Monthly Ethylene Price Forecast Monthly Propylene Price Forecast Annual Olefins Forecast Olefins Production Costs Energy & Feedstock Costs Ethylene Supply/Demand Balances Propylene Supply/Demand Balances Ethylene Trade Statistics Propylene Trade Statistics - Data Table Asia Olefins Price Forecast Table New Olefins Capacity In Asia 2011 Ethylene Plant Operating Schedule 2011 On-Purpose Propylene Plant Operating Schedule Ethylene Quarterly Supply/Demand (Latest Update as of October) Propylene Quarterly Supply/Demand (Latest Update as of October) Ethylene Net Equivalent Trade Table 14 15-17 18-20 21 22-23 24-25 26 5 6 7 8 9 10 11 12 13 3-4 2
Propylene Net Equivalent Trade Table 27 - Graphical Analysis (PowerPoint Version) For graphical analysis in MS PowerPoint format, log on to http://www.cmaiglobal.com with your username and password, and proceed to the "AMRLO report download section". If you need further assistance, please contact Kelly Lu at kelly.Lu@ihs.com This report is for the exclusive use of the client company. Distribution outside of the client company is strictly prohibited without the prior written consent of Chemical Market Associates, Inc. (CMAI).
The prices presented herein are strictly the opinion of CMAI and are based on information collected within the public sector and on assessments by CMAI staff. CMAI MAKES NO GUARANTEE OR WARRANTY AND ASSUMES NO LIABILITY AS TO THEIR USE.
Copyright CMAI 2011. All Rights Reserved. 2011
Asian Market Report Light Olefins

October 2011 Asia Olefins Price Settlements
CMAI ACP is an unbiased third-party olefins contract price reference that preserves the economic interest of both producers/sellers and consumers/buyers, and minimizes pricing risks by ensuring an equitable distribution of olefins and derivative margins, taking into consideration the average production cash cost of olefins producers and the average affordability of olefins consumers. CMAI ACP is derived from CMAIs production cash cost model for olefins (ethylene/propylene production cash cost) and CMAIs production cost model for olefins derivatives (olefins affordability). CMAI ACP is the price at which chain profitability of olefins and derivative producers is split according to the proportion of capital investment for their respective production units. Please refer to May/August 2008 issue of AMRLO Focus for more information Energy & Feedstock Crude Oil WTI Naphtha C&F Japan Propane CIF Japan Gas Oil C&F Japan Hydrogen NE Asia Est. SE Asia Est. Methane Fuel NE Asia Est. SE Asia Est. Crude C4 Asia Pacific
86 884 797 932
$/bbl $/ton $/ton $/ton
Crude Oil Brent Naphtha FOB Sin Butane CIF Japan Gas Oil FOB Sin
109 96 865 123
$/bbl $/bbl $/ton $/bbl
2,135 2,096 836 820 1,094
Ethylene Production Costs Naphtha NE Asia 1,161 Naphtha SE Asia 1,137 LPG NE Asia 1,111 LPG SE Asia 999 Gas Oil NE Asia 1,660 Ethane SE Asia 495 Wtd Avg Asia 1,118 Propylene Production Costs *Cracker NE Asia 1,209 *Cracker SE Asia 1,195 Splitter NE Asia 900 Splitter SE Asia 879 PDH NE Asia 1,044 PDH SE Asia 1,026 Metathesis NE Asia 1,122 Metathesis SE Asia 1,024 Wtd Avg Asia 1,064
Ethylene NE Asia CFR NE Asia FOB SE Asia CFR SE Asia FOB Propylene NE Asia CFR NE Asia FOB SE Asia CFR SE Asia FOB
1,063 1,039 1,041 1,021 1,351 1,326 1,354 1,308
Pygas NE Asia CFR SE Asia CFR Fuel Oil 180 cst C&F Japan FOB Sin
808 793 672 659
Ethylene Affordabilities PE (LLDPE) 1,049 Styrene 995 MEG 1,583 VCM 1,347 Wtd Avg Asia 1,155
Propylene Affordabilities PP (Homopoly) 1,132 Acrylonitrile 1,188 Phenol 1,753 2-Ethylhexanol 1,359 N-Butanol 1,368 Wtd Avg Asia 1,200
CMAI Asia Contract Price (ACP) Ethylene Propylene Sep-11 1,203 1,205 History Oct-11 1,145 1,131 Settled Nov-11 1,150 1,067 MTD Dec-11 1,175 1,178 Forecast
Prices are in U.S. Dollars Per Metric Ton, unless otherwise stated *Production costs based on per ton C2 & C3
Page 2

CMAIs 2012 World Light Olefins Analysis
Focus
The following is an extract from CMAIs 2012 World Light Olefins Analysis, which was compiled to provide clients with a historical perspective of the global light olefins market, and also to analyze and predict the changes in the global market for light olefins and the associated derivatives over the next five years. Areas covered in this analysis include capacity, supply, demand, trade, prices, production costs, profitability and technology. Economic outlook, energy growth forecast and price projections provide the basis for forecasts of supply/demand fundamentals and production economics. Complementing the forecasts are assessments of historical and current market developments by country and region, with a focus on strategic issues such as cost competitiveness, trade flow, and production/consumption growth. Comprehensive datasets covering the period from 2006 to 2016 present economic developments, market share, technologies, capacities, prices, supply, demand, and trade on a country level to support the conclusions. Introduction The 2012 World Light Olefins Analysis is intended to provide clients with a general overview of the global supply and demand trends for light olefins markets, as well as a more detailed examination of key market issues that, in CMAIs opinion, will have a significant strategic impact on ethylene and propylene markets over the next five years. In this write-up, we will focus on some of the key themes and issues from the 2012 World Light Olefins Analysis that will have an impact on the future of the global olefins market. Global Economic Growth
World Light Olefin GDP Elasticity
Elasticity (Demand/GDP Ratio) 6.0 Forecast
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0 -3.0 -4.0
Global demand for ethylene and propylene has historically grown at a multiple of world gross domestic product (GDP) growth. However, the relationship between olefin demand growth and economic growth is becoming more ambiguous, since many products produced by olefin end-users are increasingly being used for less cyclical non-durable applications. This is resulting in lower multiples to GDP growth, particularly in developed countries. In addition, the olefin demand to GDP elasticity is diluted by the increasing influence of the services sector on GDP growth and the correspondingly lower impact of manufacturing.
The 2011 to 2016 forecast anticipates ethylene demand and propylene demand to grow at an average rate of 1.0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 and 1.2 times GDP, respectively. Compared to the past Ethylene Propylene ~ 20 years, the spread between propylene and ethylene demand growth rates will become increasingly narrow. Historically, when propylene prices were discounted versus ethylenethereby making propylene derivatives more competitive than ethylene derivativesit was common for propylene demand growth to far outpace ethylene demand growth on a global basis. Alternative Economic Growth Scenarios Will Have a Large Impact on Market Outlook Ethylene demand growth projections are based on CMAIs long-term GDP forecast. The main scenario anticipates global GDP growth of 3.8 percent on average between 2011 and 2016. Based on a GDP elasticity of around 1.2, when averaged over the next five years, ethylene demand is expected to expand at a rate of 4.3 percent, while operating rates should reach 90 percent by the end of the forecast period.
World Ethylene Supply and Demand Scenarios

Million Metric Tons 180.0 5-year Global GDP Growth Cases 160.0 Base Assumption: 3.8%/yr Optimistic Case: 4.8%/yr 140.0 Pessimistic Case 2.8%/yr 120.0 100.0 80.0 60.0 90.0 85.0 80.0 75.0
Percent 105.0
Forecast 100.0 95.0
Deviations in the pace of global economic growth from CMAIs main scenario, all else being equal, would lead 20.0 to corresponding changes in ethylene demand growth 0.0 70.0 trends, which would in turn either lower or raise average 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 plant utilization. A one percent deviation either up or Base Demand Optimistic Demand down from CMAIs main GDP forecast scenario would Pessimistic Demand Base Operating Rate Optimistic Operating Rate Pessimistic Operating Rate ~ result in a 1.2 percent increase or decrease in average annual ethylene demand growth rates. By 2016, ethylene demand volumes would be 8.4 million metric tons lower in the pessimistic case compared to the base assumption. Conversely, they would be almost 8.8 million metric tons higher in the optimistic case if global GDP expands one percentage point faster than assumed in the base assumption.
40.0
Page 3

Energy Price Trends
Dollars per MMBtu Gas as % of Crude
Focus
The Divergence in Energy Prices is Creating Regional Opportunities
Ethylene production costs are mostly determined by underlying feedstock prices derived from either 18 natural gas (ethane, butane and propane) or crude oil 100% 16 (naphtha and gas oil). While steam crackers in West Europe and Asia are mainly naphtha-based, ethylene 14 80% production in the Middle East and North America, 12 as well as parts of SE Asia and South America, 10 60% uses mainly ethane-based feedstocks. Therefore, 8 changes in the price of natural gas relative to crude 40% 6 oil determine the competitiveness of producers, countries and whole regions. The recent shift in 4 20% global crude oil market dynamics and changes in the 2 Middle East Natural Gas Prices energy markets in North America have dramatically 0 0% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 changed the competitiveness of different regions. The current advantage of ethane-based production Crude (WTI) Natural Gas Gas as % of Crude ~ in North America is based on ample supplies from shale developments and growing demand for crude oil, particularly in developing economies. The focus of future ethylene capacity additions has thus shifted back to North America.
20 120%
Ethylene Derivative Demand is Centered in Asia

Equivalent Ethylene Consumption By Major Region
Forecast 70 60 50 40
30
Million Metric Tons 80
2010 Consumption (kg/capita): North America = 54 West Europe = 51 Asia = 15 Middle East = 22
Growth in ethylene derivative consumption will be mainly driven by the rapid economic development in Asiaparticularly in China and increasingly also in India. Today the Asian region, including SE Asia, NE Asia and the Indian Subcontinent, accounts for an estimated 45 percent of the global ethylene equivalent consumption contained in derivatives. Asias share is expected to increase steadily as economic growth is expected to be modest in North America and West Europe, the other major consuming regions. Propylene and Ethylene Prices Forecast to Remain Closer Compared to Historical Levels
20 10 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 North America Others West Europe Middle East Asia South America
Steam Cracker Propylene By-Product Values

Ratio 1.50 Forecast
1.40 1.30 1.20 1.10 1.00 0.90 0.80 0.70 0.60 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

U.S. P/E Ratio Europe P/E Ratio Asia P/E Ratio
Propylene demand typically has grown slightly faster than demand for ethylene. The faster pace stemmed mainly from higher consumption rates by polypropylene, propylenes largest derivative, when compared to polyethylene, which dominates ethylene demand. However, as propylene prices have increased relative to ethylene prices, demand growth for polypropylene has slowed in comparison to polyethylene. In the future, the propylene to ethylene (P/E) price ratio is expected to remain close to 1.0, suggesting that the rate of demand growth for ethylene and propylene will be more closely aligned than in the past. The 2012 World Light Olefins Analysis is now available in both book and CD-ROM format. To order, please contact Ms Kelly Lu at (65) 6501-1510 or via email at kelly.lu@ihs.com.
Page 4
Monthly Ethylene Price Forecast
Monthly Ethylene Price Forecast: In Asia, the majority of crackers suffered from negative margins in October due to low ethylene prices and surging energy and feedstock values in line with sharply decreasing by-product prices. Chinas tightened credit policy has been hampering downstream demand, while stable-to-high cracker running rates in the Middle East have been ensuring sufficient monomer and polymer supplies in Asia. Some crackers in Asia started to reduce their operating rates in October and further rate reductions are expected in November. Compared with stable cracker operations in other Middle Eastern countries, Iran faced feedstock restrictions for much of October. Many crackers in Iran were impacted by those restrictions with low running rates; however, export volumes should once again increase in November as availability improves. Ethylene prices in Asia have almost bottomed out around $1,000 per metric ton CFR Asia as producers in many countries have started to reduce running rates. Prices are forecast to remain around the current levels, with small rebounds expected at the end of November or in early December.
Northeast Asia Spot Ethylene Cash Cost and Margin
Low Severity Full Range Naphtha
Dollars Per Metric Ton 2,000 Forecast 1,600 1,200 800 400 0
1,600
Southeast Asia Spot Ethylene Cash Cost and Margin

Dollars Per Metric Ton
Low Severity Full Range Naphtha
2,000
Forecast
1,200
800
400
-400 Jan-10
Jul-10
Fixed Net Feedstock
Jan-11
Jul-11
Variable Price CFR
Jan-12
Jul-12
-400 Jan-10
Fixed
Jul-10
Jan-11
Jul-11
Variable Price CFR
Jan-12
Jul-12
Net Feedstock
Month-to-date Cash Margin
Month-to-date Cash Margin
Asia Ethylene Spot Prices

Dollars Per Metric Ton 2,100
Asia Ethylene Contract Prices
Forecast
1,800
1,800
Forecast
1,500
1,500
1,200
1,200
900
900
600
600
300 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
300 Jan-10
Jul-10
NEA CFR
Jan-11
Jul-11
NAM Pipeline
Jan-12
WEP CIF
Jul-12
Thailand - Map Ta Phut
Taiwan - CPC
S.Korea - Ulsan
CMAI ACP
NE & SE Asia Ethylene CFR Price Spread

Dollars Per Metric Ton 1,750 Forecast 1,500 300 Spreads, Dollars Per Metric Ton 400
Ethylene and LLDPE Price Spreads

2,500
Forecast
2,000
1,250
200
1,500
1,000
100
1,000
750
500
500
-100
250 Jan-10
-200 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

SEA CFR Spot Price
-500 Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
SEA CFR - NEA CFR
NEA CFR Spot Price
PE-C2 Spreads
Ethylene CFR NEA LLDPE Non-Integrated Cash Margin
LLDPE Butene CFR China
Page 5
Monthly Propylene Price Forecast
Monthly Propylene Price Forecast: Propylene prices in Asia fell further in October amid a worsening global economy and weak downstream demand. In addition to excess regional cargoes caused by reduced derivative operating rates, deep-sea cargoes weighed on already weak sentiments in various regions. Increasingly negative cracker margins in Asia forced many crackers to reduce their running rates to below 90 percent in October, and further rate cuts have been announced since the beginning of November. The propylene balance turned long to balanced with no more cargoes expected from Europe and reduced cracker operations in Asia; however, demand is not expected to recover soon. Prices in Asia have not yet bottomed out, but they are unlikely to drop below $1,200 per metric ton CFR Asia. High cost pressure will support low-end prices around $1,200 per metric ton CFR Asia, with prices expected to rebound to above $1,300 per metric ton in November or early December. However, with the year-end approaching, cracker operators will try to reduce their inventories before the end of December and this will cap the price rebound.
NE & SE Asia Propylene/Ethylene Ratio
1.5 Forecast 1.4 1,600 2,000 Forecast
NE Asia Propylene Cash Cost and Margin

1.3 1,200
1.2
800
1.1 400 1.0 0 0.9 0.8 Jan-10 -400 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Naphtha Cracking Cash Cost (per ton C2 & C3) Propylene CFR NEA
P/E Ratio NEA CFR
P/E Ratio SEA CFR
Cash Margin
Asia Propylene Spot Prices

Dollars Per Metric Ton 2,400 Forecast 2,100 1,800
1,500
1,800 Dollars Per Metric Ton 2,100
Asia PG Propylene Contract Prices
Forecast
1,500
1,200
1,200
900
900 600 300 Jan-10

600
Jul-10
NEA CFR
Jan-11
Jul-11
NAM Pipeline
Jan-12
WEP CIF
Jul-12
300 Jan-10
Jul-10
Jan-11
Jul-11
Taiwan - CPC
Jan-12
CMAI ACP
Jul-12
Thailand - Map Ta Phut
NE & SE Asia Propylene CFR Price Spread

Dollars Per Metric Ton 2,100 Forecast 1,800 300 Spreads, Dollars Per Metric Ton 400
Propylene and PP Price Spreads

Forecast
2,000 1,500 1,000
1,500
200
1,200
100
900
500
0 -500 Jan-10
600
-100
300 Jan-10
-200 Jul-10 Jan-11 Jul-11

NEA CFR Spot Price
Jan-12
Jul-12
SEA CFR Spot Price
Jul-10
PP-C3 Spreads
Jan-11
Jul-11
Jan-12
Jul-12
SEA CFR - NEA CFR
PG Propylene CFR NEA PP Non-Integrated Cash Margin
PP Homopolymer CFR China
Page 6
Annual Olefins Forecast
Annual Olefins Forecast: The new baseline GDP forecast now includes the assumption of a mild recession in the eurozone extending from 4Q 2011 to 1Q 2012. The recession will be triggered by the ongoing European debt crisis and the inability of policymakers to avoid a Greek default as Greece continues to miss its financial targets. Downward revisions of regional GDP growth not only for Europe, but also for other regionsparticularly for the next two quartershave resulted in lower global rates, now estimated at 2.8 percent for 4Q 2011 and 2.5 percent for 1Q 2012. The 3.0 percent global GDP growth forecast for the full year 2012 now matches the 2011 rate, but growth is still expected to accelerate to 3.8 percent by 2013 as a more solidly based recovery gains traction. Based on Purvin & Gertzs latest naphtha supply/demand fundamentals and crude oil forecast, naphtha price projections have been adjusted to an average of $948 per metric ton CFR Japan for 2011 and $969 per metric ton CFR Japan for 2012. Correspondingly, our Asian naphtha cash cost projections based on Purvin & Gertzs energy and feedstock forecasts are at an average of $1,038 per metric ton for 2011 and $1,230 per metric ton for 2012.
NE Asia Ethylene Cash Cost and Margins

SE Asia Ethylene Cash Cost and Margins

Dollars Per Metric Ton 1,800 Forecast 1,600 1,400 1,200
1,800
Forecast 1,600 1,400 1,200 1,000 800
1,000
800 600 400 200 0 -200 2006 2007 2008 2009 2010 2011 2012
Variable Ethylene SEA CFR Spot
600
400 200 0 -200 2006 2007 2008 2009 2010 2011 2012
Variable Ethylene NEA CFR Spot
2013
2014
2015
2016
2013
2014
2015
2016
Net Feedstock Fixed Cash Margins (Naphtha)
Net Feedstock Fixed
Cash Margins (Naphtha)
P/E Ratio
1.30 1.25 1.20 1.15
NE & SE Asia Propylene/Ethylene Ratio

Forecast
1,800
NE Asia Propylene Cash Cost and Margins

Dollars Per Metric Ton Forecast
1,500
1,200
1.10 1.05 1.00
900
600
0.95 0.90 0.85 0.80
300
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Naphtha Cracking Cash Cost
Propylene NEA CFR Spot Price
P/E Ratio NEA CFR
P/E Ratio SEA CFR
Cash Margin
Northeast Asia Spot Ethylene Cash Cost and Margin

Dollars Per Metric Ton 2,000 1,600 1,200 800 400 0
Integrated Naphtha Cracker (BDE/ BTX)
Southeast Asia Spot Ethylene Cash Cost and Margin

Dollars Per Metric Ton 2,000 1,600 1,200 800 400 0
Integrated Naphtha Cracker (BDE/ BTX)
Forecast
Forecast
-400 Jan-10
Jul-10
Net Feedstock Fixed Price CFR
Jan-11
Jul-11
Jan-12
Jul-12
-400 Jan-10
Jul-10
Net Feedstock Fixed Price CFR
Jan-11
Jul-11
Jan-12
Jul-12
Variable Month-to-date Cash Margin
Variable Month-to-date Cash Margin
Page 7
Olefins Production Costs
Olefins Production Costs: Global petroleum prices rallied strongly in October, with WTI increasing nearly $20 per barrel and Brent increasing just below $15 per barrel throughout the month. Despite the strong price movement, WTI and Brent prices ended the month averaging just above $85 and $109 per barrel, respectively. As a result, the spread between Brent and WTI narrowed, with the monthly average spread at just under $24 per barrel. Based on Purvin & Gertzs forecasts for December 2011 and January 2012, naphtha prices are expected to be $934 and $937 per metric ton CFR Japan, respectively, which translates into naphtha cracking production cash cost of around $1,328 per metric ton for December and $1,286 per metric ton for January. Based on CMAIs latest forecast, integrated cracker (with butadiene and BTX extraction units) margins are expected to recover by 1H 2012, much earlier than standalone cracker margins.
NE Asia Ethylene Production Cash Cost
1,800
SE Asia Ethylene Production Cash Cost

Forecast
1,500
Forecast
1,500
1,200
1,000
900
600
500
300
0 Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
0 Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Wtd Avg
Naphtha
LPG
Gasoil
Wtd Avg
Naphtha
LPG
Ethane
NE Asia Ethylene Production Cash Cost

Dollars Per Metric Ton 2,000 Forecast
1,400 1,600
NE Asia Propylene Production Cash Cost

Dollars Per Metric Ton Forecast
1,600
1,200
1,200
1,000 800
800
600 400
400
200
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0 2006 2007 2008

Naphtha
2009
2010
Splitter
2011
2012
2013
2014
2015
2016
Wtd Avg
LPG
Gasoil
Naphtha
Wtd Avg
Propane Dehydro
Metathesis
Global Ethylene Cash Cost in Oct 2011

*MDE cash costs are average values of Iran and Saudi Arabia
2011 Global Ethylene Cash Costs by Site

2011 Annual Average WTI Crude Oil, Dollars Per Barrel = 94 Average Feedstock Basis
1,200 1,000
1,400
1109 970 1007
1111
1137
1149
1161
1,250 1,100 950

ISC Avg. WEP Avg.
800 600 400 200 0
828
NEA Avg.
800
NAM Avg.
650
500
SEA Avg.
101
350 200 50
0
MDE Avg.
20
40
60
80
100
120
140
160
CUMULATIVE ETHYLENE CAPACITY (million tons)
Page 8
Energy & Feedstock Costs
Energy & Feedstock Costs: The Dated Brent price has been volatile in the past weeks, but it now appears to be stabilizing at around $110 per barrel. The potential for near-term supply-side improvement is limited. The economic threats from the eurozone debt crisis are mounting to undermine some support in the total demand growth outlook. The resulting price outlook carries some near-term downside before stabilizing again at about $110 per barrel. The Dated Brent to WTI spread has started narrowing to the $16$17 per barrel range with the recovery in production from Libya and inventories at Cushing below the 2011 peak. Asian naphtha market sentiment remained bearish despite the recovery in regional demand from NE Asia. The market was supported by demand from continued higher operating rates at South Korean petrochemical plants, excluding SK Corp's small cracker. Petrochemical demand has remained soft amid monetary tightening measures in China and India to tame inflation, coupled with the extremely uncertain European economic outlook. Our latest balances show that the East-ofSuez naphtha market is forecast to remain marginally net short. However, weakening of the gasoline market is expected to weigh on naphtha market sentiment.
Global Crude Oil Prices
Dollars Per Barrel
150 Forecast
Global Crude Oil Prices

Dollars Per Barrel
140 130 120
Crude WTI Brent Crude Crude Dubai
Forecast
130
Crude WTI Crude Brent Crude Dubai
110 100 90
110
90
80 70
70
60 50
50
40 30
30
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
20 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Purvin & Gertz, Inc.
Brent Crude & Japan Naphtha - Crack Spread

1,400
Source: Purvin & Gertz Inc.
Brent Crude & Japan Naphtha - Crack Spread

Spreads, Dollars Per Metric Ton

500
Spreads, Dollars Per Metric Ton

350
Forecast
1,100
400
Forecast
300
1,200
1,000 800 600 400
100 300
1,000 900 800 700

250 200 150 100
200
600 500 400
200
0 Jan-10
0
50
300 200
0
Jul-10
Jan-11
Jul-11
Brent Crude
Jan-12
Jul-12
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Naphtha Japan - Brent Spread
Japan Naphtha
Naphtha Japan - Brent Spread
Brent Crude
Naphtha Japan
Singapore vs. Japan Naphtha Spread

Japan Naphtha & LPG Steam Cracking - Spread

Based on NE Asia production cost
Naphtha Cracking Advantageous
Spread, Dollars Per Metric Ton 100

Source: Purvin & Gertz Inc.
Spreads, Dollars Per Metric Ton 600 Forecast 400 200 0 (200) (400)
Forecast
1,200
80
1,500 1,200
1,000 60 800 40 600 20
900 600 300

LPG Cracking Advantageous
Source: Purvin & Gertz
400
200 Jan-10
0 Jan-10
(600) Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Japan CFR
Japan Naphtha - LPG Spread Japan Naphtha Cash Cost
Japan LPG Cash Cost
Sin-Jap Naphtha Spread
Singapore FOB
Page 9
Ethylene Supply/Demand Balances
Ethylene Supply/Demand Balances: Cracker operators in Asia have started to cut their operating rates since October amid weak downstream demand. Integrated producers are also affected as downstream derivative prices continue on the downtrend with no respite in sight. As most crackers return from their turnarounds and shutdowns in 4Q, the ample availability in the region has forced producers to slash their operating rates amid falling demand. Crackers in China, Taiwan and Japan are running at 8090 percent, while South Korean crackers are at around 9095 percent. Crackers in SE Asia have also reduced their run rates to around 85 percent in the face of weak demand. This situation is expected to remain unchanged for the rest of the year. As the economic climate remains weak with the ongoing crisis in Europe, buyers will remain cautious and purchase only on a hand-to-mouth basis. The peak buying period for the year-end holidays is already over, hence there is limited optimism among downstream producers for the remaining months of 2011.
Ethylene Production Capacity Loss in Asia

Million Metric Tons
1.5
Ethylene Production Lost to planned/unplanned cracker shutdowns (million metric tons)
Availability 115%
Forecast includes 1.5% unplanned and variable market outages
Lost Capacity 20%
Regional Ethylene Production Outages

1.3
2010 4.40
2011fct 5.34
2012fct 3.89
105%
16%
1.0
95%
12%
0.8
85%
8%
0.5
75%
0.3
65%
4%
0.0 Jan-10
55%
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Australia Malaysia South Korea NEA Cracker Availability
Thailand Indonesia Japan SEA Cracker Availability
Singapore Taiwan China
0% Jan-10
Jul-10 WEP
Jan-11 SEA
Jul-11 NEA
Jan-12 NAM
Jul-12
Asia Ethylene Supply/Demand Balance

Million Metric Tons 4.1
Note: Domestic demand excludes export volume
Asia Ethylene Supply/Demand Balance

Availability 110%

Forecast 55
Operating Rate, Percent 110
Forecast
100%
3.8
100
3.5
90%
50
90 45 80 40
3.2
80%
2.9
70%
70
35
2.6 60%
30
2.3 Jan-10 50% Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
60
25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
50
Domestic Ethylene Demand Cracker Availability
Monthly Ethylene Production
Total Ethylene Demand
Total Ethylene Capacity
Cracker Operating Rate
Global Ethylene Capacity & Demand Additions

2011 Asian Ethylene Market

Naphtha 81.5%
Forecast
12.0
Gas Oil 5.0%
8.0
Others 1.2% Butane 2.9%
Demand
LDPE 14.9%
LLDPE 17.1%
4.0
Propane 2.2%
Ethane 7.2%
HDPE 27.7%
0.0
Supply
Ethylene Oxide 13.7%
-4.0
Vinyl Acetate 1.7%
-8.0 2006 2007

Asia Middle East
2008
2009
2010
2011
2012
2013
2014
2015
2016
EDC 10.8%
Others 4.1%
Ethylbenzene 9.7% Alpha Olefins 0.3%
North America Other
West Europe World Demand
Page 10
Asian Market Report Light Olefins Propylene Supply/Demand Balances

Propylene Supply/Demand Balances: With the reduction in Asian cracker operating rates, propylene production will also be cut, in addition to ethylene supply. Weak demand in the downstream derivatives market has forced producers to reduce their operating rates as availability improved with the return of crackers and on-purpose propylene units from their earlier shutdowns. The reduction in cracker operating rates is expected to continue for at least the next two months given the worsening global economy and the slump in downstream derivative prices in recent weeks. Meanwhile, non-steam cracking operating rates remain at 9095 percent. However, should propylene margins remain weak, it is likely that on-purpose availability will be decreased further to cope with the downturn. With the uncertainties in the global economy, market players remain on the sidelines and continue to operate at low inventory levels to minimize inventory risk.
Propylene Production Capacity Loss in Asia
Thousand Metric Tons 1,200
*Non-steam cracking availability includes production from metathesis, PDH and FCC splitter
Asia Propylene Supply Additions

Availability 105%
By Production Type
Forecast
3.5
1,000
100%
3.0 2.5 2.0
800
95%
600
90%
1.5 1.0
400
85%
0.5 0.0
200
80%
-0.5
-1.0
0 Jan-10
75% Jul-10
Steam Cracker PDH & Metathesis
Jan-11
Jul-11
Jan-12
FCC unit
Jul-12
-1.5
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Non-Steam Cracking Availability*
Stm. Crackers
FCC Splitter Others
Dehydro
Metathesis
Propylene Production from Steam Cracking and Non-Steam Cracking Technologies
Asia Propylene Supply/Demand Balance
Asia Propylene Supply/Demand Balance


*Non-steam cracking availability includes production from metathesis, PDH and FCC splitter
Availability 110%
Operating Rate, Percent 110 Forecast
Forecast
50
3.1
100%
45
100
2.8
90%
40
90
2.5
80%
35
80
2.2
70%
70 30 25 20 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 60
1.9
60%
1.6 Jan-10
50% Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
50
Domestic Propylene Demand

Non-Steam Cracking Availability*
Monthly Propylene Production
Total Propylene Demand
Total Propylene Capacity
C3 Production Operating Rate
Global Propylene Capacity & Demand Additions

Ex Stm. Crackers 68.4%
2011 Asian Propylene Market

Ex FCC Splitter 22.6%
Forecast 8.0 6.0 4.0 2.0

Ex Dehydro 3.0% Metathesis 5.3% Gas-to-Olefins 2.9% Olefin Cracking 0.3%
Polypropylene 65% Butanols 3%
HS FCC 2.3%
Demand
0.0 -2.0 -4.0 2006 2007

Asia
Middle East
Supply
2-Ethyl Hexanol 5%
Propylene Oxide 5%
2008
2009
2010
2011
2012
2013
2014
2015
2016
Others 1% Acrylic Acid 4% Isopropanol 1% Cumene 6% Acrylonitrile 10%
North America
Other
West Europe
World Demand
Oligomers 1%
Page 11
Ethylene Trade Statistics
Ethylene Trade Statistics: Iranian exports for the rest of the year are expected to improve with the plant operation in Bandar Assaluyeh recovering. Work on a gas processing plant during October limited plant operating rates to the point that Morvarid PC had to shut down in October. There was also some excess supply of ethylene from Sabic for November arrival into SE Asia due to operational issues at the Kayan HDPE, but we expect export volumes to return to normal for the rest of the year. With the imminent start-up of the QAPCO LDPE plant in Qatar, export volumes are expected to decline slightly for the rest of the year. However, the increased operation of the Borouge II capacity is expected to increase export opportunities into SE Asia, even for 2012. The bleak global economic outlook for the remainder of the year has limited derivative trade volumes. In early November, Chinas domestic market was stronger than the import market as buyers were reluctant to purchase import cargoes due to the longer delivery time, thus keeping Middle Eastern PE exports limited. We expect this to continue throughout the rest of the year. Some recovery in exports is expected during late 1Q and 2Q 2012 when positive economic sentiment recovers.
Net Ethylene Monomer Trade in Asia
Thousand Metric Tons
180
Million Metric Tons
Global Net Ethylene Monomer Trade

2.4 1.8 1.2 0.6 0.0
Net Export
120 60 0 -60
Net Export
Forecast
-0.6
-120
-1.2
-180
-1.8
-240 Jan-09
Net Import
May-09
Japan Singapore
Net Import
1996 1998 2000 2002 2004 2006 2008 2010
Middle East Others
Sep-09
China
Jan-10
May-10
Taiwan Malaysia
Sep-10
Jan-11
S Korea Thailand
May-11
-2.4
2012 2014 2016
Indonesia
North America Northeast Asia
West Europe Southeast Asia
Net Ethylene Equivalent Trade in Asia

Global Net Ethylene Equivalent Trade

Net Export
0.6
Net Export
24.0 16.0
Forecast
0.2
8.0
-0.2
0.0
-0.6
-8.0 -16.0 -24.0
-1.0
-1.4
Net Import
-1.8
Net Import
Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11
-32.0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
North America Northeast Asia West Europe Southeast Asia Middle East Other
Japan Singapore
China Indonesia
Taiwan Malaysia
S Korea Thailand
Ethylene
International Spot Arbitrage Opportunities
Estimated Freight Rates
China Monthly Ethylene Net Equivalent Imports

November 2011 (Dollars Per Metric Ton) N.W. Europe

150 - 160
Net Export
0.0
1,180 1,220 CIF (n) 300 - 310

(0.3)
1,103 1,147 delivered
U.S Gulf
Mediterranean
420 - 425 360 - 370
N.E. Asia
105 115
4,500 basis
1,000 - 1,050 FOB (n)
(0.6)
Middle East Gulf. 1,000 -1,070 CFR (n)

235 - 240
S.E. Asia
155 175
4,500 basis
(0.9)
980 - 1,020 FOB (n) 980 - 1,020 CFR (n)

(1.2)
115 125
4,500 basis
Intra-region trade flows Inter-region trade flows / arbitrage movements Inter-region arbitrage movement limited / closed Inter-region, potential arbitrage opening
Net Import (1.5) Jan-09 May-09

Ethylene Glycol
Sep-09
Jan-10
May-10 Vinyls
Sep-10
Jan-11 Styrenics
May-11
Sep-11
Polyethylene Others
Net Trade
Page 12
Propylene Trade Statistics
Propylene Trade Statistics: Propylene trade from Thailand has been impacted by the start-up of Dows new HPPO plant, which has reportedly achieved full operation. The reported start-up of Polytamas PP plant in Indonesia is expected to increase import volumes into SE Asia. Thus, the arbitrage opportunity from NE Asia and Europe into SE Asia is expected to remain fairly open for the rest of the year. However, trade volumes from NE Asia are expected to be affected by the steam cracker operation cuts by most cracker operators in NE Asia. Chinese import volume for the rest of the year is also expected to be more cautious, depending on sentiment in the derivative markets. Some short-lived momentum in the PP market is expected to encourage some import interest for propylene for December, but this is expected to fade as China enters into the Lunar New Year holiday period in January. Domestic PP demand in Thailand is also not showing any signs of improving as the country struggles to cope with the flood situation, resulting is some export potential.
Net Propylene Monomer Trade in Asia
Thousand Metric Tons 240 Net Export
Million Metric Tons
Global Net Propylene Monomer Trade

1.2
Net Export Forecast
180
120
0.9 0.6
60
0.3
0 -60 -120 -180
0.0 -0.3
-0.6
-0.9
Sep-09 China Indonesia Jan-10 May-10 Taiwan Malaysia Sep-10 Jan-11 S Korea Thailand May-11
Net Import
-240
Net Import -300 Jan-09 May-09 Japan Singapore
-1.2 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
North America Northeast Asia
West Europe Southeast Asia
Middle East Others
Net Propylene Equivalent Trade in Asia

Million Metric Tons
1.2
Million Metric Tons
Global Net Propylene Equivalent Trade

9.0
Net Export
Net Export
0.9
Forecast
6.0
0.6 0.3 0.0 -0.3
3.0
0.0
-3.0
-0.6 -0.9
-6.0
Net Import
Net Import
-1.2 Jan-09
May-09
Japan Singapore
Sep-09
China
Jan-10
May-10
Taiwan Malaysia
Sep-10
Jan-11
S Korea Thailand
May-11
-9.0 1996 1998 2000 2002 2004 2006 2008 2010

Middle East
2012
2014
2016
Indonesia
North America
West Europe
Northeast Asia
Southeast Asia
Others
Propylene
International Spot Arbitrage Opportunities
Estimated Freight Rates
China Monthly Propylene Net Equivalent Imports

Net Export
November 2011
(Dollars Per Metric Ton)
0.0
1,193 - 1,235 CIF (n)
N.W. Europe
370 - 380
9000 MT Basis
(0.2)
U.S Gulf
1,257 - 1,279 delivered
N.E. Asia
Middle East Gulf.
235 - 240
5000 MT basis
80 - 90
1,200 1,260 FOB (n) 1,230 - 1,270 CFR (n) 200 - 205
(0.4)
(0.6)
South America
S.E. Asia
(0.8)
120 - 130
Net Import
1,230 - 1,270 FOB(n)
1,280 - 1,320 CFR (n)

Intra-region trade flows Inter-region trade flows / arbitrage movements Inter-region arbitrage movement limited / closed Inter-region, potential arbitrage opening
(1.0) Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Net Trade
Sep-11
Propylene
Polypropylene
Acrylonitrile
Cumene
Others
Page 13
November 10, 2011 / Issue No. 047 Page 14
ASIAN OLEFINS PRICE FORECAST TABLE SUMMARY

Energy Market
Crude Oil WTI US$/Barrel Crude Oil Dubai US$/Barrel Naphtha CFR Japan US$/Metric Ton Naphtha FOB Singapore US$/Barrel Ethylene Spot CFR NE Asia US$/Metric Ton
Northeast Asia
Propylene Spot CFR NE Asia US$/Metric Ton Spot Production Cash Cost US$/Metric Ton Ethylene Spot CFR SE Asia US$/Metric Ton
Southeast Asia
Propylene Spot CFR SE Asia US$/Metric Ton Spot Production Cash Cost US$/Metric Ton
North America & West Europe

Ethylene Contract Ethylene Contract North America West Europe Cents/Pound /Metric Ton PGP Contract North America Cents/Pound PGP Contract West Europe /Metric Ton
2010 2011 2012 2013 2014 2015 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12
79.41 94.05 97.21 95.76 102.28 105.01 78.31 76.45 81.23 84.44 73.62 75.29 76.55 76.66 75.17 81.89 84.20 89.08 89.38 89.57 102.99 109.89 101.22 96.21 97.26 86.30 85.55 86.45 90.89 92.87 93.60 95.41 96.03 96.71 97.38 97.35 98.10 98.83 98.47 98.53 98.35 97.77
78.08 105.73 106.98 101.18 99.13 101.73 76.67 73.48 77.31 83.59 76.95 73.99 72.74 74.24 75.20 80.22 83.67 88.92 92.48 100.24 108.71 116.00 108.40 107.77 109.99 105.02 106.30 103.95 104.70 105.25 105.50 106.05 106.25 106.50 107.05 107.20 107.60 108.15 107.90 107.75 107.37 106.46
723.87 943.53 967.50 916.63 931.53 961.92 728.85 687.94 732.59 755.47 709.72 665.83 636.33 674.67 687.13 759.05 794.28 854.60 869.96 895.14 981.61 1,050.64 989.41 939.55 974.27 946.30 947.61 883.86 909.52 934.48 937.18 968.42 958.97 963.53 969.12 975.67 975.56 979.21 973.82 971.33 972.82 964.43
79.22 102.98 105.15 99.62 100.77 103.94 80.57 75.76 80.84 83.13 77.64 72.42 68.63 73.22 74.54 82.97 87.24 93.66 95.04 97.87 107.83 115.38 108.50 101.90 105.92 103.00 103.49 96.19 98.95 101.68 101.80 104.40 104.60 104.85 105.39 105.54 105.93 106.47 106.23 106.08 105.70 104.81
1,116 1,195 1,305 1,276 1,305 1,452 1,306 1,319 1,176 1,244 1,221 943 893 940 1,044 1,113 1,020 1,175 1,245 1,310 1,321 1,359 1,356 1,149 1,136 1,164 1,117 1,063 1,025 1,100 1,200 1,250 1,200 1,240 1,260 1,270 1,315 1,355 1,375 1,415 1,415 1,370
1,206 1,463 1,478 1,411 1,431 1,564 1,228 1,195 1,266 1,300 1,223 1,096 1,066 1,189 1,173 1,185 1,253 1,297 1,346 1,451 1,570 1,578 1,589 1,434 1,509 1,598 1,531 1,351 1,250 1,350 1,400 1,430 1,400 1,500 1,480 1,490 1,520 1,500 1,495 1,510 1,535 1,475
ANNUAL 885 1,171 1,266 1,131 1,191 1,178 MONTHLY 857 809 821 852 842 838 788 799 847 994 1,032 1,145 1,104 1,061 1,183 1,355 1,164 1,124 1,119 1,024 1,141 1,161 1,289 1,328 1,286 1,325 1,290 1,221 1,239 1,259 1,250 1,278 1,272 1,267 1,257 1,250
1,078 1,178 1,253 1,260 1,289 1,435 1,341 1,286 1,143 1,185 1,155 914 817 904 1,025 1,075 1,005 1,088 1,131 1,285 1,266 1,432 1,319 1,157 1,198 1,156 1,117 1,041 1,000 1,030 1,120 1,180 1,160 1,195 1,215 1,220 1,265 1,305 1,325 1,365 1,365 1,320
1,149 1,412 1,488 1,395 1,415 1,548 1,214 1,146 1,179 1,241 1,198 1,036 1,014 1,098 1,145 1,135 1,178 1,200 1,291 1,400 1,492 1,571 1,544 1,387 1,419 1,438 1,438 1,354 1,275 1,330 1,410 1,425 1,445 1,490 1,490 1,500 1,530 1,510 1,505 1,520 1,545 1,485
916 1,183 1,231 1,128 1,187 1,169 868 843 881 885 857 865 806 843 849 1,017 1,080 1,200 1,121 1,078 1,221 1,348 1,174 1,117 1,150 1,100 1,167 1,137 1,280 1,310 1,250 1,289 1,242 1,198 1,201 1,213 1,214 1,242 1,240 1,237 1,222 1,217
45.90 54.00 55.83 56.77 59.55 63.49 49.00 52.50 55.50 52.50 44.75 39.50 37.00 39.00 39.00 42.75 50.75 48.50 45.25 49.00 53.75 57.25 58.50 56.75 56.75 55.50 54.50 54.00
952 1,141 1,149 1,100 1,091 1,085 870 940 940 960 960 970 958 940 950 950 978 1,005 1,110 1,135 1,195 1,205 1,230 1,185 1,090 1,120 1,115 1,115 1,095
61.08 75.67 74.00 74.20 73.13 74.75 57.00 63.50 68.50 75.50 63.50 55.50 55.50 57.50 60.00 58.50 57.50 60.50 77.50 77.50 72.50 87.50 97.00 82.00 78.00 78.00 78.00 64.00
935 1,120 1,149 1,110 1,120 1,113 790 875 910 980 1,000 1,000 978 940 930 920 938 960 1,070 1,105 1,185 1,210 1,245 1,205 1,130 1,115 1,078 1,068
Asia Olefins Price Forecast
For North America and West Europe Forecast Prices, please log in to http://www.cmaiglobal.com
NEW OLEFINS CAPACITY ADDITIONS IN ASIA

Start-up Date 2011 1Q 2011 Feb Country China China Company Shandong Yuhuang BASF/Yangzi PC City Heze, Shandong Nanjing, Jiangsu Ethylene Propylene Butadiene Type (Thousand Metric Tons Per Year) 200 New FCC unit 150 75 130 Expansion Derivatives PP EO/EG Comments Construction started Jul 2006, feasibility study has been submitted. Project postponed due to weak market. Butadiene unit is started up only in 2H Sep 2011. Purpose to balance downstream system Majority of propylene production bound for exports. Production will increase to 300kta by 2012. Propylene will likely be sold in spot market Project delayed from 1H 2010, methanol unit expected to commence operation in Sep. Construction completed in Nov 2010. Trial runs in progress, expected to complete in 2H 2011. Methanol on-specification achieved in June 2011. Commercial operations expected in Oct 2011. Construction started Apr 2010. Sinopec demonstration CTO demonstration unit. In Aug 2011, completed a 16 billion yen ($208 million) upgrade to the 45,000 barrels per day FCC unit at its Chiba refinery. Commercial production expected in 4Q 2011. Construction started Mar 2010. Started up in Oct 2011 but commercial operations expected in Dec 2011. Start-up postponed from early 2011.
2011 2011 2011 2011 2011
Apr May May Jun/Jul Oct
S. Korea S. Korea S. Korea China China
LG Chem Samsung Total Hyundai Oil Zhanjiang Zhongxing Datang Int'l Power
Daesan Daesan Daesan Zhanjiang, Guangdong Duolun, Inner Mongolia
140 150 -
70 80 200 120 500
23 -
Expansion Expansion New FCC unit New FCC unit New MTP plant
PP
2011 2011
Oct 4Q
China Japan
Zhongyuan PC Idemitsu Kosan
Puyang, Henan Chiba
100 -
100 16
New CTO plant FCC Upgrading.
LLDPE, PP -
2011
Oct
China
SINOPEC Beihai PC
Beihai, Guangxi
220
New FCC unit
PP
2011 2012 2012
4Q 1Q 2Q
China Ningxia Ref & Chem Yinchuan, Ningxia Total capacity addition for year 2011 China Hohhot Refinery Hohhot, Inner Mongolia China Fushun PC Fushun, Liaoning
540 800
100 1,681 150 400
153 120
Expansion New FCC unit New cracker
PP PP HDPE, LLDPE, PP
2012 2012 2012
2Q 2Q 2H
Taiwan China Singapore
CPC Qixiang Tengda Chem ExxonMobil
Talin, Kaohsiung Zibo, Shandong Pulau Ayer Chawan
1,000
450 500
100 -
New FCC unit New butadiene unit New cracker HDPE, LLDPE, PP
2012 2012
Jul 3Q
S. Korea S. Korea
LG Chem Honam PC
Daesan Yeosu
50 250
25 130
Cracker expansion Expansion
HDPE, PP
2012 2012
3Q Sep
Indonesia China
Pertamina Bohai Chemical
Balongan, Java Tanggu, Tianjin
70 600
New FCC unit New PDH plant
PP PO
2012
Sep
China
Anqing PC
Anqing, Anhui
100
Expansion
AN, PP
2012 2012
Nov 4Q
China China
Jilin Chemical Tianjin Jin Weihui
Jilin, Jilin Dagang, Tianjin
2,100
200 180 2,805
220
New FCC unit New splitter unit
Total capacity addition for year 2012
Ground broken Aug 2006. Project postponed due to feedstock issues. Further postponement from 2010 due to construction issues. Construction from Sep 2008 to Jan 2012. Start-up expected in 1H 2012. Expected start-up in 2Q 2012. Official annoucement on Sep 2007. Shaw Stone & Webster (S&W) awarded technology contract. Delayed to 2H 2012 start-up. Daesan cracker expansion by 50 KTA ethylene capacity. No TA required. Official announcement Jan 2010. Crude C4 from existing cracker will be diverted to butadiene production from 2010 Expected start-up in 3Q 2012. Lummus Technology. Constructed began in May 2010. Partially feed to Tianjin Dagu's propylene oxide plant, rest for spot sales Expansion-cum-relocation project. No new derivative units, expansion of propylene capacity to balance downstream production and supply for domestic sale Using KBR Superflec technology to further improve C3 yield from FCC unit Construction began Dec 2008. Buys LPG feedstock for processing in splitter unit
New Olefins Capacity in Asia
The data presented herein are based on information collected within the public sector and assessments by CMAI consultants. CMAI provides no guarantee or warranty of the presented information and assumes no liability as to their use.

Start-up Date 2013 1Q 2013 1Q 2013 2013 1Q Feb Country Thailand Taiwan S. Korea China Company IRPC CPC GS Caltex SINOPEC Wuhan City Rayong City Lin Yuan, Kaohsiung Yeosu Wuhan, Hubei Ethylene Propylene Butadiene Type (Thousand Metric Tons Per Year) 100 New metathesis unit 720 360 110 New cracker 800 250 400 120 New FCC unit New cracker Derivatives PP HDPE, LLDPE, PP Comments Project approved in Jan 2009, construction in Aug 2010 Scrap-and-build project, received government approval in mid-2009. Groundbreaking ceremony in Aug 2009 Construction for 53 kbbl/day VGO FCC unit started in May 2011. Expected to be completed by 1Q 2013. Approved by CNDRC in Apr 2007, ground broken Dec 2007. Framework agreement signed May 2008 between Sinopec and SK Energy. Project delayed due to expectation of weak demand. Construction scheduled to start in 1Q 2010 Delayed start-up in line with cracker project, original S/U in mid-2009 Received environmental approval, technology licensing and EPC contracted to Shaw. Ground broken Dec 2007, Owned by Shaanxi Yanchang Petroleum Group. Groundbreaking in Jun 2008 The project will be the first commercial-scale installation of Honeywell UOP's advanced MTO methanol-to-olefins solution, which allows petrochemical producers to use methanol from natural gas or coal, instead of petroleum, to produce high yields of high-value plastics and petrochemicals. Uses UOP Oleflex process. As part of its refinery expansion. Construction started in May 2011. Commissioning will be delayed to Jul 2013 from original Apr 2012. Groundbreaking Aug 2010 Construction scheduled to start in Q2 2011. Discussions with engineering, procurement and construction contractors to be finalised in May 2011. Olefins production will be fed into existing downstream polyolefins units. Financing approved by Korean credit agency. Project was delayed due to financial crisis. Construction began in Jan 2011 and expected to be completed by 2012. UOP Oleflex Process. Ground broken Feb 2006. Project has been delayed from original start-up in 2010 due to Sichuan earthquake. Construction began in Apr 2009. Start-up further delayed from 2012 to end 2013 due to shortage Dow technology Changed from original plan of 600kta ethylene cracker. Construction begins in 2011 The unit will use UOP's C3 Oleflex technology. The unit will use the Catofin dehydrogenation process (Lummus Technology). Dual-feed steam cracker 2nd phase of the MTO complex using Lurgi technology. Approved by NDRC in late 2011 and expected to start up in Aug/ Sep 2014. Agreement signed with provincial authorities Apr 2010. Construction began Jul 2010 Construction began 4Q 2010 for HDPE / LLDPE plant As part of Petron's phase 2 refinery upgrade. Expected to be completed in end of 2014. Construction began on 1 August 2011. Construction began on 28 September 2011. JV between Sinopec and Guizhou Shuicheng Coal Mining Group (49%/51%)
2013 2013 2013 2013 2013
1Q 1Q 2Q 2Q 1H
China China China China China
Daqing Refinery Daqing PC Yulin Energy & Chem Co. Yulin Energy & Chem Co. Wison (Nanjing) Clean Energy Co.
Daqing, Heilong Daqing, Heilong. Yulin, Shaanxi Yulin, Shaanxi Nanjing
600 300 300 295
300 300 300 300 295
90 -
New FCC unit New cracker New MTO plant New DCC unit New MTO plant
PP HDPE, LLDPE, PP HDPE, LLDPE, PP HDPE, LLDPE, PP -
2013 2013 2013 2013 2013 2013
1H 1H 2H Jul 3Q 3Q
China India China India China Indonesia
Zhejiang Julong PC Indian Oil Maoming PC BCPL Pucheng Clean Energy Chem Chandra Asri
Pinghu City, Zhejiang Panipat, Har Maoming, Guangdong Dibrugarh, Assam Pucheng, Shaanxi Merak, West Java
220 300 -
450 200 60 380 -
138 100
New PDH plant New butadiene unit New FCC unit New cracker New MTO plant New butadiene unit
PP HDPE, LLDPE, PP HDPE, LLDPE -
2013
3Q
Philippines
JG Summit PC
Batangas, Batangas
320
190
New cracker
HDPE, LLDPE, PP
2013 2013
4Q Oct
China China
Yantai Wanhua Sichuan PC
Yantai, Shandong Chengdu, Sichuan
800
750 400
150
New PDH plant New cracker
Acrylic Acid, PO HDPE, LLDPE
2013 2014 2014 2014 2014 2014 2014
Oct 1Q 1Q 1H 1H 1H Aug
China Sichuan PC Total capacity addition for year 2013 China Shanghai PC China China China India China Ningbo Heyuan Chem Fujian Meide PC Ningbo Haiyue New Material Co OPAL Shenhua Ningmei
Chengdu, Sichuan Jinshan, Shanghai Ningbo, Zhejiang Fujian, Fujian Ningbo City Dahei, Guj Ningdong, Ningxia
4,655 300 300 1,100 -
300 5,335 300 300 660 600 340 500
708 95 -
New FCC unit New MTO plant New MTO plant New PDH plant New PDH plant New cracker New MTO plant
PP LDPE, PP EO, PP PP HDPE, LDPE, PP PP
2014 2014 2014 2014 2014
3Q 4Q 4Q 4Q 4Q
China India Philippines China China
Shaanxi Yanchang GAIL Petron Corp Shanxi Coking Sinopec Zhijin
Yan'an, Shaanxi Auraiya, UP Limay, Bataan Hongdong, Shanxi Zhijin, Guizhou Province
450 450 300 300
450 250 300 300
New MTO plant New cracker New FCC unit New MTO plant New MTO plant
HDPE, LLDPE, PP, oxo-alcohol HDPE, LLDPE HDPE, LLDPE, PP LLDPE, PP
3,200
4,000
95

Start-up Date 2015 1Q Country China Company Sinopec-KPC JV City Zhanjiang, Guangdong Ethylene Propylene Butadiene Type (Thousand Metric Tons Per Year) 1,000 533 152 New cracker Derivatives HDPE, LDPE, LLDPE, EG, PP PP EVA/LDPE, PP PP, LLDPE, HDPE LDPE, LLDPE, EO Comments 50:50 Sinopec-KPC JV. Approved by China's NDRC in Mar 2011. Construction will begin in 2012 and expected to complete by end 2014, with operations to begin in 1H 2015. Refinery integrated with cracker unit Planning stage. Part of IRPC's Pheonix Projects. Groundwork began in May 2008. Consturction expected to complete by end of 2014. Using naphtha and off-gas feedstock from refinery (high severity FCC unit). Project will be delayed Construction started in May 2011 and expected to take 48 months.
2015 2015 2015 2015
1Q 1Q 1Q 1H
China China Thailand Vietnam China India
Sinopec-KPC JV Yankuang Guohong Chem IRPC Ngi Son Ningxia Baofeng Energy Group Reliance Industries
Zhanjiang, Guangdong Zoucheng, Shandong Rayong City Ngi Son, Thanh Hoa Ningdong, Ningxia Jamnagar, Guj
300 300 1,350 2,950 300 1,000 1,300
235 300 260 150 300 150 1,928 300 530 830
152 0
New FCC unit New MTO plant FCC expansion New FCC unit New MTO plant New cracker
2015 1H 2015 2H
2016 2Q 2016 1H
Total capacity addition for year 2015 China Yili Meidianhua China CNOOC & Shell
Yili, Xinjiang Huizhou, Guangdong
New CTO plant New cracker
HDPE, LLDPE, PP HDPE, LLDPE, PP
Revised: November 10, 2011
Company
2011 ETHYLENE OPERATING SCHEDULE FOR CHINA (000 Metric Tons)

Location Process Capacity Jan Feb Mar Apr
CHINA
RRRR MMMM MMM CCCC RRRR CCCC -
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Baotou Shenhua BASF/Yangzi PC Beijing Dongfang CNOOC & Shell PC Daqing PC Dushanzi PC Fujian Ref & Chem Fushun PC Guangzhou PC Jilin Chemical Lanzhou PC Liaoyang PC Maoming PC Panjin Ethylene Qilu PC
Baotou, Inner Mongolia Nanjing, Jiangsu Beijing, Hebei Huizhou, Guangdong Daqing, Heilong. Dushanzi, Xinjiang Dushanzi, Xinjiang Quanzhou, Fujian Fushun, Liaoning Guangzhou, Guangdong Jilin, Jilin Jilin, Jilin Lanzhou, Gansu Lanzhou, Gansu Liaoyang, Liaoning Maoming, Guangdong Maoming, Guangdong Panjin, Liaoning Panjin, Liaoning Zibo, Shandong Zibo, Shandong
10 5 5 7 6 6 6 5 7 4 7 7 6 6 6 7 7 4 4 7 7 5 7 7 9 4 5 5 5 5 4 10 5
300 750 150 1,000 600 220 1,000 800 180 200 150 700 240 450 200 380 620 160 450 510 350 1,200 150 700 150 200 1,000 450 350 820 200 100 1,000
RRRR XXXX M--CCCC -
RRRR XX - - - MM CCCC -
RRRR RRRR RRRR - - MM RRRR RRRM RRRR RRRR RRRR mMMM RRRR RRRR RRRR RRRR RRRR RRRR mMMM CCCC RRRR
RRRR RRRR RRRR MMMM MM - MMMM RRRR Mm - RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR MMM CCCC RRRR
RMMM O--CCCC -
MMM - MMM - MMM MMM - - MM CCCC -
---O MMMM MMMM - OOO RRRR MM - CCCC -
Oo - M--RR - -
MMMM -
Secco Shanghai PC Shenyang Paraffin SINOPEC Tianjin PC SINOPEC/SABIC JV Yangzi PC Yanshan PC Zhongyuan PC ZRCC
Caojing, Shanghai Jinshan, Shanghai Jinshan, Shanghai Shenyang, Liaoning Tianjin, Tianjin Tianjin, Tianjin Nanjing, Jiangsu Nanjing, Jiangsu Fangshan, Beijing Puyang, Henan Puyang, Henan Ningbo, Zhejiang
Total China Capacity Total Capacity Lost Percentage Lost Scheduled Outages Unplanned Outages (Due to operational reasons) Market Outages (Due to economic reasons) Process ID (4) EPB/Naphtha (5) Naphtha (6) EPB/Naphtha/Gas Oil/Residues
Ethylene Plant OPS
15,642 1,453 9.3% 625 187 641
1315 60 4.6% 56 5
1199 43 3.6% 38 5
1327 29 2.2% 24 5
1285 5 0.4% 5
1327 121 9.1% 41 12 68
1285 145 11.3% 66 10 70
1327 47 3.6% 22 25 -
1327 187 14.1% 187 -
1285 217 16.9% 137 79 -
1336 158 11.8% 21 27 110
1293 203 15.7% 14 189
1336 237 17.7% 32 20 184
Forecast period assumes a forecast of unplanned and market outages. (1) Ethane (2) Ethane/Propane (3) E/P/B (7) Naphtha/Gas Oil/Residues (9) Recovery from FCC/DCC Unit (10) Methanol to Olefins M = General Maintenance & Repair O = Operational Problem I = Plant Idled R = Reduced Operating Rates A = Accident X = Expansion C = Under Construction/ Not Commercially Ready (Upper case letter indicates 1 week duration. Lower case letter indicates 4 days or less.) Note : Unplanned outages include both mechanical and business driven outages
2011 ETHYLENE OPERATING SCHEDULE FOR NORTHEAST ASIA EXCL. CHINA (000 Metric Tons)
Company
Idemitsu Kosan Chiba Tokuyama JX Nippon Oil & Energy Corp. Kawasaki Keiyo Ethylene Maruzen Mitsub. Chemical Corp. Chiba Chiba Kashima, No.2 Kashima, No.1 Mizushima Mitsui Chemicals Osaka PC Sanyo PC Showa Denko Sumitomo Chem. TonenGeneral TOSOH Chiba Sakai Mizushima Oita Chiba Kawasaki Yokkaichi
Location
Process
5 5 5 5 5 4 4 4 5 4 5 5 5 5 5
Capacity
415 686 440 768 525 450 375 360 612 460 458 691 415 540 527
Jan
ROo -
Feb
-
JAPAN
---M - AAA -a-- AAA - AAA - AAA -R-- - RR - RRR -
Mar
Apr
MMMM A--AAAA AAAA R---
May
MMM AAA AAMM - - MM -
Jun
---O --OMMMM MMMM - OO -
Jul
MMMM -
Aug
-
Sep
MMMM MMMM -
Oct
- - oO MM - MM - -
Nov
-
Dec
SOUTH KOREA
Honam PC KPIC LG Chem Samsung Total PC SK Energy Chemical YNCC Daesan Yeosu Onsan Daesan Yeosu Daesan Ulsan Ulsan Yeosu Yeosu Yeosu 5 5 5 5 5 5 5 5 5 5 5 1,000 750 470 900 1,000 1,000 190 670 850 450 550 --o- ORR ---O RRRR - xXX RRR RRRR Mm - MMMM XXO ---X mMMM OO - XXX M-----R o--- MMM --o---O M--O---
TAIWAN
RRRR -
CPC-Taiwan
Lin Yuan, Kaohsiung, No.5 Lin Yuan, Kaohsiung, No.3 Lin Yuan, Kaohsiung, No.4
7 5 7 5 5 5
500 230 385 700 1,035 1,200
---R -
MMMM RRRR - RRR - RRR - RRR
M--RRRR RoOO RRRR RRRR
RRRR OOOO RRRR RRRR
RRRR RRRR OO - OOOO RRRR RRRR
- - MM OOOO - - MM
MMM OOOR MMMM
RR - MM - -
mMMM -
FPCC
Mai Liao, No.1 Mai Liao, No.2 Mai Liao, No.3
Total Northeast Asia Capacity Total Capacity Lost Percentage Lost Scheduled Outages Unplanned Outages (Due to operational reasons) Market Outages (Due to economic reasons) Process ID (4) EPB/Naphtha (5) Naphtha (6) EPB/Naphtha/Gas Oil/Residues
19,554 2,547 13.0% 946 761 839
1,645 21 1.3% 21 -
1,486 19 1.3% 19 -
1,645 188 11.4% 40 148 -
1,592 307 19.3% 203 91 13
1,657 224 13.5% 115 93 16
1,616 196 12.1% 56 103 37
1,670 175 10.5% 49 82 45
1,670 266 15.9% 79 67 120
1,616 308 19.0% 204 47 56
1,670 309 18.5% 150 34 124
1,616 273 16.9% 25 31 217
1,670 263 15.8% 25 25 213
Ethylene Plant OPS
Forecast period assumes a forecast of unplanned and market outages. (1) Ethane (2) Ethane/Propane (3) E/P/B (7) Naphtha/Gas Oil/Residues (9) Recovery from FCC/DCC Unit M = General Maintenance & Repair O = Operational Problem I = Plant Idled R = Reduced Operating Rates A = Accident X = Expansion (Upper case letter indicates 1 week duration. Lower case letter indicates 4 days or less.) Note : Unplanned outages include both mechanical and business driven outages
2011 SOUTHEAST ASIA ETHYLENE OPERATING SCHEDULE (000 Metric Tons)

Company Location Process Capacity Jan
INDONESIA
RRRR -
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Chandra Asri PC
Serang, W. Java
590
RRRR
- - Oo
MMMM
MM - -
MALAYSIA
Eth. Malaysia OPTIMAL Olefins Titan Petchem Kerteh, Terengganu Kerteh, Terengganu Pasir Gudang, Johor, No.1 Pasir Gudang, Johor, No.2 1 2 5 5 400 600 289 434 - - MM MM - RRR ---M MMm ---o OO - RR - -
SINGAPORE
ExxonMobil PCS Pulau Ayer Chawan, Pulau Ayer Merbau, No.1 Pulau Ayer Merbau, No.2 Shell Chemical Pulau Bukom, 7 4 4 7 875 465 615 800 RRRR RRmM MMoO OOOO OOOR RRRR ---M RRRR MMMM MMMM MMRR RR - RR - RRRR RRRR RRRR
THAILAND
IRPC MOC PTT Chemical Rayong City, Rayong Map Ta Phut, Rayong Map Ta Phut, Rayong Map Ta Phut, Rayong Map Ta Phut, Rayong PTT Polyethylene Rayong Olefins Map Ta Phut, Rayong Map Ta Phut, Rayong 7 5 3 1 4 1 5 350 900 463 400 515 1,000 800 RRRR RRRR RRRR RRRR ---R RRRR RR - ---R ---R RRRR ---R RR - RR - RRRR - - MM MMMm MMMM -
AUSTRALIA
Huntsman Austrl Qenos W. Footscray, Vic Altona, Vic Altona, Vic Botany, NSW 1 1 3 4 32 122 80 270 RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR RRRR
Total Southeast Asia Capacity Total Capacity Lost Percentage Lost Scheduled Outages Unplanned Outages (Due to operational reasons) Market Outages (Due to economic reasons) Process ID (1) Ethane (2) Ethane/Propane (3) E/P/B (4) EPB/Naphtha (5) Naphtha (6) EPB/Naphtha/Gas Oil/Residues
10,000 1,342 13.4% 478 380 483
849 54 6.4% 33 21
767 55 7.1% 20 17 18
849 102 12.0% 39 27 36
822 108 13.1% 20 69 20
849 82 9.7% 60 22
822 69 8.3% 5 34 30
849 132 15.6% 79 34 19
849 205 24.1% 181 12 11
822 90 10.9% 33 9 48
849 146 17.2% 44 19 83
822 182 22.1% 58 42 82
849
Ethylene Plant OPS
118 13.9% 25 93
Forecast period assumes a forecast of unplanned and market outages. (7) Naphtha/Gas Oil/Residues (9) Recovery from FCC/DCC Unit M = General Maintenance & Repair O = Operational Problem I = Plant Idled R = Reduced Operating Rates A = Accident X = Expansion (Upper case letter indicates 1 week duration. Lower case letter indicates 4 days or less.) Note : Unplanned outages include both mechanical and business driven outages
2011 ON-PURPOSE PROPYLENE PLANT OPERATING SCHEDULE FOR ASIA (000 Metric Tons)
Company Location Process Capacity
NORTHEAST ASIA
300 500 74 150 500 100 150 140 150 140 50 165 110 120 206 250 250 RRRR CCCC CCCC CCCC RRRR CCCC CCCC CCCC RRRR CCCC CCCC CCCC ---M - AAA ---m RRRR - MMM RRRR CCCC CCCC CCCC MMMM MMMM RRRO MMMM
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Baotou Shenhua Datang Int'l Power Jilin Chemical Secco Shenhua Ningmei Zhongyuan PC Chiba Propylene JV
Baotou, Inner Mongolia Duolun, Inner Mongolia Jilin, Jilin Caojing, Shanghai Ningdong, Ningxia Puyang, Henan Chiba
Methanol to Olefins Methanol to Propylene Olefin Cracking Metathesis Methanol to Propylene Methanol to Olefins Metathesis Metathesis Metathesis Metathesis Olefin Cracking C3 Dehydro-Poly. grade Metathesis Metathesis Metathesis C3 Dehydro-Poly. grade Metathesis
RRRR CCCC CCCC MMM m--o--MM - -
RRRR CCCC CCCC -
RMMM CCCC CCCC - mMM -
MMM CCCC CCCC MMMM MMMM AAAA
CCCC CCCC AAA -
CCCC MMM -
JX Nippon Oil & Energy Kawasaki Corp. Mitsub. Chemical Corp. Kashima Osaka PC Sanyo PC Hyosung Corp. KPIC LG Chem Samsung Total PC Tae Kwang FPCC Sakai Mizushima Ulsan Onsan Yeosu Daesan Ulsan Mai Liao
SOUTHEAST ASIA
Pertamina Petronas PP Malaysia Titan Petchem PCS HMC Polymers MOC PTT Chemical Balongan, W. Java Kuantan, Pahang Kuantan, Pahang Pasir Gudang, Johor Pulau Ayer Merbau Map Ta Phut, Rayong Map Ta Phut, Rayong Map Ta Phut, Rayong Metathesis C3 Dehydro-Poly. grade C3 Dehydro-Poly. grade Metathesis Metathesis C3 Dehydro-Poly. grade Metathesis C3 Dehydro-Poly. grade 190 300 80 130 200 310 300 100 RRRR RRRR RRRR RRRR RRRR RRRR ---M RRRR MMMM RRRR RRRR -
On-Purpose Propylene Plant OPS
Total Asia Capacity Total Capacity Lost Percentage Capacity Lost Scheduled Outages Unplanned Outages Forecast period assumes a forecast of unplanned outages.
4215 352 8.4% 178 174
302 10 3.3% 10
273 12 4.4% 12
324 52 16.0% 16 36
313 57 18.2% 40 17
366 32 8.7% 14 18
354 10 2.8% 10
366 42 11.4% 36 6
366 91 24.8% 65 26
354 22 6.2% 22
375 8 2.1% 8 -
404 7 1.8% 7
417 10 2.5% 10
M = General Maintenance & Repair Note: Unplanned outages include both mechanical and business driven outages R = Reduced Operating Rates
O = Operational Problem A = Accident
I = Plant Idled X = Expansion
C = Under Construction/ Not Commercially Ready (Upper case letter indicates 1 week without production. Lower case letter indicates 4 days or less.)
SUPPLY
DEMAND
Revised November 10, 2011
NORTHEAST ASIA ETHYLENE QUARTERLY SUPPLY/DEMAND

(Thousand Metric Tons)
2010
Q1 Capacity Nameplate Effective Operating Rate Nameplate Effective Supply Production Imports Total Supply Alpha Olefins Ethylbenzene EDC Ethylene Oxide PE Vinyl Acetate Others Domestic Demand Exports Total Demand Inventory Change Q2 Q3 Q4 Q1 Q2
2011
Q3 Q4 Q1 Q2
2012
Q3 Q4
2010 Actual
2011
2012
AGR(%)
10 - 11 11 - 12
Actual
8,154 7,517 91.3 99.0 7,442 339 7,781 30 759 877 977 4,282 143 326 7,393 338 7,731 49 8,541 7,802 89.9 98.4 7,677 307 7,984 30 767 872 919 4,723 149 326 7,787 264 8,051 (67) 8,744 8,101 94.8 102.3 8,288 351 8,639 30 899 1,015 1,229 4,651 146 330 8,301 279 8,580 58 8,798 8,340 96.6 101.8 8,495 423 8,918 30 939 1,065 1,226 4,818 160 330 8,568 330 8,898 20
Actual
8,603 8,258 100.3 104.5 8,630 365 8,996 31 1,008 1,086 1,422 4,706 167 307 8,727 293 9,020 (24) 8,747 7,957 91.5 100.6 8,006 338 8,344 31 875 1,036 1,256 4,338 170 305 8,011 329 8,340 4 8,880 7,901 88.5 99.5 7,859 462 8,321 31 862 1,168 1,169 4,398 170 308 8,107 355 8,462 (141) 8,906 8,499 83.8 87.8 7,462 459 7,921 31 857 926 1,197 4,276 163 308 7,759 151 7,909 12
Forecast
8,982 8,649 88.8 92.2 7,974 607 8,580 35 909 980 1,275 4,573 190 309 8,271 251 8,522 59 9,058 8,442 93.2 100.0 8,442 352 8,794 35 934 1,039 1,299 4,754 190 309 8,559 235 8,794 9,200 8,507 92.5 100.0 8,507 392 8,899 35 981 1,062 1,340 4,860 192 316 8,787 347 9,134 (235) 9,200 8,946 97.2 100.0 8,946 191 9,138 35 987 1,045 1,262 4,942 192 312 8,776 362 9,138 -
Forecast
35,136 32,615 91.0 98.0 31,958 1,624 33,582 125 3,601 4,216 5,044 17,719 670 1,229 32,603 1,128 33,732 (150) 36,440 34,545 92.9 98.0 33,869 1,542 35,411 141 3,811 4,125 5,177 19,129 763 1,246 34,392 1,195 35,588 (176) 0.2 0.8 4.7 7.0 10.1 15.9 (4.1) 12.1 (6.4) 1.7 6.0 5.4 13.0 5.8 (2.2) 2.6 8.0 14.0 1.4 5.5 2.6 2.7 3.7 5.9
34,236 31,761 93.2 100.4 31,902 1,419 33,321 119 3,364 3,830 4,351 18,475 597 1,312 32,049 1,212 33,260 61
Ethylene Quarterly Supply/Demand
1.4
5.5
*Effective Capacity = Nameplate Capacity - Planned and Unplanned Losses
For China, Japan, South Korea and Taiwan Ethylene Quarterly Supply/Demand Balances, please log on to http:// www.cmaiglobal.com with your username and password, and proceed to the Supplement data section
SUPPLY
DEMAND
SOUTHEAST ASIA ETHYLENE QUARTERLY SUPPLY/DEMAND

(Thousand Metric Tons)
2010
Q1 Capacity Nameplate Effective Operating Rate Nameplate Effective Supply Production Imports Total Supply Alpha Olefins Ethylbenzene EDC Ethylene Oxide HDPE LDPE LLDPE Vinyl Acetate Others Domestic Demand Exports Total Demand Inventory Change Q2 Q3 Q4 Q1 Q2
2011
Q3 Q4 Q1 Q2
2012
Q3 Q4
2010 Est.
2011
2012
AGR(%)
10 - 11 11 - 12
Estimate
2,145 1,878 83.9 95.8 1,799 267 2,066 1 140 148 315 652 306 361 18 79 2,019 40 2,060 6 2,493 2,160 82.2 94.9 2,049 250 2,299 1 141 156 310 714 320 407 18 80 2,147 109 2,256 43 2,521 2,155 80.8 94.5 2,037 237 2,274 1 143 155 307 716 334 400 18 81 2,154 150 2,304 (30) 2,521 2,173 81.8 94.9 2,062 312 2,375 1 142 157 301 726 355 412 18 81 2,193 114 2,307 67
Est.
2,466 2,330 91.4 96.8 2,255 259 2,514 1 117 160 298 845 318 536 18 122 2,415 99 2,515 (0) 2,493 2,306 89.6 96.9 2,234 288 2,522 1 140 155 265 838 327 509 19 123 2,376 109 2,484 38 2,521 2,163 84.5 98.5 2,130 227 2,357 1 142 150 296 744 306 486 19 116 2,260 96 2,356 1 2,521 2,360 86.2 92.0 2,172 230 2,402 1 128 153 294 759 327 542 19 124 2,348 55 2,402 -
Forecast
2,486 2,401 86.0 89.1 2,139 304 2,443 1 139 171 263 756 321 556 20 127 2,354 91 2,444 (1) 2,486 2,444 89.3 90.8 2,220 315 2,535 1 139 172 269 811 330 573 20 119 2,434 101 2,535 2,765 2,719 88.6 90.2 2,451 289 2,740 1 140 174 273 838 332 714 21 128 2,621 119 2,740 2,765 2,719 87.7 89.2 2,425 286 2,711 1 140 174 273 819 332 716 21 128 2,603 108 2,711 -
Forecast
10,000 9,159 87.9 96.0 8,791 1,005 9,796 4 527 618 1,153 3,185 1,278 2,074 75 486 9,399 358 9,757 39 10,503 10,283 87.9 89.8 9,235 1,195 10,430 3 559 691 1,078 3,223 1,315 2,558 82 503 10,012 419 10,431 (1) 10.6 8.7 14.1 (6.9) 0.5 (6.6) 13.4 (2.8) 31.3 5.3 51.2 10.4 5.0 6.5 (24.8) 6.0 11.9 (6.5) 1.2 2.9 23.4 9.5 3.5 6.5 3.3 9.5 5.0 12.3
9,679 8,366 82.1 95.0 7,947 1,066 9,014 4 566 615 1,234 2,807 1,316 1,579 71 321 8,513 414 8,928 86
Ethylene Quarterly Supply/Demand
9.3
6.9
*Effective Capacity = Nameplate Capacity - Planned and Unplanned Losses
For Australia, Indonesia, Malaysia, Philippines, Singapore and Thailand Ethylene Quarterly Supply/Demand Balances, please log on to http://www.cmaiglobal.com with your username and password, and proceed to the Supplement data section
SUPPLY
DEMAND
NORTHEAST ASIA PG/CG PROPYLENE QUARTERLY SUPPLY/DEMAND

(Thousand Metric Ton)
2010
Q1 Q2 Q3 Q4 Q1 Q2
Asian Market Report Light Olefins Propylene Quarterly Supply/Demand
2011
Q3 Q4 Q1 Q2
2012
Q3 Q4
2010 Actual
2011
2012
AGR(%)
10 - 11 11 - 12
Actual
Propylene Capacity Ethylene Production P/E Ratio Propylene Production Steam Crackers Catalytic Crackers Dehydrogenation Other Total Production Imports Total Supply Acrylic Acid Acrylonitrile Cumene Isopropanol 2-Ethyl Hexanol n-Butanol Polypropylene Propylene Oxide Others Domestic Demand Exports Total Demand Inventory Change 7,077 7,442 0.550 4,094 1,757 86 451 6,486 550 7,036 311 609 390 85 295 212 4,294 384 87 6,667 498 7,165 (128) 7,155 7,677 0.548 4,209 1,816 103 410 6,609 517 7,126 311 772 402 85 316 212 4,237 359 87 6,782 416 7,198 (72) 7,234 8,288 0.549 4,551 1,635 105 396 6,763 486 7,249 314 785 393 86 341 214 4,235 376 88 6,832 340 7,172 77 7,234 8,495 0.542 4,602 1,648 105 480 6,837 646 7,484 314 764 351 86 331 214 4,535 413 88 7,098 536 7,634 (150)
Actual
7,580 8,630 0.534 4,605 1,892 98 549 7,017 645 7,661 311 703 443 82 294 198 4,583 400 82 7,096 549 7,646 16 7,664 8,006 0.533 4,270 1,694 94 604 6,598 465 7,063 330 780 373 85 304 216 4,122 411 90 6,709 397 7,106 (43) 7,748 7,704 0.536 4,129 1,640 83 631 6,483 544 7,026 332 667 384 92 342 223 4,232 421 90 6,783 347 7,129 (103) 7,748 8,052 0.535 4,307 1,837 91 754 6,989 362 7,351 332 727 446 92 347 224 4,419 427 90 7,104 247 7,351 -
Forecast
8,048 8,297 0.522 4,333 2,038 83 691 7,145 594 7,739 356 660 439 99 356 236 4,787 421 94 7,448 291 7,739 8,119 8,449 0.522 4,413 2,021 85 697 7,215 504 7,719 356 660 439 99 356 236 4,768 421 94 7,429 290 7,719 8,208 8,748 0.522 4,571 2,102 100 704 7,477 426 7,903 360 667 445 100 360 238 4,872 426 95 7,564 339 7,903 8,208 8,651 0.522 4,520 2,175 170 700 7,565 306 7,870 360 667 444 100 360 238 4,882 426 95 7,572 298 7,870 -
Forecast
30,740 32,392 0.534 17,311 7,062 366 2,539 27,086 2,016 29,102 1,305 2,877 1,645 350 1,287 862 17,356 1,658 353 27,692 1,541 29,233 (130) 32,584 34,146 0.522 17,838 8,336 438 2,791 29,402 1,829 31,231 1,433 2,654 1,767 399 1,432 947 19,309 1,695 376 30,013 1,218 31,231 7.1 1.5 6.0 5.4
28,700 31,902 0.547 17,455 6,856 399 1,736 26,696 2,199 28,895 1,251 2,931 1,537 342 1,283 852 17,301 1,532 350 27,378 1,790 29,169 (273)
(0.8) 3.0 (8.2) 46.2 1.5 0.7 4.3 (1.8) 7.0 2.3 0.3 1.1 0.3 8.3 0.9 1.1
3.0 18.0 19.6 9.9 8.6 7.3 9.8 (7.8) 7.4 14.1 11.3 10.0 11.3 2.3 6.6 8.4
0.2
6.8
For China, Japan, South Korea and Taiwan Propylene Quarterly Supply/Demand Balances, please log on to http:// www.cmaiglobal.com with your username and password, and proceed to the Supplement data section
SUPPLY
DEMAND
SOUTHEAST ASIA PG/CG PROPYLENE QUARTERLY SUPPLY/DEMAND

(Thousand Metric Ton)
2010
Q1 Q2 Q3 Q4 Q1 Q2
Asian Market Report Light Olefins Propylene Quarterly Supply/Demand
2011
Q3 Q4 Q1 Q2
2012
Q3 Q4
2010 Est.
2011
2012
AGR(%)
10 - 11 11 - 12
Estimate
Propylene Capacity Ethylene Production P/E Ratio Propylene Production Steam Crackers Catalytic Crackers Dehydrogenation Other Total Production Imports Total Supply Acrylic Acid Acrylonitrile Cumene Isopropanol 2-Ethyl Hexanol n-Butanol Polypropylene Propylene Oxide Others Domestic Demand Exports Total Demand Inventory Change 1,328 1,799 0.365 657 217 77 118 1,069 95 1,164 41 61 38 55 911 83 6 1,195 62 1,257 (93) 1,551 2,049 0.397 814 238 92 155 1,298 61 1,359 42 61 38 55 938 84 6 1,225 133 1,358 1 1,568 2,037 0.386 787 253 86 202 1,328 97 1,424 42 62 39 56 966 85 6 1,256 142 1,398 27 1,568 2,062 0.386 797 277 121 232 1,427 102 1,528 42 62 39 56 978 85 6 1,268 134 1,402 126 1,646 2,255 0.375 845 245 89 214 1,393 106 1,498 41 67 41 57 1,019 87 6 1,319 147 1,466 32
Est.
1,660 2,234 0.373 834 258 146 204 1,442 108 1,550 41 67 41 58 1,056 87 6 1,358 134 1,492 59 1,678 2,130 0.370 787 259 136 198 1,380 111 1,491 41 68 34 66 1,039 73 6 1,327 181 1,508 (17) 1,678 2,172 0.376 817 244 146 215 1,422 99 1,521 41 68 37 54 1,034 161 6 1,402 120 1,522 (0)
Forecast
1,711 2,139 0.368 788 282 161 205 1,436 73 1,509 43 68 38 52 1,115 131 7 1,454 54 1,508 0 1,720 2,220 0.366 812 286 153 207 1,458 41 1,499 43 68 38 52 1,116 131 7 1,455 43 1,498 1 1,739 2,451 0.379 929 285 155 207 1,577 50 1,627 44 69 38 52 1,235 133 7 1,577 48 1,625 1 1,739 2,425 0.380 923 288 163 208 1,581 40 1,622 44 69 38 52 1,235 133 7 1,577 43 1,620 1
Forecast
6,663 8,791 0.373 3,283 1,006 517 831 5,637 424 6,061 165 271 153 236 4,148 407 25 5,406 581 5,987 74 6,908 9,235 0.373 3,452 1,141 632 827 6,052 205 6,257 173 275 152 208 4,701 528 27 6,064 188 6,252 4 10.8 10.6 3.7 5.0
6,015 7,947 0.384 3,054 985 376 707 5,122 354 5,476 166 246 154 222 3,793 338 24 4,944 472 5,415 60
7.5 2.1 37.4 17.6 10.1 10.7 (0.9) N/A 9.9 N/A (0.5) 6.4 9.3 20.7 4.8 9.3
5.1 13.4 22.2 (0.5) 7.4 3.2 5.1 N/A 1.5 N/A (0.7) (11.9) 13.3 29.6 4.5 12.2
10.6
4.4
For Australia, Indonesia, Malaysia, Philippines, Singapore and Thailand Propylene Quarterly Supply/Demand Balances, please log on to http://www.cmaiglobal.com with your username and password, and proceed to the Supplement data section
ETHYLENE NET EQUIVALENT TRADE TABLE

Mar-11 Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade -76 -63 -112 -342 -399 -24 -1,016 47 40 42 13 9 -23 126 15 -5 9 87 -8 -8 90 13 26 27 16 40 8 129 Apr-11 May-11 China -51 -69 -43 -32 -95 -70 -246 -226 -318 -340 -19 -23 -772 -761 Japan 49 38 38 34 23 26 7 2 -7 -13 -23 -16 87 71 South Korea 25 42 0 -4 0 7 64 67 -7 3 -9 -9 73 106 Taiwan -10 2 11 11 17 24 14 14 55 56 6 1 93 108
Northeast Asia
Southeast Asia
Jun-11 -86 -24 -86 -213 -388 -20 -818 43 33 25 2 -7 -23 72 67 -1 21 79 -2 -6 156 -6 -4 15 18 23 1 48 Jul-11 -87 -28 -95 -240 -330 -10 -790 55 30 31 2 1 -18 101 65 2 27 90 3 -10 176 -27 4 13 31 12 4 36 Aug-11 -102 -53 -125 -320 -415 -24 -1,041 63 40 36 2 4 -28 116 73 6 29 101 -5 -7 196 -53 -1 9 16 51 4 26 Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Ethylene Vinyls Styrenics Polyethylene Glycol Others Net Trade Feb-11 -32 2 -1 -14 -18 7 -55 12 3 -4 1 10 -3 19 -3 0 21 31 37 1 88 -10 -6 -1 82 -14 -3 47 Mar-11 -49 0 -1 -22 -17 11 -78 13 0 -3 -3 1 -4 4 -11 0 30 14 57 -10 81 1 -5 1 83 -12 -10 58 Apr-11 Indonesia -86 2 1 -18 -19 3 -117 Malaysia 10 -5 -3 -12 3 -2 -10 Singapore -19 0 17 18 12 4 32 Thailand 3 -12 1 83 -12 -17 46 May-11 -36 -3 1 -17 -20 -1 -77 11 -7 -1 -10 8 -3 -2 -8 0 22 35 39 -3 85 8 -5 1 77 -19 -9 53 Jun-11 -47 2 2 -15 -13 5 -66 4 -3 -4 -2 3 -2 -4 18 0 24 27 42 -2 109 10 1 1 82 -19 -5 70 Jul-11 -53 2 3 -16 -24 0 -88 3 -3 1 -3 16 -4 10 17 0 21 25 48 -7 104 -4 -3 2 73 -18 -23 27
Ethylene Net Equivalent Trade
Mar-11 Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Propylene Polypropylene Acrylonitrile Cumene Others Net Trade -132 -433 -61 1 -122 -748 69 44 32 17 31 194 6 182 4 -3 -1 188 32 51 -3 -9 20 91
Apr-11
May-11 China -104 -74 -312 -291 -59 -44 -1 -1 -88 -80 -563 -490 Japan 46 52 16 2 32 31 14 14 17 17 125 117 South Korea -18 23 167 178 11 2 -3 -4 2 -6 160 194 Taiwan 38 -15 51 53 10 -1 -4 -6 6 6 101 37
PROPYLENE NET EQUIVALENT TRADE TABLE Northeast Asia Southeast Asia

Jun-11 -97 -315 -46 -2 -67 -529 42 2 24 10 13 91 65 188 7 -1 -4 255 -26 43 4 -7 4 19 Jul-11 -158 -391 -31 -1 -73 -653 41 11 30 16 18 115 72 216 9 -5 -4 288 -7 58 7 -5 4 58 Aug-11 -146 -448 -41 -1 -71 -706 47 10 29 17 21 125 63 213 13 -3 -1 286 -46 33 -2 -6 8 -13 Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Propylene Polypropylene Acrylonitrile Cumene Others Net Trade Feb-11 -15 -70 0 0 -2 -87 0 10 -6 0 14 18 -2 78 0 0 19 95 32 39 -18 0 -7 46 Mar-11 -12 -88 -1 0 0 -101 0 8 -9 0 15 14 -5 71 0 0 25 91 25 48 -14 0 -11 49 Apr-11 Indonesia -13 -86 -1 0 2 -97 Malaysia 0 4 -7 0 11 8 Singapore -16 66 0 0 7 57 Thailand 21 41 -14 0 -8 40
May-11 -8 -83 -2 0 1 -92 -3 1 -6 0 10 2 -18 92 0 0 21 96 30 39 -14 0 -8 46
Jun-11 -13 -70 -1 0 -6 -89 0 -5 -13 0 10 -8 3 104 0 0 10 117 23 34 -12 0 -9 35
Jul-11 -10 -60 -1 0 3 -68 3 5 -7 0 18 19 12 100 0 0 18 129 20 58 -8 0 -6 65
Propylene Net Equivalent Trade
2012 World
Data p perio resented o d of e v leven er a years 200
The will function as your most versatile source of manufacturing, marketing, economic and forecast information.
6 - 20
16
Clients are entitled to a reasonable amount of consulting time and data requests in the respective product area for a period of one year. Access to CMAIs online capacity and supply/demand databases is also included. Clients have the ability to access and download in a spreadsheet format the most up-to-date capacity data for the products covered. Available in book format and CD-ROM format, this annual study comprises a truly extensive collection of data derived from CMAI - Headquarters CMAIs own database. 1401 Enclave Parkway, Suite 500 Houston, TX 77077 USA To order your copy of Tel: 1-281-531-4660 Fax: 1-281-531-9966 CMAIs 2012 World , Dubai - Dsseldorf - London contact CMAI at cmai@ New York - Shanghai - Singapore - Bangkok www.cmaiglobal.com cmaiglobal.com.
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CMAI Asia - Light - Olefins - Monthly Analysis (10th Nov. 2011)

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CMAI Asia - Light - Olefins - Monthly Analysis (10th Nov. 2011)

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ASIAN MARKET REPORT LIGHT OLEFINS

November 10, 2011 / Issue No. 047

(Purvin & Gertz, Asia Naphtha) nravi@purvingertz.com

CONTENTS/LINKS Asia Olefins Price Settlement

Asian Market Report Light Olefins

86 884 797 932

$/bbl $/ton $/ton $/ton

109 96 865 123

$/bbl $/bbl $/ton $/bbl

2,135 2,096 836 820 1,094

1,063 1,039 1,041 1,021 1,351 1,326 1,354 1,308

808 793 672 659

November 10, 2011 / Issue No. 047

Asian Market Report Light Olefins

-2.0 -3.0 -4.0

World Ethylene Supply and Demand Scenarios

Forecast 100.0 95.0

November 10, 2011 / Issue No. 047

Asian Market Report Light Olefins

Ethylene Derivative Demand is Centered in Asia

Million Metric Tons 80

Steam Cracker Propylene By-Product Values

1.40 1.30 1.20 1.10 1.00 0.90 0.80 0.70 0.60 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

November 10, 2011 / Issue No. 047

Asian Market Report Light Olefins

Monthly Ethylene Price Forecast

Southeast Asia Spot Ethylene Cash Cost and Margin

Low Severity Full Range Naphtha

Month-to-date Cash Margin

Month-to-date Cash Margin

Asia Ethylene Spot Prices

Asia Ethylene Contract Prices

Thailand - Map Ta Phut

NE & SE Asia Ethylene CFR Price Spread

Ethylene and LLDPE Price Spreads

-200 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12

SEA CFR - NEA CFR

NEA CFR Spot Price

Ethylene CFR NEA LLDPE Non-Integrated Cash Margin

LLDPE Butene CFR China

November 10, 2011 / Issue No. 047

Asian Market Report Light Olefins

Monthly Propylene Price Forecast

NE Asia Propylene Cash Cost and Margin

P/E Ratio NEA CFR

P/E Ratio SEA CFR

Asia Propylene Spot Prices

Asia PG Propylene Contract Prices

900 600 300 Jan-10

Thailand - Map Ta Phut

NE & SE Asia Propylene CFR Price Spread

Propylene and PP Price Spreads

-200 Jul-10 Jan-11 Jul-11

SEA CFR - NEA CFR

PG Propylene CFR NEA PP Non-Integrated Cash Margin

PP Homopolymer CFR China

November 10, 2011 / Issue No. 047

Asian Market Report Light Olefins

Annual Olefins Forecast

NE Asia Ethylene Cash Cost and Margins

SE Asia Ethylene Cash Cost and Margins

Net Feedstock Fixed Cash Margins (Naphtha)