Top Banner
1. Monthly News Headlines www.pudaily.com Chinese Polyurethane Monthly Report Version: 201105 BASF Systems House Broke Ground in Tianjin. BASF Warns on Overexpansion in Asia. BASF to Build World's Largest Single-Train TDI Plant in Europe. Bayer MaterialScience to Invest $120M in Texas Plant. Bayer is to Expand Its MDI and HDI Capacity in Shanghai. Broad Application of Polyurethane in High–speed Railway. Chery Auto, Bayer Partner up on Lightweight Materials for Vehicles. Cangzhou Dahua Optimizes TDI Energy Utilization. Dow Chemical Expects Lawsuit Decision in Case Versus Kuwait Petrochemical. DuPont Packaging & Industrial Polymers to Increase Capacity at Dordrecht, Netherland. Elevance Renewable Sciences and Royal DSM to Collaborate for Bio-based Specialty Thermoplastic Materials. Fujian Putian 10,000 tons/year Water-Soluble Polyurethane Project Goes Into Production.. Huafon Microfibre (Shanghai) Co., Ltd Costs ERU 9 Million to Purchase Production Lines. INVISTA Opens Spandex Plant Expansion in Foshan, China. LANXESS Completes Acquisition of DSM Elastomers. Perstorp Increases Polyol Capacity With Investment in China. Polyurethane Adhesive Plant Nanjing Fuller Opens Up in China. PPG Issues 2010 Corporate Sustainability Report. Polyurethane Adhesive Plant Nanjing Fuller Opens Up in China. Shanghai Dongda Chemical's Polyurethane Project Begins Construction. SABIC, Asahi Kasei and Mitsubishi Form Joint Venture. Sumitomo Chemical Sets Up Dalian Plant to Seize Auto Raw Material Market. US-based Momentive to Sell Wood Resin Business. Yantai Wanhua Conducts the MDI Expansion Plan in Ningbo Base. Yantai Wanhua Polyurethanes and Huntsman Sign PO/MTBE License Agreement. 2. Polyurethane Market Analysis 2.1 TDI In May, stabilization is the key tone of domestic TDI prices. Suffered costs pressures, northern TDI suppliers make efforts to regulate up quotations, aiming to push up the market prices. In early May, quotations for home-made materials increase by RMB200/ton and at the end of May, the quotations Tel: 021-61159288 Fax: 021-61159277 E-mail: [email protected] URL: www.pudaily.com Shanghai Suntower Business Consulting Page 1
30

Chinese Polyurethane Monthly Report 201105

Oct 22, 2014

Download

Documents

daudei
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: Chinese Polyurethane Monthly Report 201105

1. Monthly News Headlines

www.pudaily.com Chinese Polyurethane Monthly Report Version: 201105

BASF Systems House Broke Ground in

Tianjin.

BASF Warns on Overexpansion in Asia.

BASF to Build World's Largest Single-Train

TDI Plant in Europe.

Bayer MaterialScience to Invest $120M in

Texas Plant.

Bayer is to Expand Its MDI and HDI Capacity

in Shanghai.

Broad Application of Polyurethane in

High–speed Railway.

Chery Auto, Bayer Partner up on Lightweight

Materials for Vehicles.

Cangzhou Dahua Optimizes TDI Energy

Utilization.

Dow Chemical Expects Lawsuit Decision in

Case Versus Kuwait Petrochemical.

DuPont Packaging & Industrial Polymers to

Increase Capacity at Dordrecht, Netherland.

Elevance Renewable Sciences and Royal

DSM to Collaborate for Bio-based Specialty

Thermoplastic Materials.

Fujian Putian 10,000 tons/year

Water-Soluble Polyurethane Project Goes

Into Production..

Huafon Microfibre (Shanghai) Co., Ltd Costs

ERU 9 Million to Purchase Production Lines.

INVISTA Opens Spandex Plant Expansion in

Foshan, China.

LANXESS Completes Acquisition of DSM

Elastomers.

Perstorp Increases Polyol Capacity With

Investment in China.

Polyurethane Adhesive Plant Nanjing Fuller

Opens Up in China.

PPG Issues 2010 Corporate Sustainability

Report.

Polyurethane Adhesive Plant Nanjing Fuller

Opens Up in China.

Shanghai Dongda Chemical's Polyurethane

Project Begins Construction.

SABIC, Asahi Kasei and Mitsubishi Form

Joint Venture.

Sumitomo Chemical Sets Up Dalian Plant to

Seize Auto Raw Material Market.

US-based Momentive to Sell Wood Resin

Business.

Yantai Wanhua Conducts the MDI Expansion

Plan in Ningbo Base.

Yantai Wanhua Polyurethanes and

Huntsman Sign PO/MTBE License

Agreement.

2. Polyurethane Market Analysis 2.1 TDI

In May, stabilization is the key tone of domestic TDI prices. Suffered costs pressures, northern TDI

suppliers make efforts to regulate up quotations, aiming to push up the market prices. In early May,

quotations for home-made materials increase by RMB200/ton and at the end of May, the quotations

Tel: 021-61159288 Fax: 021-61159277 E-mail: [email protected]

URL: www.pudaily.com

Shanghai Suntower Business Consulting Page 1

Page 2: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

ascend by RMB500/ton collectively after the industrial conference held by domestic major TDI producers.

However, BASF Shanghai and Bayer Shanghai take steps to quote high while transact at low prices, and

thus the market prices lack motives to climb up.

Additionally, TDI USD quotations in Hong Kong market prove to be high because of the supply

tightness while approaching to late May, the quotation goes down gradually but it still much higher than

the domestic RMB price, and thus mainland traders show no any inclination to purchase for the moment.

Therefore, stocks from Hong Kong are mainly exported to Southeast Asia areas.

Table 1: Monthly TDI RMB and USD Prices Comparison

Types Unit May Average Price April Average Price Fluctuation Remarks

China RMB/ton 19800-20650 20125-20675 -325, -25 Drum/Delivery

Imports USD/ton 2558-2600 2430-2488 128, 112 Drum/CIF

Note: RMB Cost =USD CIF price*(1+17%)*(1+6.5%)*(1+Anti-dumping Rate) * Exchange Rate +Import Port

Charge (Only available for calculating the costs of China TDI imports. 17%: VAT rate, 6.5%: import duty

rate; Anti-dumping rate depends on origins).

Graph 1: TDI Weekly Price Trend from 2010 to 2011

Source: PUdaily.com

2000

2200

2400

2600

2800

3000

3200

3400

1-Jan-10

5-Feb-10

12-Mar-10

16-Apr-10

21-May-10

25-Jun-10

30-Jul-10

3-Sep-10

8-Oct-10

12-Nov-10

17-Dec-10

21-Jan-11

25-Feb-11

1-Apr-11

6-May-11

10-Jun-11

Date

US

D/M

T

18000

19500

21000

22500

24000

25500

27000

28500

RM

B/M

T

USDRMB

Note: ①RMB refers to E-China, Drum/Delivery;

USD refers to Spot Price② Drum/CIF China

2.1.1Upstream Feedstocks--Toluene

In May, domestic toluene market glide down slightly and at the beginning of this month, shocked by

the continuously descending oil prices, domestic toluene pries follow up to drop. In addition, toluene

market overseas plummets sharply and market players mainly hold pessimistic attitudes towards later

market. At the end of this month, as oil prices continue the ups and downs, domestic toluene market

continues the unsteadiness as well.

Shanghai Suntower Business Consulting Page 2

Page 3: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

2.1.2 Asian TDI Facility Latest Movement

★ CNGC Gansu Yinguang Chemical Industry

Group Co.,Ltd ’s two sets of 50ktpa facilities run

100% operation rates with sufficient inventory;

★ Cangzhou Dahua Chemical’s 30ktpa and

50ktpa facilities operate with high loads and the

maintenance plan of its 50ktpa device has been

postponed to July;

★Yantai Juli Chemical’s 30ktpa facility operates

with basically full loads;

★Liaoning Northern Jinhua Polyurethane Co.,Ltd

conducts maintenance in the third week and

restarts in the fourth week of this month;

★Taiyuan Bluestar’s 40ktpa device restarts in the

fourth week of this month and this facility shut

down for expansion in January, 2011. Now, the

capacity has been expanded to 40ktpa from

30ktpa;

★BASF Shanghai plans to conduct maintenance

of its 160ktpa facility on May 23 for about one

month;

★South Korean KPX’s 100ktpa facility, located in

Yeosu, has been expanded to 150ktpa and it

plans to shut down overall from May 23 to June 3;

★ Japan Mitsui’s 120ktpa facility, located in

Kashima, has been under shutdown from March

11 and its annual maintenance schedule will start

from May 17 to June 23. In addition, its another

120ktpa facility in Omuta has been conducted

maintenance from May 13 and this maintenance

will last to June 13.

2.1.3 Import & Export Data

Table 2: China TDI Export/Import Flow from

January to April 2011 (Tons)

HS Code: 29291010 Month

Import Export

201101 9950 370

201102 6500 474

201103 6599 682

201104 7360 348

Total 30409 1874

Table 3: China TDI Export Destinations in Aril

2011 (Tons)

Export Destinations Quantities (Tons)

Albania 100

Hong Kong 79

South Africa 40

Venezuela 40

Pakistan 36

Kyrgyzstan 25

Vietnam 20

Iran 6

DPRK 2

2.1.4 Future Market Preview

In June, northern domestic TDI producers will face larger inventory pressure. Downstream factories

can make themselves under safety inventory for more than one month and thus they are not anxious to

procure now.

Additionally, under the condition of flagging demands, TDI market prices will hover at its low level or

fall off possibly in June. 2.2 Crude MDI

During this month, domestic crude MDI market price continues to drip and traders slow down their

Shanghai Suntower Business Consulting Page 3

Page 4: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

selling space. In early May, domestic suppliers announce their list price of contract price in succession.

Except for Bayer, other suppliers keep stable quotations.

However, traders still hold bearish sentiments towards later market and meanwhile, they have

obvious inclinations to sell at low prices, thereby, the market quotations decline to some extent.

In addition, some MDI plants move into the maintenance period in this month but with weak

downstream demand, they still have ample inventories. On the whole, the maintenance plans have little

impacts on whole market and the transaction price slips down gradually.

Table 4: Monthly Crude MDI RMB and USD Prices Comparison

Types Unit May Average Price April Average Price Fluctuation Remarks

China RMB/ton 16600-17400 17250-17800 -650, -400 Drum/Ex-factory

Imports USD/ton 2100-2200 2150-2250 -50, -50 Drum/CIF

Note: RMB Cost =USD CIF price*(1+17%)*(1+6.5%)*(1+Anti-dumping Rate) * Exchange Rate +Import Port Charge (Only

available for calculating the costs of China crude MDI imports. 17%: VAT rate, 6.5%: import duty rate.

Graph 2: Crude MDI Weekly Price Trend from 2010 to 2011

Source:PUdaily.com500

1100

1700

2300

2900

3500

4100

4700

8-Jan-10

26-Feb-10

16-Apr-10

4-Jun-10

23-Jul-10

10-Sep-10

29-Oct-10

17-Dec-10

4-Feb-11

25-Mar-11

13-May-11

DateU

SD

/MT

2000

6000

10000

14000

18000

22000

26000

RM

B/M

T

USDRMB

Note: ① RMB refers to E-China, Drum/Ex-Factory;

②USD refers to Drum/CIF China.

2.2.1 Upstream Feedstocks-Aniline Benzene Market: This month, domestic benzene market shows the slowly declining tendency.

Along with the fall back of crude oil price, benzene market lacks of the rising momentum. Since the

middle of this month, Sinopec has regulated down its benzene list price of various regions in

succession but the overall market demands remain poor. On the whole, the market transactions

present to be deserted.

Shanghai Suntower Business Consulting Page 4

Page 5: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Aniline Market: This month, domestic aniline market glides down steadily but in early May, the

market quotations keep stable due to the support of benzene price. Since the middle of the month,

some aniline suppliers reduce their quotations follow the declining benzene price from Sinopec.

However, as most aniline plants keep low operation rates or conduct the maintenance, the overall

market supplies decrease so that the aniline price gets the support.

2.2.2 Asian MDI Facilities Movement

★NPU’s 130ktpa MDI facility has been shut down

for one-month maintenance due to the glitches

since March 30 and expects to restart in early

June.

★NPU’s 70ktpa MDI facility was also shut down

for one-month maintenance on May 5. Besides,

its 20ktpa MDI facility is running normally.

★Yantai Wanhua Polyurethane Company's three

production lines all run steadily and meanwhile,

its 200ktpa MDI facility located in Yantai has

resumed the production since May 30.

★Mitsui Chemical's 60ktpa MDI facility located in

Omuta has been conducted one-month

maintenance from May 11 and expects to restart

on June 13.

★KUMHO Mitsui Chemical’s MDI facility was

shut down for the maintenance on May 20 and

this maintenance will last for 3-4 weeks.

★Huntsman's 160ktpa MDI splitter has been

conducted half-month maintenance since May 23.

Currently, it has normal inventories and the sales

prove to be smooth.

★BASF Shanghai's 160ktpa MDI facility was shut

down for maintenance on May 23 and it will last to

June 12.

2.2.3 Im/Export Data

Table 5: China Crude MDI Export/Import Flow

from January to April 2011 (Tons)

HS Code: 39093010 Month

Import Export

201101 28136 17279

201102 21010 11562

201103 39313 27309

201104 29492 19408

Total 117950 75558

Table 6: China Crude MDI Export Destinations in

Aril 2011 (Tons)

Export Destinations Quantities (Tons)

America 3375

Taiwan 2780

Belgium 2100

South Korea 1957

Indonesia 830

Japan 762

Thailand 713

Brazil 680

Turkey 680

India 639

2.2.4 Future Market Preview In June, most MDI manufacturers will resume production and at that moment, oversupply

Shanghai Suntower Business Consulting Page 5

Page 6: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

phenomenon will come out again and it is most likely for crude MDI market to go down and some

low-priced stocks may drop to RMB 16000/ton.

2.3 Pure MDI Market

Since the first part of April, domestic pure MDI market began to glide down and the price dropped

from RMB22000 to RMB22000/ton, down RMB2000/ton in total.

As for downstream clients, they have low rigid demands while meanwhile, they all hold the mentality

of “buying when prices going up instead of coming down” and thus the transaction atmosphere continues

to weaken. The overall pure MDI market falls into the stalemate.

In addition, downstream industries will have been in the slack season from June to August and thus

the demands tend to be weak gradually. Currently, domestic spandex plants are faced with the loss and

thus most of them begin to reduce the production or even shut down. Meanwhile, PU resin industry steps

into the slack season and thus the plants are inactive in purchasing.

Table 7: Monthly Pure MDI RMB and USD Prices Comparison

Types Unit May Average Price April Average Price Fluctuation Remarks

China RMB/ton 20700-21100 21700-22100 -1000, -1000 Drum/Ex-factory

Imports USD/ton 2700-2750 2650-2700 50, 50 Drum/CIF

Note: RMB Cost =USD CIF price*(1+17%)*(1+6.5%)*(1+Anti-dumping Rate) * Exchange Rate +Import Port

Charge (Only available for calculating the costs of China pure MDI imports. 17%: VAT rate, 6.5%: import duty rate.

Graph 3: Pure MDI Weekly Price Trend from 2010 to 2011 (E-China)

Source: PUdaily.com1000

1400

1800

2200

2600

3000

3400

8-Jan-10

19-Feb-10

2-Apr-10

14-May-10

25-Jun-10

6-Aug-10

17-Sep-10

29-Oct-10

10-Dec-10

21-Jan-11

4-Mar-11

15-Apr-11

27-May-11

Date

US

D/M

T

13000

16000

19000

22000

25000

RM

B/M

T

USDRMB

Note: ① RMB refers to E-China, Drum/Ex-Factory;

②USD refers to Drum/CIF China.

2.3.1 Upstream Feedstocks-Aniline Benzene Market: This month, domestic benzene market shows the slowly declining tendency.

Along with the fall back of crude oil price, benzene market lacks of the rising momentum. Since the

Shanghai Suntower Business Consulting Page 6

Page 7: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

middle of this month, Sinopec has regulated down its benzene list price of various regions in

succession but the overall market demands remain poor. On the whole, the market transactions

present to be deserted.

Aniline Market: This month, domestic aniline market glides down steadily but in early May, the

market quotations keep stable due to the support of benzene price. Since the middle of the month,

some aniline suppliers reduce their quotations follow the declining benzene price from Sinopec.

However, as most aniline plants keep low operation rates or conduct the maintenance, the overall

market supplies decrease so that the aniline price gets the support.

2.3.2 Asian MDI Facilities Movement

★NPU’s 130ktpa MDI facility has been shut down

for one-month maintenance due to the glitches

since March 30 and expects to restart in early

June.

★NPU’s 70ktpa MDI facility was also shut down

for one-month maintenance on May 5. Besides,

its 20ktpa MDI facility is running normally.

★Yantai Wanhua Polyurethane Company's three

production lines all run steadily and meanwhile,

its 200ktpa MDI facility located in Yantai has

resumed the production since May 30.

★Mitsui Chemical's 60ktpa MDI facility located in

Omuta has been conducted one-month

maintenance from May 11 and expects to restart

on June 13.

★KUMHO Mitsui Chemical’s MDI facility was

shut down for the maintenance on May 20 and

this maintenance will last for 3-4 weeks.

★Huntsman's 160ktpa MDI splitter has been

conducted half-month maintenance since May 23.

Currently, it has normal inventories and the sales

prove to be smooth.

★BASF Shanghai's 160ktpa MDI facility was shut

down for maintenance on May 23 and it will last to

June 12.

2.3.3 Import & Export Data

Table 8: China Pure MDI Export/Import Flow from

January to April 2011 (Tons)

HS Code: 29291030 Month

Import Export

201101 13687 3591

201102 8487 3623

201103 15984 5740

201104 10350 5144

Total 48509 18098

Table 9: China Pure MDI Export Destinations in

Aril 2011 (Tons)

Export Destinations Quantities (Tons)

Taiwan 1187

Hong Kong 641

Singapore 515

Syria 461

Turkey 395

America 333

India 310

Brazil 280

Netherlands 253

Russia 155

2.3.4 Future Market Preview

Shanghai Suntower Business Consulting Page 7

Page 8: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Generally speaking, downstream industries will come into its off-season from June to August with

weakening demands. As a result, MDI consumptions in the future will be limited with no great support for

MDI prices.

It is predicted that pure MDI market in China will go down slightly. For one hand, downstream

demands are poor and slim. On the other hand, pure MDI traders have to dispose at low prices

pressurized by short capitals.

2.4 Propylene Oxide Market Early this month, propylene oxide supply and demand unbalance still exists and the supply

tightness in the east proves to be fiercer in the north. Partial buyers purchase Shandong stocks and

prices for small orders go up gradually. Later, downstream users fail to accept the prices hike, especially

that for stocks from Ningbo ZRCC Lyondell Chemical. In the second half of this month, propylene oxide

imports arrive in ports gradually and partial northern PO and PPG plants will enter into the maintenance

successively in early June. For the moment, propylene oxide supply tightness has been remitted to

some extent and the actual transaction patterns in the third week begin to loosen to different clients.

Table 10: Monthly PO RMB and USD Prices Comparison

Types Unit May Average Price April Average Price Fluctuation Remarks

China RMB/ton 16563-16888 15838-16088 725, 800 Drum/Delivery

Imports USD/ton 2100-2150 2063-2138 37, 12 Drum/CIF

Notes: RMB Cost=USD CIF price *(1+17%)*(1+5.5%) *Exchange Rate+ Import Port Charge

(Only available for calculating the costs of China PO imports. 17%: VAT rate; 5.5%: Import duty rate but

Singapore with zero duty).

Graph 4: Propylene Oxide Weekly Price Trend from 2010 to 2011

Source:PUdaily.com

500

800

1100

1400

1700

2000

2300

2600

08-Jan-10

26-Feb-10

16-Apr-10

04-Jun-10

23-Jul-10

10-Sep-10

29-Oct-10

17-Dec-10

04-Feb-11

25-Mar-11

13-May-11

Date

USD/M

T

6000

9000

12000

15000

18000

21000

24000

RM

B/M

T

USD

RMB

Note: ①RMB refers to E-China, Drum/Delivery;

②USD refers to Drum/CIF China

Shanghai Suntower Business Consulting Page 8

Page 9: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

2.4.1 Upstream Feedstocks-PropylenePropylene Market: In early May, domestic propylene market seems to be high in the transaction

atmosphere but restrained by the contradiction of supply and demand, the decline is still the main tone

after the short-term increase. Meanwhile, downstream products of propylene are all in the downtendenct

Liquid Chlorine Market: Domestic liquid chlorine market this month performs to be unfavorable while

provoked by the soaring liquid caustic soda market; domestic producers mainly operate with high loads

(chlor-alkali facility co-produces liquid chlorine and liquid caustic soda). However, the overall

downstream demands are limited and thus prices from suppliers drop rapidly. Besides, coupled with the

gradually traditional off season of liquid chlorine as well as the newly-increased items, prices for liquid

chlorine have difficulties in stabilizing.

2.4.2 Propylene Oxide Facility Latest Movement:

◆Fangda Jinhua Chemical’s polyether polyols

facility shut down on May 9 for 4-5 days and

during this maintenance period, propylene oxide

commodities sold outside increased to 240-250

tons from 100-120 tons. On May 13, polyether

polyols facility reopened with commodities

outside of 180 tons. Meanwhile, its 40ktpa

propylene oxide facility shut down for

maintenance on May 24 and restarted on May 27.

The annual maintenance of all its devices will be

conducted from June 10-15.

◆Shenyang G-Billow Chemical’s PO/PPG facility

shut down on April 30 and restarted on May 2

with propylene oxide daily output of 120 tons and

later, its propylene oxide output will be sold

outside completely. Its flexible polyols daily output

keeps 30-40 tons and its polyether polyols device

will shut down on May 23 with restart time unclear.

Additionally, its 40ktpa polyether polyols facility

will be modified in technology;

◆Shandong Bluestar Dongda Chemical Co.,Ltd’s

propylene oxide facility restarted on April 30 and

now it operates with loads of 90%;

◆Tianjin Dagu’s polyether polyols facility will shut

down for maintenance from May 26 to June 8 and

its propylene oxide device now operates with

loads of 50% and the operation rates will

decrease to 30% at the end of this month;

◆Shandong Shida Shenghua Chemical will shut

down its propylene oxide facility from May 21-28

and now its daily output keeps 140 tons with

commodities outside of 40 tons;

◆ Shandong Dongchen Chemical’s propylene

oxide device reopened on May 18 and now it

operates 80% with daily output of 130 tons;

◆Shandong Binhua Chemical broke off on May 4

due to the power outage for about 40 hours and

the maintenance plan of its propylene oxide

device has been delayed to June21/22 for abut

half a month;

◆Ningbo ZRCC Lyondell Chemical’s propylene

oxide facility runs 100% with daily output of 800

tons;

◆ Nanjing KUMHO GPRO Chemical Group’s

propylene oxide device runs with full loads and

they mainly serve for their regular clients.

Shanghai Suntower Business Consulting Page 9

Page 10: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

2.4.3 Import & Export Data Table 11: China PO Import/Export Flow from January to April 2011 (Tons)

HS Code: 29102000 Month

Import Export

201101 26164 0

201102 20251 0

201103 37072 0.012

201104 22628 0.006

Total 106115 0.018

2.4.4 Future Market Preview

The PO facility in Saudi Arabia will be expected to restart on July 3 and Singapore Shell will also

ramp up the operation rates along with its cracker facility resumption. In order to evade the risks caused

by the influx of oversea materials, domestic sellers may reduce prices in advance to release the risks.

In June, prices will begin to fall off but when prices come to some certain level, domestic suppliers

may restrict production to protect prices.

. 2.5 Polyether Polyols

Flexible Polyols Restrained by the high costs pressures, propylene oxide prices are much higher than that of flexible

polyols and thus polyether polyols profits prove to be very thin and even at a loss. This month, polyether

polyols producers mainly cut down their flexible polyols outputs and turn to produce stocks with high

added value.

However, because of the profits erosion caused by high-priced propylene oxide, polyether polyols

providers have to curtail their outputs of the high value-added materials. In late May, some northern

polyether polyols producers conduct the maintenance in succession and in early June, partial producers

will enter into the maintenance period successively to remit the inventory pressures.

Flexible Polyols (HR) Owing to the thin profits of flexible polyols, suppliers now mainly produce flexible polyols (HR) and

POP stocks with high profits. Meanwhile, along with the increasing base polyether polyols, the

mainstream transaction prices for flexible polyols (HR) (330N) drums ascend slowly as well.

Besides, it is said that the price hike from terminal downstream sectors proves to be small and their

profits have been eroded completely by upstream fields. Therefore, they dare not to receive the orders

and thus their procurements for raw materials are very feeble.

Rigid Polyols This month, prices for medium stocks in the north are mainly at RMB15000-15200/ton while in the

east, high-end materials are dealt at RMB15100-15600/ton and medium and low-ends at

RMB14200-14800/ton. Suffering the high costs of propylene oxide, polyether polyols providers now

mainly run at low levels and meanwhile, demands from terminal market are still poor and downstream

users have no inclinations to purchase due to the high costs pressures.

Shanghai Suntower Business Consulting Page 10

Page 11: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Polymeric Polyols Along with the ascending base polyether polyols, POP (slabstock) drums in the south are mainly

sold at RMB18000-18600/ton and later, the mainstream transaction prices descend to

RMB18000-18200/ton and partial materials are dealt at low prices of RMB17500-17700/ton.

For the moment, oversupply is the main tone of the polymeric polyols market and the differences in

prices between high-end and low-end materials remain at RMB1000/ton with fierce competitions.

Considering POP (HR) drums in the south, the mainstream transaction prices ascend to

RMB18500-18800/ton from RMB18300-18800/ton and partial medium and low-end stocks are dealt at

lower prices. Elastomer Polyols

In the south, elastomer polyols mainstream transaction prices ascend to RMB17400-17800/t from

RMB17300-17600/ton while in the north, quotations in the locality increase to RMB17400-17600/t from

RMB17300-17400/ton.

For the moment, both suppliers and traders possess certain inventories and the subsequent

mainstream transaction prices will move to RMB17000-17400/ton. Northern bulks are mainly traded at

lower prices of RMB16400-16500/ton.

Table 12: Monthly Polyols RMB and USD Prices Comparison

Products Types Unit May Average

Price

April Average

Price Fluctuation Remarks

China RMB/ton 16775-17025 16450-16575 325, 450 Bulk/Delivery

Import USD/ton 2500-2550 2488-2538 12, 12 Drum/CIF Flexible Slabstock

Polyols Export USD/ton 2558-2608 2538-2588 20, 20 Drum/FOB

China RMB/ton 17750-18200 17525-17925 225, 275 Drum/Delivery Flexible Polyols

(HR) Export USD/ton 2600-2650 2550-2600 50, 50 Drum/FOB

China RMB/ton 18050-18600 17825-18350 225, 250 Drum/Delivery

Import USD/ton 2650-2700 2650-2700 n/c, n/c Drum/CIF POP (slabstock)

Export USD/ton 2658-2708 2650-2700 8, 8 Drum/FOB

POP (HR) China RMB/ton 18475-18950 18300-18600 175, 350 Drum/Delivery

China RMB/ton 17525-17775 17125-17475 400, 300 Drum/Delivery Elastomer Polyols

Export USD/ton 2600-2650 2550-2600 50, 50 Drum/FOB

Rigid Polyols China RMB/ton 14400-15550 14400-15200 n/c, 350 Drum/Delivery

Note: China : Flexible Slabstock Polyols brands: 5623① 、5613、560S、3031K、5616, etc;

Flexible Polyols (HR) brands: 330N② 、820、703、3603, etc;

Rigid Polyols brands: Conventional rigid polyols 4110; ③

POP (④ slabstock) brands: 2045、2042;

⑤ POP (HR) brands: 3628、3630, etc.

⑥ Elastomer Polyols brands: 220, 210, etc.

Imports: Flexible Slabstock Polyols brands include: 5613① 、2025A、5616, etc.

POP(② slabstock) refers to 42-45% solid content polymeric polyols.

Exports: Flexible Slabstock Polyols includes the MW 3000;①

② POP (common-grade) refers to 42-45% solid content polymeric polyols;

Shanghai Suntower Business Consulting Page 11

Page 12: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

HR Polyols: MW 4800③ -5000, such as 330N;

Elastomer Polyols: MW 1000 and MW 2000, such as 210/220.④

RMB Cost=USD CIF price *(1+17%)*(1+6.5%)*Exchange Rate+ Import Port Charge

(Only available for calculating the costs of China polyether polyols imports. 17%: VAT Rate; 6.5%: Import Duty

Rate but Singapore with zero duty.)

n/c refers to “No Change”.

Graph 5: Polyether Polyols Weekly Price Trend from 2010 to 2011

Source:PUdaily.com500

1100

1700

2300

2900

3500

4100

4700

8-Jan-10

26-Feb-10

16-Apr-10

4-Jun-10

23-Jul-10

10-Sep-10

29-Oct-10

17-Dec-10

4-Feb-11

25-Mar-11

13-May-11

Date

US

D/M

T

2000

6000

10000

14000

18000

22000

26000

RM

B/M

T

USDRMB

Note: ①RMB refers to E-China, Bulk /Delivery;

②USD refers to Drum/CIF China

2.5.1 Upstream Feedstocks

After undergoing the long-term increase of acrylonitrile in the early May, downstream users finally

fail to bear the high costs pressures and thus most of them begin to cut down operation rates or close

their facility in succession. Consequently, acrylonitrile suppliers have to regulate down their quotations

and the market rushes into the downslide. Approaching to late May, the market rebounds slightly.

Styrene Market: In May, following stock market and the main tendency of domestic goods, styrene

market plummets in a straight line and major downstream plants operate at low levels with shrinking

profits. As for downstream sectors, restrained by the electricity rationing policy and the rise of deposit

reserve ratio, major styrene downstream industries’ profits curtail and their operation rates remain at low

levels. Meanwhile, their capitals are short.

2.5.2 Asian Polyether Polyols Facility Latest Movement

◆Fangda Jinhua Chemical’s polyether polyols

facility shut down on May 9 for 4-5 days with

daily output of 100 tons and it restarted on May

13 with day output of 120-130 tons. Meanwhile,

Shanghai Suntower Business Consulting Page 12

Page 13: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

all of their devices will be conducted

maintenance from June 10 to June 15;

◆ Shenyang G-Billow Chemical’s PO/PPG

facility shut down on April 30 and restarted on

May 2. Later, its polyether polyols facility closed

on May 23 with restart time unclear. Meanwhile,

its 40ktpa polyether polyols device is in the

improvement in technology;

◆Shandong Dongda’s polyether polyols facility

restarted on April 30 and their operation rates

decreased to 50% from 70-80%;

◆Tianjin Dagu’s polyether polyols facility now

runs with loads of 50% and it will be shut down

for maintenance from May 26 to June 8;

◆ Zibo Dexin Lianbang’s polyether polyols

device shut down in middle May for a short time.

2.5.3 Import & Export

Table 13: China Polyols Export/Import Flow from

January to April 2011 (Tons)

HS Code: 39072090 Month

Import Export

201101 36482 14373

201102 18855 12018

201103 38736 22214

201104 31347 25492

201101-04 125420 74096

Table 14: China Pure MDI Export Destinations in

Aril 2011 (Tons)

Destinations Quantities

India 3715

Hong Kong 2473

Taiwan 2386

Malaysia 2171

Pakistan 1838

Indonesia 1504

Singapore 1248

Japan 1049

South Korea 1008

Turkey 824

2.5.4 Future Market Preview Although polyols factories cut operation rates down, inventories are still on its high level. Along with

PO prices to plunge substantially, polyols competitions will be much horrifying, particularly for those who

have no internal PO facility.

After several weeks’ disposing activity in South China in advance, the sales pressure is gradually

transferred to the eastern and northern markets. In June, polyols market seems hard to touch the bottom.

2.6 PTMEG Market

During this month, domestic PTEMG market quotations stay smooth but the overall transaction

volumes decline to a large extent. In May, the upstream BDO market and THF market is filled with

bearish sentiments and the low prices are ceaselessly being heard and the later cost pressures of

PTMEG suppliers will be alleviated to some extent.

Along with the restart of Mitsubishi Ningbo’s PTEMG facility, the supplies of 2000mol/g materials

Shanghai Suntower Business Consulting Page 13

Page 14: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

tend to increase, which will lead the price of 2000mol/g materials to decrease. As for the imports, the

supplies of PTG, Mitsubishi and Invista stocks keep at low levels but under the condition of insufficient

downstream demands, the transactions at high prices are still difficult.

Considering downstream clients, the demands from spandex and elastomer industries prove to be

passable but PU resin industry operates at low levels. On the whole, the transaction volumes in this

month decline obviously.

Table 15: Monthly PTMEG RMB and USD Prices Comparison

Products Types Unit May Average

Price

April Average

Price Fluctuation Remarks

China RMB/ton 30200-30600 30200-30600 n/c, n/c Drum/Ex-factoryPTMEG (1800)

Imports USD/ton 3800-3850 3800-3850 n/c, n/c Drum/CIF

China RMB/ton 33500-35200 33500-35200 n/c, n/c Drum/Ex-factoryPTMEG (2000)

Imports USD/ton 4250-4450 4250-4450 n/c, n/c Drum/CIF

China RMB/ton 35000-37500 35000-37500 n/c, n/c Drum/Ex-factoryPTMEG (1000)

Imports USD/ton 4450-4600 4450-4600 n/c, n/c Drum/CIF

Notes: RMB Cost=USD CIF price *(1+17%)*(1+3%) *Exchange Rate+ Import Port Charge

(Only available for calculating the costs of China PTMEG imports. 17%: VAT rate; 3%: Import duty rate )

n/c refers to “No Change”.

Graph 6: PTMEG Weekly Price Trend from 2010 to 2011

Source: PUdaily.com1500

2000

2500

3000

3500

4000

4500

5000

8-Jan-10

19-Feb-10

2-Apr-10

14-May-10

25-Jun-10

6-Aug-10

17-Sep-10

29-Oct-10

10-Dec-10

21-Jan-11

4-Mar-11

15-Apr-11

27-May-11

Date

US

D/M

T

20000

23000

26000

29000

32000

35000

38000

41000

RM

B/M

T

USDRMB

Note: ①RMB refers to E-China, 2000 mol/g Drum/Ex-factory;

②USD refers to Drum/CIF China

2.6.1 Upstream Feedstocks-BDO&THF

Shanghai Suntower Business Consulting Page 14

This month, domestic market demands shrink to some extent and the market price is forced to be

regulated down. Along with the restart of Shanxi Sanwei Group’s maleic anhydride facility and coupled

Page 15: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

with declining contract volumes, the market supplies tend to enlarge gradually. Therefore, domestic

BDO suppliers are forced to revise down their quotations.

Meanwhile, bearish atmosphere still pervades the trading market and downstream users are still

reluctant to purchase, which greatly strikes traders’ mentalities and thus the transaction prices slip down

step by step. Considering downstream sectors, the overall industries reduce the operation rates,

especially for PU resin industry.

In May, domestic THF market transactions keep the unsmooth state and the transaction prices

decline gradually.

As for domestic suppliers, Nanjing Bluestar New Chemical Materials Company revises down its

quotations from RMB34000/ton to RMB 32000/ton; Sinopec Taicang Chemical Industry Park declines

its quotations from RMB32000/ton to RMB 31000 /ton. Besides, traders are faced with selling difficulties

and the transaction prices continue to fall. Among which, the quotations of home-made materials

descend by RMB1000/ton while the prices of Nan Ya stocks decline by RMB500/ton.

2.6.2 Asian PTMEG Facilities Movement

◆Sinochem Taicang Chemical Industry Park’s

PTMEG facility runs normally with 70% operation

rates and according to the insiders, the order

volumes from downstream users tend to shrink.

However, due to the cost pressure and slender

profits, the company shows no inclinations of

declining its quotations.

◆Hangzhou Qingyun Holding Group’s PTMEG

facility operates regularly at 60-70% with smooth

quotations.

◆ Japan Mitsubishi’s PTMEG facility operates

steadily.

◆ Mitsubishi Ningbo’s PTMEG facility has

resumed the production and now due to the

limited inventories it offers no quotations.

2.6.3 Import & Export Data

Table 16: China PTMEG Export/Import Flow from January to April 2011 (Tons)

HS Code: 39072010 Month

Import Export

201101 9978 763

201102 5643 887

201103 11323 994

201104 9724 1063

201101-04 45097 4274

2.6.4 Future Market Preview

Shanghai Suntower Business Consulting Page 15

Under the background of low inventory, domestic traders refuse to reduce prices to promote the

sales of imported materials. In addition, the USD prices for some brands are on the rise in June and thus

imported PTMEG stocks are hopeful to be kept at high levels although transaction volumes may further

to shrink.

Page 16: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

For home-made stocks, its upstream feedstocks of BDO and THF are on the downward, which is

negative for PTMEG market but domestic PTMEG manufacturers show little desire to cut prices down

due to slim profits. What’s worse, downstream demands turn to weakness and it is predicted that

PTMEG prices in China will fluctuate moderately in the short run.

3. Downstream Industries

Upholstered Furniture According to the feedbacks from downstream factories, it is a

bit earlier for PU foam industry to come into its slack season in

March this year. Consequently, sponge factories have to cut

operation rates to 40%-50% and demands for PU feedstocks are

shrinking accordingly.

Sponge producers complaint that they are facing large costs

pressure due to escalated PU materials; what’s worse, furniture

orders this year are decreasing.

Refrigerators It is reported that in the first four months this year, China

refrigerators have been sold 22.69 million units, including 2.104

million units in domestic market, up 13.5% and 16% compared with

the same period of last year. However, the sales growth rate has

plunged dramatically.

Automobile Sources from National Bureau of Statistics of China, auto sales in

May reach to 1,430,000 units, down 1.9% year-on-year (YOY),

including 760,000 cars, up 3.3% YOY.

In the first five months, auto sales amount to 8,060,000 units,

increase by 5.2% YOY, including 4,230,000 units, up 7% YOY.

It is indicated that auto sales have slowed down obviously and

come into the negative growing times.

Elastomer It is the traditional rainy season in May and June in the south

and by convention, elastomer will come into the peak season from

July.

In August, plastic track industry will welcome its peak season

and some downstream PU Skateboard wheels can keep favorable profits.

Shanghai Suntower Business Consulting Page 16

Page 17: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

PU Resin In May, shoe soles and PU resin industries can only keep

50%-60% operation rates and some small sized factories even

cut operation rates to 20%-40%.

In addition, some medium and small sized shoe-making and

clothing enterprises get into scrapes.

Spandex In May, the overall operation rates have no obvious decrease

and spandex sales remain in the doldrums and inventories are

increasing step by step. Domestic factories have held several

meetings to discuss the production reduction plans this month.

Presently, downstream weaving, textile and garment

factories are prudent to receive orders, which lead to the

continuously fragile demands for spandex. Additionally, electricity

ration in Zhejiang is serious and thus spandex operation rates in

the future are worrying.

4. Big Events in May in Detail 4.1 Company Dynamics in May

Systems House Broke Ground in Tianjin BASF SE broke ground April 20 on its new polyurethane systems house in Tianjin.

The facility will offer customized polyurethane solutions to its customers, supported by local

production, in-house sales, technical service and development teams.The plant is expected to start up in

2012 and will join BASF’s worldwide network, which currently includes 38 system houses.

“The Northern China region is witnessing a thriving PU market with above-average growth rates and

considerable increases in production and demand in the years to come,” said Melanie Maas-Brunner,

senior vice president of polyurethanes in Asia Pacific, in a news release.

She highlighted BASF’s capacity to

provide service rapidly growing sectors such

as construction and automotive, as well as

emerging markets for renewable energy such

as wind and solar energy.

China is already the largest polyurethane

market in the world and is forecast to

maintain strong growth in the coming decade,

noted BASF. The company already has two

systems houses and regional development

centers in Shanghai and Nansha.

Shanghai Suntower Business Consulting Page 17

Page 18: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

ASF Warns on Overexpansion in Asia There is a danger that overinvestment in

petro

amounts of capacity additions, coupled with

mor

head of BASF's petrochemicals business in A

al industry globally are making companies undertake

majo

B

chemical expansions in Asia will lead to overcapacity,

margin erosion and the next big down cycle by 2015, a

senior executive with German chemical major BASF said

on Friday.

Large

e moderate economic growth in China and the

Asia-Pacific region, will create the perfect conditions for a

major down cycle in chemicals, said Torsten Penkuhn, the

sia.

The current favorable conditions for the chemic

r expansion decisions without considering the possibility that those decisions will contribute to a

down cycle, he said. More

ASF to Build World's Largest Single-Train TDI Plant in Europe

TDI (toluene diisocyanate)

plan

B

Ludwigshafen, Germany– BASF will build the world's largest single-train

t in Europe. The plant will have a capacity of 300,000 metric tons per year and will be fully integrated

with precursor production. The TDI plant will be located at one of the company's integrated Verbund sites

in Antwerp, Belgium or Ludwigshafen, Germany and will start production in 2014. Engineering is

underway and the final site selection will be announced shortly. TDI is a key component used for

polyurethane foams. More

ayer MaterialScience to Invest $120M in Texas Plant American

hea

makes Methylene diphenyl diisocynate (MDI) and Toluene

diiso

BBayer MaterialScience LLC, which has its North

dquarters in Robinson, is investing roughly $120 million in its Texas

chemical manufacturing site. The work is happening at the Baytown,

Texas, site which is a major facility in the company's global manufacturing

strategy.

The plant

cyanate (TDI), which are chemicals used in polyurethanes in foam for

furniture and automotive uses, coatings, adhesives and sealants. It also

makes polycarbonate, which is used in automotive lights, data storage,

medical devices and shatter-proof lenses. The upgrades are expected to

improve processes, reliability and environmental performance. More

ayer is to Expand Its MDI and HDI Capacity in Shanghai

uction

site

BOn the groundbreaking ceremony of polyurethane system prod

in Qingdao on May 24, vice president Dr.AzitaOwlia of Bayer

Shanghai Suntower Business Consulting Page 18

Page 19: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Materialscience Polyurethane Division said that Bayer would

expand its 350 kt/y MDI facility to 1000 kt/y in Shanghai

Chemical Industry Park, and the HDI capacity would also be

expanded to 80 kt/y.

Dr. Ou added that except from the current 350 kt/y was

going to be expanded to 500 kt/y, there would be another 500

kt/y facility to build there, and the 80 kt/y HDI facility included

the newly added 50 kt/y. Polycarbonate business' HQ will also

be moved to Shanghai and its capacity will be expanded to 500

kt/y. More

Chery Auto, Bayer Partner up on Lightweight Materials for Vehicles China's automaker Chery Auto and Bayer Group have

jointly set up a lab to research and develop lightweight

materials for automobiles, Chery announced Friday.

"The establishment of the lab with Bayer MaterialScience

is an important step for Chery Auto on the research and

development of automobile material technologies," said Jin

Yibo, a spokesman with Chery Auto.

"Chery Auto aims to promote automobile lightweight

technologies and develop energy-saving and environmentally friendly lightweight automobiles with the

help of Bayer technologies," Jin added. More

Cangzhou Dahua Optimizes TDI Energy Utilization PUdaily, Shanghai-Since late last year, Cangzhou Dahua Group Co.,Ltd has been in the process of

technical transformation and about 4 projects have been optimized.

As a result, about 5,544 tons steam can be recovered averagely

every year with 1,650 tons coke being saved. Meanwhile, about 5

million Yuan costs can be saved as well.

Before using jacket with withstand voltage, Cangzhou Dahua's

steam in great quantities has to be released outward and this has not

only caused abundant energy losses but also brought thermal

pollution to air. More

Dow Chemical Expects Lawsuit Decision in Case Versus Kuwait Petrochemical The Dow Chemical Co. expects a resolution this year in its

complaint against Kuwait's Petrochemical Industries Co. for backing

out of a proposed $17.4 billion joint venture in December 2008.

Dow is seeking more than $2 billion in damages after PIC

unexpectedly pulled out of the K-Dow Petrochemicals joint venture

Shanghai Suntower Business Consulting Page 19

Page 20: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

days before it was supposed to being operations. Dow was set to receive $7.5 billion cash in the deal

from PIC and another one-time $1.5 billion payout from K-Dow once the company was formed. The deal

fell through shortly before Dow purchased Rohm and Haas Co., and the $9 billion was to go toward that

purchase.

Dow Chairman and CEO Andrew Liveris said Thursday that both sides have finished submitting

evidence and a decision is expected by the end of the year. More

DuPont Packaging & Industrial Polymers to Increase Capacity at Dordrecht, Netherland DuPont Packaging & Industrial Polymers today announced

that it will increase capacity at its site at Dordrecht, Netherlands,

to meet strong demand for specialty copolymers, DuPont Bynel

adhesive resins, DuPont Fusabond modifier resins and DuPont

Appeel lidding sealants used in packaging, construction and

industrial markets. The expansion enhances the company's

global network of manufacturing capabilities which includes sites

Pacific.

in the North America, Europe and Asia

More

Elevance R enewable Sciences a nd Royal DSM t o Collaborate f or Bio-based Specialty Thermoplastic Materials Elevance Renewable Sciences, Inc. and Royal

DSM N.V. announce they have signed a Letter of Intent

for a collaboration to evaluate Elevance's unique

monomers for production of specialty bio-based high

performance thermoplastic materials, for DSM ’ s

engineering plastics portfolio.

Elevance will provide natural monomers produced

from plant oils along with its proprietary metathesis technology to enable the production of various

polymers. DSM will provide expertise on polymer research, application development and

commercialization.

"Partnering with Elevance enables DSM to further broaden our portfolio of products that provide

improved performance over existing polymer solutions," said Roelof Westerbeek, president of DSM

Engineering Plastics. More

Fujian Putian 10,000 tons/year Water-Soluble Polyurethane Project Goes Into Production PUdaily, Shanghai-China-Huayu (Fujian) Technology Development Co., Ltd's 10,000 tons/year

water-soluble polyurethane project is going into production and its phase II project construction of

100,000 tons/year device is about to start working and the opening ceremony has been held recently in

Chengxiang Hualin Industrial Park in Fujian Putian.

This project has been listed in national-863 development item on water-soluble polyurethane that

can be widely used in shoes. These products fill the gaps in China.

Shanghai Suntower Business Consulting Page 20

Page 21: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

After putting into production, the annual production value of phase I project will achieve 0.3 billion

and the phase II project is expected to realize that of 3 billion.

Huafon Microfibre (Shanghai) Co., Ltd Costs ERU 9 Million to Purchase Production Lines PUdaily, Shanghai-Today (May 24), Huafon Microfibre (Shanghai) Co., Ltd signs two purchasing

contracts with Dilo. The contract totally costs EUR 9, 000, 000 (about RMB 8, 218, 000, 000) and it

contains four production lines of special sea-island fibre acupuncture non-woven.

Among which, two production lines are used for building 6, 000, 000 square meters superfine

polyurethane leather, costing RMB 4, 109 while other two lines are made for building 1, 440 square

meters/year microfibre cloth project and the project will be financed by enterprise's own resources. More

INVISTA Opens Spandex Plant Expansion in Foshan, China

FOSHAN, China, May 5, 2011 -- INVISTA, the recognized

leader in spandex production and a wide range of other apparel

fibers, fabric treatment and fabric technologies, expanded its

spandex venture plant in Foshan.

The plant will add approximately 12.5 kilotons of spandex

production, raising total annual capacity to 24.5 kilotons in response to Asia's growing demand of

high-quality spandex products.

With a total investment of more than US$227 million, the venture between INVISTA and Foshan

Plastics Group Co., Ltd remains the largest foreign investment ever in Guangdong's fiber industry.

The plant now operates four production lines producing spandex fibers for multiple textile processing

applications. More

LANXESS Completes Acquisition of DSM Elastomers

The specialty chemicals group LANXESS has successfully completed

the acquisition of DSM Elastomers. The antitrust authorities have granted

the approvals that are necessary for completion. The transaction took

economic effect on May 1, 2011.

LANXESS is paying EUR 310 million for the elastomer business of the

Dutch company Royal DSM N.V. DSM Elastomers produces the synthetic rubber

ethylene-propylene-diene monomer (EPDM) under the brand name Keltan. LANXESS is financing the

acquisition with existing liquidity.

"The successfully completed acquisition of this elastomer business is a further milestone on our

growth path," said LANXESS CEO Axel C. Heitmann. More

Perstorp Increases Polyol Capacity With Investment in China

Perstorp invests in extended capacity for the polyalcohol Neopentyl

Glycol by establishing production at the Group’s manufacturing site in

Zibo, China, with planned production start during the second half of 2012.

Shanghai Suntower Business Consulting Page 21

Page 22: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

"This investment is yet another step for us to strengthen our presence in Asia and it is fully in line

with our strategies going forward. With this new capacity Perstorp will cement its position as one of the

leading producers of Neopentyl Glycol, making it possible to take part of the fast and strong growth in this

region", President and CEO Martin Lundin says.

Planned to be up and running during the second half of 2012, the new capacity will be established at

Perstorp’s manufacturing site in Zibo in China through Perstorp’s joint venture Shandong Fufeng

Perstorp Chemical Co., Ltd. More

Shanghai Dongda Chemical's Polyurethane Project Begins Construction PUdaily, Shanghai-It is reported that a foundation

stone laying ceremony of Shanghai Dongda Chemical's

50kt/year polyurethane and 50kt/year specialty polyols

project has been held and meanwhile, Chairman Xujun

took part in the ceremony.

This project is totally invested with RMB0.2 billion,

including 10kt/year PU systems, 40kt/year CASE series

products and 50kt/year specialty polyols monomer project

(MPEG and APEG series products).

These products are widely used in building energy-efficient heat preservation system, airplane, seat

cushion, refrigerator, solar energy heat preservation, high-speed rail, tunnel, concrete water reducing

agent, coating emulsifier, upscale detergent etc. More

PPG Issues 2010 Corporate Sustainability Report PITTSBURGH, May 03, 2011–PPG Industries (NYSE: PPG) has

issued a corporate sustainability report for 2010, which expands on and

enhances the scope of information provided in the company's first full

report for 2008. The document provides in-depth details regarding

PPG's status and progress on economic, environmental, safety and

social-involvement initiatives.

"In this second full sustainability report, readers will see the

measurement of our efforts over the past two years, but also specific examples of how we have elevated

our approach and challenged ourselves to grow in a sustainable way," said Charles E. Bunch, PPG

chairman and CEO.

"We have enhanced our monitoring and tracking for a range of measures for economic,

environmental and social factors, which in turn has enabled us to expand our reporting and to

communicate even more transparently about our progress." More

Polyurethane Adhesive Plant Nanjing Fuller Opens Up in China

PUdaily, Shanghai-May 18, 2011, the first reactive polyurethane adhesive plant, established by the

multinational corporation H.B. Fuller Company (NYSE: FUL), went into operation in Nanjing Chemical

Shanghai Suntower Business Consulting Page 22

Page 23: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Industrial Park, China. This project has been totally invested

1,200,000 dollars and it mainly engages in polyurethane adhesive

and other reactive adhesive products with 10,000 tons annual

output.

As Chinese automobile sales have been the world's leader for

two consecutive years, domestic market demand for automobile

adhesive moves into rapid development period and China has

become the world adhesive production and consumption power

industry.

However, the sales prices of home-made adhesive are generally

lower two-thirds than the prices of multinational corporation products and meanwhile, home-made

materials mainly occupy the low end of the market and thus it is nearly blank in high-end market. More

ABIC, Asahi Kasei and Mitsubishi Form Joint Venture

and

)

and

-scale plants with capa

AN

Al-Mady, Sabic vice-chairman and CEO, said: “A key driver for the project is Saudi

Arab

ortant chemicals for the downstream diversification into acrylonitrile

buta

umitomo Chemical Sets Up Dalian Plant to Seize Auto Raw Material Market

May

lion yen (50% is

finan

SSaudi Basic Industries Corp, Asahi Kasei Chemicals Corp.

Mitsubishi Corp. have signed an agreement to form a

limited liability company, Saudi Japanese Acrylonitrile Co.

The company will build a plant to make acrylonitrile (AN

sodium cyanide (NaCN), with subsequent sales and

distribution to be carried by the partners.

The agreed plan is to establish world cities of 200,000 metric tons per year of

and 40,000 metric tons per year of NaCN at one of the Sabic affiliates’ sites in Jubail Industrial City,

Saudi Arabia.

Mohamed

ia’s National Industrial Clusters Development Program aimed at growing and diversifying the

Kingdom’s manufacturing sector.

“AN and NaCN are very imp

diene styrene (ABS), carbon fiber, acrylic fiber, acrylamide and others which serve various industries

such as automotive, construction, water treatment, oil recovery, personal care, consumer goods,

pharmaceuticals, electronics, gold mining and many others.”

SPUdaily, Shanghai-Japan Sumitomo Chemical announced on

25 to build a plant in Dalian, China to manufacture

high-functioning resin and polypropylene products(raw materials of

automobile bumper and interior decoration). This project aimed to

cater to Japanese auto manufacturers' and local producers' demands

It is reported that the total investment amount of this new plant is about 1.2 bil

in North China.

ced by Japan Sumitomo Chemical Headquarters and the other half is contributed by the

Shanghai Suntower Business Consulting Page 23

Page 24: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

joint-venture subsidiary of Sumitomo Chemical (Zhuhai) Company and Toyo Ink Mfg Co.). The project is

planned to be on stream in 2012 with expected annual output of 10,000 tons. More

US-based Momentive to Sell Wood Resin Business US-based specialty chemicals and materials company

Momentive Performance Materials has put its forest products resins

business and its acrylic monomers unit on the selling block, sources

in the financial community said on Wednesday.

US-based investment banks Goldman Sachs and Morgan Stanley are handling the sale of the forest

products resins business, while The PrinceRidge Group is selling the acrylic monomers unit, sources

said. More

Yantai Wanhua Conducts the MDI Expansion Plan in Ningbo Base PUdaily, Shanghai-After completing the 300ktpa MDI and

360ktpa aniline project in Ningbo base, Yantai Wanhua will own

altogether 800ktpa MDI capacities (200ktpa in Yantai, 600ktpa in

Ningbo), which ranks in the top of domestic MDI enterprises.

This expansion project of 600kpa MDI facility has relatively

short construction cycle for one and a half or two years. Among which, 100ktpa new capacity will be

finished in 2011 and other 500ktpa capacity is expected to be completed in late 2012 or early 2013.

Until 2013, the MDI project in Yantai will be put into production gradually and meanwhile, the

company's products and capacities will keep the growth. In the next three years, Wanhua will achieve the

rapid growth of MDI capacities, which will test the marketing capacity of the company. More

Yantai Wanhua Polyurethanes and Huntsman Sign PO/MTBE License Agreement THE WOODLANDS, Texas-- Huntsman Corporation (NYSE: HUN) today announced that it has

signed a license agreement with Chinese chemicals manufacturer Yantai Wanhua Polyurethanes Co.,

Ltd., for the production of Propylene Oxide (PO) and Methyl Tertiary Butyl Ether (MTBE) - a co-product of

PO. The financial terms of the arrangement were not disclosed.

Yantai Wanhua, a leading Asian polyurethanes producer, plans to leverage the license to build a

world scale PO/ MTBE plant at its facility in Yantai, Shandong province, with construction expected to

commence later this year and beneficial production due in late 2013. More

4.2 PU Markets Spotlight in May Asian Polymers Market Demand Develops Rapidly, Transnationals Expand Investments

PUdaily, Shanghai-According to related data, the emerging

economies in China, India, Latin America and Central Europe have

strong developing momentums and thus global demands for polymers

will grow rapidly. It is predicted that global polymers market will keep

annual 5% growth rate in the next five years.

Shanghai Suntower Business Consulting Page 24

Page 25: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

The analyst points out, along with the continuous development of economic globalization, the

emerging economies companies will develop rapidly and thus it attracts many large scale enterprises.

Especially in Asian emerging economies market, China and India perform to be swift growth and recently,

many large transnational chemical corporations enlarge their investments in Asia. More

Broad Application of Polyurethan hanghai-According to "long-term railway network

plan

hane increase greatly and this also open up

anot

e in High–speed Railway PUdaily, S

ning", discussed and passed by the State Council in 2004,

the total mileage of national railway will surpass 100,000 km by

2020, including more than 12,000 km non-fragment passenger

dedicated line will be laid with speed of 200Km/hour.

As a result, demands for high-performance materials

including polyuret

her area in polyurethane industry. More

omestic Maleic Anhydride Market Is Faced With Technique Adjustment

mar

rease is

main

DPUdaily, Shanghai-In April, domestic maleic anhydride

ket terminated the rapid downtrend of March and since

mid-April, the market tended to get warm gradually. On May

4, domestic transaction prices of maleic anhydride broke

through ten-thousand levels and reached to RMB10400/ton

and meanwhile, the high-end materials even increased to

RMB10800/ton, up 9% compared with last month.

Seen from the market transactions, the price inc

ly caused by promotion of feedstock market, the

stockpiling of sellers, the shutdown of partial providers and

However, affected by insufficient upstream supports, downstream wait-and-see sentiments and the

overquick rising trend, maleic anhydride market tends to be faced with technical adjustment pressure. If

the market can hold out the ten-thousand RMB market prices, the later maleic anhydride market is

expected to step into the booming period authentically.

the increasing downstream large orders.

More

DI Industry Steps into Boom Period, Competition Among Enterprises Be More Drastic

MDI

r 3 years, China's demand for

MDI

MPUdaily, Shanghai-Recently, the market supplies of

products decrease to some extent and thus it is

predicted that China's MDI market supply will become

strained with increasing demands and the market

quotation will turn better.

Seen from the next 2 o

will ascend by 150,000-200,000 tons every year and

meanwhile, the demand in Europe and America will

Shanghai Suntower Business Consulting Page 25

Page 26: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

improve as well. It is estimated that the global demand for MDI will reach 300,000 tons every year.

As a whole, steadily increasing demands, limited outputs from newly-built facilities and downtrend of

aniline price will jointly push MDI industry into the boom period. More

arket Size of China's Refrigerator Industry This Year Will Reach 50 Million units

App

ces,

und

ed high growth. State Information Center released data

show

incre

O/PPG: Whether Downstream Users Will Continue to Tolerate Price Hike Is Worth Watching

whil

and

MWang Lei, vice chairman of the China Household Electrical

liances Association, 25, held in the national grid, "Refrigerator

Industry Development Summit Forum", said the policy effects of the

weakening of the domestic refrigerator industry this year, will slow the

pace of development, but is still expected to remain throughout the year

10% of the growth rate, reaching 50 million units in the market.

In 2010, the domestic refrigerator market in home applian

er the influence of trade-in policies to achieve rapid growth, the

domestic sales volume of major cities in the refrigerator the whole of

2300 million units, an increase of 28%. The first quarter and into 2011,

domestic sales volume of major cities in the refrigerator of 435 million uni

increase slowed down very significantly.

However, three or four markets remain

ts, an increase of 8%, an

that the first quarter of this year, the domestic three, four, respectively, year on year sales growth of

the refrigerator market, 28%, 44%, higher than the industry growth levels of 20 and 35 percentage points.

Editor Lvsheng Hua said in the national grid, channel sink chain and benefit from enterprises to

ase three or four market development, structural adjustment to the three refrigerators, four speed

transmission market, enterprises to adopt a more flexible market strategy, the local needs of the market

played an important role in upgrading.

PPUdaily, Shanghai-Oil prices rush down recently

e it still seems to fail to impact propylene oxide

market badly. However, coupled with the arrivals in May,

propylene oxide this week presents to be relatively

stable after going through the sudden rises last week.

Fangda Jinhua Chemical increases its sales outside

partial downstream polyether polyols plants turn to

reduce productions while minority facilities have been s

propylene oxide facility starts to resume gradually, tight supply in May is predicted to be relieved to some

extent.

hut down. Besides, as previous shutdown of

More

olyurethane Industry in China and India Will Develop Rapidly in Next Five Years e products

have infiltrated into various fields in our lives. Along with the continuous development of science and

P

Shanghai Suntower Business Consulting Page 26

PUdaily, Shanghai-Owing to the excellent physical and chemical properties, polyurethan

Page 27: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

tech

n and consumption

coun

nology, the application fields of polyurethane products

tend to broaden gradually and in China, the growth rate of

polyurethane outputs exceed that of GDP all the way.

As one of the best insulation materials, rigid polyols have

been gone up by more than 15 percent per year. Currently,

China has become the largest productio

try of polyurethane products. In addition, polyurethane

industry promotes the shoe, artificial leather, textile, automobile

China.

, home appliance and other industries in

More

System Polyols for Rigid Foam to Enter Into Rapid Development Phase PUdaily, Shanghai-In recent years, system polyols for rigid

foam has been in the rapid development period. In 2000, system

y

Chin

ld chain logistic industry, building industry and solar wate

pol ols for rigid foam enterprises with capacity of 10,000 tons in

a were about 5 while in 2010, enterprises with capacity above

20,000 tons reached 13 with violent development of the whole

industry.

For the moment, the large-scale application of PU rigid foam

has been already pushed into downstream refrigerator and freezer

industry, co r heater industry. More

Yantai Spandex Predicts 2011 Spandex Market Will Stay UnfavPUdaily, Shanghai-According to Yantai Spandex, in recent

orable

years, the spandex industry takes on obvious synchronous decline

r

sprin

velopment of downstream textile

he competition between spandex enterprises.

emicals Player

an aims to become the leading player in petrochemicals

t

dep and president of National

eve y three years. Last cycle appeared in 2008 and the next year

g, the spandex market began to rise again after bottoming out.

Meanwhile, the company says the recent spandex market

remains sluggish and the peak season is not prosperous as

scheduled.

According to current situation, the spandex market in 2011 will

when the market will recover is dependent on two aspects-the de

industry and t

not have good performance and

Yantai Wanhua's main business is to develop, produce and sell spandex fiber & aramid fiber serires

of products.

9th I PF: I ran A ims to Bec ome the L eading Mideast PetrochIr

in he Mideast by 2025, said Abdolhossein Bayat, Iran's

uty minister of petroleum

Shanghai Suntower Business Consulting Page 27

Page 28: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Petr

eters,

it ha

ochemical Co. (NPC; Tehran) in his opening address to the 9th International Petrochemical Forum

(IPF), currently taking place in Tehran and attended by more than 1,000 delegates. The country had

capacity for 51 million m.t./year of petrochemical products in the Iranian fiscal year ended March 20,

2011. Iran's petrochemical exports, valued at $11.5 billion, reached 18 million m.t. Domestic sales were

13 million m.t., Bayat says.

The country is gearing up to add more value to its huge oil and gas reserves--at 33 trillion cu m

s the second largest gas reserves behind Russia--and is currently working on a string of new

investment projects, inlcuding the 15th, 16th and 17th olefins complexes and several methanol and

ammonia and urea projects. The country's 5th five year plan, which runs through 2015, will require an

investment of $49 billion and double petrochemical capacity to 100 million m.t./year. This includes 30

new plants with capacity for 37 million m.t./year. Bayat said that five more special economic zones will be

created, adding to the Pars Special Economic Zone in Assaluyeh and the Mahshahr Petrochemical

Special Economic Zone at Bandar Imam. The new zones will be at Chahbahar, on the border with

Pakistan; Qeshm Island, near Bandar Abbas; Kish Island; and Lavan, both on the Persian Gulf in the

south of Iran, and North Pars, north of Assaluyeh. Chemical parks, which will house processing

industries are also being planned. More

4.3 Im&Export and Policy News in May Approximation of the E U Enterprises to A pply the

ince June 1, where the EU REACH legislation contains

a hi

orter from the China Commodity Net (ccn.mofcom.gov.cn) and

third

ementation of the “Chemicals Re

Auth

REACH Re gulations Limit the Ex port Pressure Surge It is reported that s

gh degree of attention as the 38 substances (SVHC) reaches a certain

concentration, total amount of products, applications must be notified in

accordance with the rules and procedures will not be able to enter the EU

market.

Rep

-party service companies in Sweden held the EU laws and regulations of

the EU REACH regulation seminar to understand the past stages of the

product export enterprises to apply REACH notification, registration, how can

in the shortest time done quite concerned.

European Union June 1, 2007 impl gistration, Evaluation,

orization and Restriction” (Registration, Evaluation, Authorization and Restriction of Chemicals,

referred to as REACH) regulations, require access to their markets for preventive management of all

chemicals must be registered and assessment procedures before access. More

Development of Offshore RMB Market in HK Will Promote the

t yuan-denominated stocks Wayland

only REIT on April 29 was listed in Hong Kong, marking the offshore

renminbi business in Hong Kong has taken a historic step.

Four Basic Principles According to Xinhua, the firs

Shanghai Suntower Business Consulting Page 28

Page 29: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

Hong Kong SAR Government Financial Services and the Treasury spokesman said in an interview

recently, the Hong Kong Special Administrative Region Government will follow the development of

offshore yuan market, promote the four basic principles: More

India Publishes Anti-Dumping Investigation on PVC From China PUdaily, Shanghai-On April 21, 2011, Indian Ministry of Commerce &

Viny

y country and it adopts the production

price

dian Authority confirms that the PVC products from

Chin

Saudi Petrochemical, Plastics Exports to Chin Touch a 15 Month High The value of Saudi Arabia's non-oil exports to

ake plastic products,

reac

o

Saudi Arabia's non-oil exports by value increased by

Industry released the anti-dumping investigation on imports of PVC (Poly

l Chloride Paste Resin) from China, Japan, South Korea, Malaysia,

Russia, Taiwan and Thailand.

Under this investigation, the Designated Authority of India still regards

China as a non-market econom

s in India to calculate the normal value of Chinese products. Finally,

China's export enterprises are affirmed as 31.70% dumping margin but the

related enterprises haven't answered the lawsuit.

In addition, taking into account of the imports volume, market share, im

volume & costs, profit margin and inventory, the In

ports price, capacity, sales

a have an extent of 20-25% of dumping on Indian domestic industry.

a

China, mainly chemicals used to m

hed the highest in 15 months, as per Bloomberg.

The Kingdom's non-oil exports to China reached 1.75

bln Saudi riyals (US$467 million) in March, up 34% from

a year earlier, according to data posted today on the

Department of Statistics and Information’s website.

The value of non-oil exports to China increased as

il prices, as well as the introduction of new products. prices for petrochemicals benefited from high

33% to Singapore and by 5.8% to India. More

The EU: Vietnam Shoes' Largest Export Market PUdaily, Shanghai-During the past four years, Vietnam

s by

29.7

tnam's leather shoes, which will

expand further Vietnam's shoe exports. It is predicted the

exported shoes with value of USD1.74 billion, increase

% on a year-on-year basis. Among which, 50% of the total

amounts were exported to the EU and accounting for the EU

market of 10%-15%.

Since from this April 1, the EU has cancelled the four-year

anti-dumping duty on Vie

Shanghai Suntower Business Consulting Page 29

Page 30: Chinese Polyurethane Monthly Report 201105

Chinese Polyurethane Monthly Report 201105

ann

Growth of 30.8% PUdaily, Shanghai-"Footwear orders from the EU

u

incre

last

in amounts and prices.

USD1

period of a year earlier. More

ual export income will reach USD6 billion, of which about USD 3 billion will come from the EU market.

Zhejiang Footwear Exports Achieve USD0.45 Billion With Year-on-Year

mo nted up greatly in the previous four months,

ased by 60% compared with the same period of

year" declared by principal of Aokang Group's

Foreign Trade Department.

Since from the cancel of the EU's anti-dumping

duty to Chinese leather shoes in April, Zhejiang's

footwear to export increases

The average unit price has been boosted up to 1.2/a pair, increasing by 17.89% from the same

4. Big Events in May in Detail

Notes: This report is only for reference and no responsibilities or liabilities will be accepted by PUdaiy for commercial decisions claimed to have been based on the content of the report. Any form of replication without permission from PUdaily(www.pudaily.com)is strictly forbidden. If you have any question, please contact us at:

Shanghai Suntower Business Consulting Page 30

Tel: 0086-21-61159288 E-mai l: [email protected] Fax : 0086-21-61159277