Chinese Polyurethane Monthly Report 201105

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Chinese Polyurethane Monthly Report

URL: www.pudaily.com

Version: 201105

1. Monthly News Headlines 

BASF Systems House Broke Ground in



Tianjin.

Foshan, China.



BASF Warns on Overexpansion in Asia.



BASF to Build World's Largest Single-Train



TDI Plant in Europe. 

Bayer MaterialScience to Invest $120M in



Bayer is to Expand Its MDI and HDI Capacity Broad

Application

Polyurethane

in

High–speed Railway. 



Chery Auto, Bayer Partner up on Lightweight



Cangzhou Dahua Optimizes TDI Energy



Dow Chemical Expects Lawsuit Decision in



DuPont Packaging & Industrial Polymers to 



Fujian

Putian

US-based Momentive to Sell Wood Resin Business.



Thermoplastic Materials. 

Sumitomo Chemical Sets Up Dalian Plant to Seize Auto Raw Material Market.

Elevance Renewable Sciences and Royal DSM to Collaborate for Bio-based Specialty

SABIC, Asahi Kasei and Mitsubishi Form Joint Venture.



Increase Capacity at Dordrecht, Netherland.

Shanghai Dongda Chemical's Polyurethane Project Begins Construction.



Case Versus Kuwait Petrochemical.

Polyurethane Adhesive Plant Nanjing Fuller Opens Up in China.



Utilization.

PPG Issues 2010 Corporate Sustainability Report.



Materials for Vehicles.

Polyurethane Adhesive Plant Nanjing Fuller Opens Up in China.



of

Perstorp Increases Polyol Capacity With Investment in China.



in Shanghai.

LANXESS Completes Acquisition of DSM Elastomers.



Texas Plant. 

INVISTA Opens Spandex Plant Expansion in

Yantai Wanhua Conducts the MDI Expansion Plan in Ningbo Base.

10,000

tons/year



Yantai

Wanhua

Water-Soluble Polyurethane Project Goes

Huntsman

Into Production..

Agreement.

Sign

Polyurethanes PO/MTBE

and License

Huafon Microfibre (Shanghai) Co., Ltd Costs ERU 9 Million to Purchase Production Lines. 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

Shanghai Suntower Business Consulting

Page 1

Chinese Polyurethane Monthly Report 201105 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

3400

28500 USD

3200

27000

RMB 3000

25500 M B / 24000 M T

S D / M 2800 T

2600

22500

2400

21000

2200

Source:PUdaily.com

19500

Date 2000 1-Jan10

18000 5-Feb- 12-Mar- 16-Apr- 21-May- 25-Jun- 30-Jul10 10 10 10 10 10

3-Sep10

8-Oct- 12-Nov- 17-Dec- 21-Jan- 25-Feb- 1-Apr10 10 10 11 11 11

6-May- 10-Jun11 11

Note: ①RMB refers to E-China, Drum/Delivery; ②USD refers to Spot Price Drum/CIF China

2.1.1Upstream Feedstocks--Toluene Feedstocks--Toluene

In May, domestic toluene market glide down slightly and at the beginning of this month, shocked by the continuously descending oil prices, pric es, 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.


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2

Chinese Polyurethane Monthly Report 201105 201105

2.1.2 Asian TDI Facility Latest Movement ★ CNGC Gansu Yinguang Chemical Industry

capacity has been expanded to 40ktpa from

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

30ktpa;

100% operation rates with sufficient inventory;

★BASF Shanghai plans to conduct maintenance

★ Cangzhou Dahua Chemical’s 30ktpa and

of its 160ktpa facility on May 23 for about one

50ktpa facilities operate with high loads and the

month;

maintenance plan of its 50ktpa device has been

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

postponed to July;

Yeosu, has been expanded to 150ktpa and it

★Yantai Juli Chemical’s 30ktpa facility operates

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

with basically full loads;

★ Japan Mitsui’s 120ktpa facility, located in

★Liaoning Northern Jinhua Polyurethane Co.,Ltd

Kashima, has been under shutdown from March

conducts maintenance in the third week and

11 and its annual maintenance schedule will start

restarts in the fourth week of this month;

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

★Taiyuan Bluestar’s 40ktpa device restarts in the

120ktpa facility in Omuta has been conducted

fourth week of this month and this facility shut

maintenance from May 13 and this maintenance

down for expansion in January, 2011. Now, the

will last to June 13.

2.1.3 Import & Export Data

Table 2: China TDI Export/Import Flow from

Table 3: China TDI Export Destinations in Aril

January to April Apr il 2011 (Tons) (Tons)

2011 (Tons)

HS Code: 29291010 Month Import

Export

201101

9950

370

201102

6500

474

201103

6599

682

201104

7360

348

Total

30409

1874

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


Page

3

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 4700

26000 USD RMB

4100 3500

22000 18000 R M B 14000 / M T

U S 2900 D / M T 2300

10000

1700

6000

1100 Date

Source:PUdaily.com

500

2000

8-Jan- 26-Feb- 16-Apr- 4-Jun- 23-Jul- 10-Sep- 29-Oct- 17-Dec- 4-Feb- 25-Mar- 13-May10 10 10 10 10 10 10 10 11 11 11

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.


Page 4


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

maintenance from May 11 and expects to restart

for one-month maintenance due to the glitches

on June 13.

since March 30 and expects to restart in early

★ KUMHO Mitsui Chemical’s MDI facility was

June.

shut down for the maintenance on May 20 and

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

this maintenance will last for 3-4 weeks.

for one-month maintenance on May 5. Besides,

★ Huntsman's 160ktpa MDI splitter has been

its 20ktpa MDI facility is running normally.

conducted half-month maintenance since May 23.

★Yantai Wanhua Polyurethane Company's three

Currently, it has normal inventories and the sales

production lines all run steadily and meanwhile,

prove to be smooth.

its 200ktpa MDI facility located in Yantai has

★BASF Shanghai's 160ktpa MDI facility was shut

resumed the production since May 30.

down for maintenance on May 23 and it will last to

★Mitsui Chemical's 60ktpa MDI facility located in

June 12.

Omuta

has

been

conducted

one-month 2.2.3 Im/Export Data

Table 5: China Crude MDI Export/Import Flow

Table 6: China Crude MDI Export Destinations in

from January to April 2011 (Tons)

Aril 2011 (Tons)

HS Code: 39093010 Month

201101

Import

Export

28136

17279

201102

21010

11562

201103

39313

27309

201104

29492

19408

Total

117950

75558

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


In June, most MDI manufacturers will resume production and at that moment, oversupply


Page

5


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)

3400

25000 USD RMB

3000 22000 2600 U S D / M T

2200

19000

R M B / M T

1800 16000 1400 Date

Source: PUdaily.com

1000 13000 8-Jan- 19-Feb- 2-Apr- 14-May- 25-Jun- 6-Aug- 17-Sep- 29-Oct- 10-Dec- 21-Jan- 4-Mar- 15-Apr- 27-May10 10 10 10 10 10 10 10 10 11 11 11 11

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


Page

6


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

maintenance from May 11 and expects to restart

for one-month maintenance due to the glitches

on June 13.

since March 30 and expects to restart in early

★ KUMHO Mitsui Chemical’s MDI facility was

June.

shut down for the maintenance on May 20 and

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

this maintenance will last for 3-4 weeks.

for one-month maintenance on May 5. Besides,

★ Huntsman's 160ktpa MDI splitter has been

its 20ktpa MDI facility is running normally.

conducted half-month maintenance since May 23.

★Yantai Wanhua Polyurethane Company's three

Currently, it has normal inventories and the sales

production lines all run steadily and meanwhile,

prove to be smooth.

its 200ktpa MDI facility located in Yantai has

★BASF Shanghai's 160ktpa MDI facility was shut

resumed the production since May 30.

down for maintenance on May 23 and it will last to

★Mitsui Chemical's 60ktpa MDI facility located in

June 12.

Omuta

has

been

conducted

one-month 2.3.3 Import & Export Data

Table 8: China Pure MDI Export/Import Flow from

Table 9: China Pure MDI Export Destinations in

January to April 2011 (Tons)

Aril 2011 (Tons)

HS Code: 29291030 Month

201101

Import

Export

13687

3591

201102

8487

3623

201103

15984

5740

201104

10350

5144

Total

48509

18098

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



Page

7


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 2600

24000 USD

2300

RMB

2000 S D / M1700 T

18000 M B / M 15000 T

1400

12000

1100 800

21000

Date

Source:PUdaily.com

500

9000 6000

08-Jan- 26-Feb- 16-Apr- 04-Jun- 23-Jul- 10-Sep- 29-Oct- 17-Dec- 04-Feb- 25-Mar- 13-May10 10 10 10 10 10 10 10 11 11 11 Note: ①RMB refers to E-China, Drum/Delivery; ②USD refers to Drum/CIF China


Page

8


2.4.1 Upstream Feedstocks-Propylene

Propylene 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

◆Tianjin Dagu’s polyether polyols facility will shut

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

down for maintenance from May 26 to June 8 and

during this maintenance period, propylene oxide

its propylene oxide device now operates with

commodities sold outside increased to 240-250

loads of 50% and the operation rates will

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

decrease to 30% at the end of this month;

polyols

commodities

◆Shandong Shida Shenghua Chemical will shut

outside of 180 tons. Meanwhile, its 40ktpa

down its propylene oxide facility from May 21-28

propylene

and now its daily output keeps 140 tons with

facility

reopened

oxide

with

facility

shut

down

for

maintenance on May 24 and restarted on May 27.

commodities outside of 40 tons;

The annual maintenance of all its devices will be

◆ Shandong Dongchen Chemical’s propylene

conducted from June 10-15.

oxide device reopened on May 18 and now it

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

operates 80% with daily output of 130 tons;

shut down on April 30 and restarted on May 2

◆Shandong Binhua Chemical broke off on May 4

with propylene oxide daily output of 120 tons and

due to the power outage for about 40 hours and

later, its propylene oxide output will be sold

the maintenance plan of its propylene oxide

outside completely. Its flexible polyols daily output

device has been delayed to June21/22 for abut

keeps 30-40 tons and its polyether polyols device

half a month;

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%;

◆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.


Page

9



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


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.


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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 May Average

April Average

Price

Price

RMB/ton

16775-17025

Import

USD/ton

Export Flexible Polyols (HR)

Products

Flexible Slabstock Polyols

POP (slabstock)

POP (HR) Elastomer Polyols Rigid Polyols

Types

Unit

Fluctuation

Remarks

China

16450-16575

325, 450

Bulk/Delivery

2500-2550

2488-2538

12, 12

Drum/CIF

USD/ton

2558-2608

2538-2588

20, 20

Drum/FOB

China

RMB/ton

17750-18200

17525-17925

225, 275

Drum/Delivery

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

Export

USD/ton

2658-2708

2650-2700

8, 8

Drum/FOB

China

RMB/ton

18475-18950

18300-18600

175, 350

Drum/Delivery

China

RMB/ton

17525-17775

17125-17475

400, 300

Drum/Delivery

Export

USD/ton

2600-2650

2550-2600

50, 50

Drum/FOB

China

RMB/ton

14400-15550

14400-15200

n/c, 350

Drum/Delivery

Note: China :① Flexible Slabstock Polyols brands: 5623、5613、560S、3031K、5616, etc; ② Flexible Polyols (HR) brands: 330N、820、703、3603, etc; ③ Rigid Polyols brands: Conventional rigid polyols 4110; ④POP (slabstock) brands: 2045、2042; ⑤ POP (HR) brands: 3628、3630, etc. ⑥ Elastomer Polyols brands: 220, 210, etc.

Imports: ① Flexible Slabstock Polyols brands include: 5613、2025A、5616, etc. ② POP(slabstock) refers to 42-45% solid content polymeric polyols.

Exports: ① Flexible Slabstock Polyols includes the MW 3000; ② POP (common-grade) refers to 42-45% solid content polymeric polyols;


Page 1 1


③ HR Polyols: MW 4800-5000, such as 330N; ④ Elastomer Polyols: MW 1000 and MW 2000, such as 210/220.

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

4700

26000 USD RMB

4100 3500 S D / M T

22000 18000

2900

M B / 14000 M T

2300

10000

1700

6000

1100

Source:PUdaily.com

Date 500

2000

8-Jan- 26-Feb- 16-Apr- 4-Jun- 23-Jul- 10-Sep- 29-Oct- 17-Dec- 4-Feb- 25-Mar- 13-May10 10 10 10 10 10 10 10 11 11 11 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 M ovement ◆Fangda Jinhua Chemical’s polyether polyols

daily output of 100 tons and it restarted on May

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

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


Page 1 2


all

of

their

devices

will

be

conducted

maintenance from June 10 to June 15; ◆ Shenyang

G-Billow

Chemical’s

◆Shandong Dongda’s polyether polyols facility

restarted on April 30 and their operation rates PO/PPG

decreased to 50% from 70-80%;

facility shut down on April 30 and restarted on

◆Tianjin Dagu’s polyether polyols facility now

May 2. Later, its polyether polyols facility closed

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

on May 23 with restart time unclear. Meanwhile,

for maintenance from May 26 to June 8;

its 40ktpa polyether polyols device is in the

◆ Zibo Dexin Lianbang’s polyether polyols

improvement in technology;

device shut down in middle May for a short time. 2.5.3 Import & Export

Table 13: China Polyols Export/Import Flow from

Table 14: China Pure MDI Export Destinations in

January to April 2011 (Tons)

Aril 2011 (Tons)

HS Code: 39072090

Destinations

Quantities

India

3715

Hong Kong

2473

Taiwan

2386

Malaysia

2171

Pakistan

1838

Indonesia

1504

Singapore

1248

Japan

1049

South Korea

1008

Turkey

824

Month

201101

Import

Export

36482

14373

201102

18855

12018

201103

38736

22214

201104

31347

25492

201101-04

125420

74096


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


Page 1 3


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

PTMEG (1800)

PTMEG (2000)

PTMEG (1000)

May Average

April Average

Price

Price

RMB/ton

30200-30600

Imports

USD/ton

China

Types

Unit

Fluctuation

Remarks

China

30200-30600

n/c, n/c

Drum/Ex-factory

3800-3850

3800-3850

n/c, n/c

Drum/CIF

RMB/ton

33500-35200

33500-35200

n/c, n/c

Drum/Ex-factory

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-factory

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

5000

41000 USD RMB

4500

38000

4000

35000

U S 3500 D / M T

32000 R M

3000

B / M 29000 T

2500

26000

2000

23000 Date

Source: PUdaily.com

1500

20000

8-Jan- 19-Feb- 2-Apr- 14-May- 25-Jun- 6-Aug- 17-Sep- 29-Oct- 10-Dec- 21-Jan- 4-Mar- 15-Apr- 27-May10 10 10 10 10 10 10 10 10 11 11 11 11

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

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 14


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

facility operates regularly at 60-70% with smooth

PTMEG facility runs normally with 70% operation

quotations.

rates and according to the insiders, the order

◆ Japan Mitsubishi’s PTMEG facility operates

volumes from downstream users tend to shrink.

steadily.

However, due to the cost pressure and slender

◆ Mitsubishi

profits, the company shows no inclinations of

resumed the production and now due to the

declining its quotations.

limited inventories it offers no quotations.

Ningbo’s

PTMEG

facility

has

◆ Hangzhou Qingyun Holding Group’s PTMEG


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

HS Code: 39072010 Import

Export

201101

9978

763

201102

5643

887

201103

11323

994

201104

9724

1063

201101-04

45097

4274


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 15


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.


Page 16


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.


Page 17




BASF Warns on Overexpansion in Asia

There

is

a

danger

that

overinvestment

in

petrochemical 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 amounts of capacity additions, coupled with more 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 head of BASF's petrochemicals business in A sia. The current favorable conditions for the chemic al industry globally are making companies undertake major expansion decisions without considering the possibility that those decisions will contribute to a down cycle, he said. More



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

Ludwigshafen, Germany– BASF will build the world's largest single-train TDI (toluene diisocyanate) plant 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



Bayer MaterialScience to Invest $120M in Texas Plant

Bayer MaterialScience LLC, which has its North

American

headquarters 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 makes Methylene diphenyl diisocynate (MDI) and Toluene diisocyanate (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



Bayer is to Expand Its MDI and HDI Capacity in Shanghai

On the groundbreaking ceremony of polyurethane system prod uction site in Qingdao on May 24, vice president Dr.AzitaOwlia of Bayer


Page 18


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


Page 19


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 in the North America, Europe and Asia Pacific. 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.


Page 20


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.


Page 21


"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


Page 22


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



SABIC, Asahi Kasei and Mitsubishi Form Joint Venture

Saudi Basic Industries Corp, Asahi Kasei Chemicals Corp. and 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 ) and sodium cyanide (NaCN), with subsequent sales and distribution to be carried by the partners. The agreed plan is to establish world -scale plants with capacities of 200,000 metric tons per year of AN and 40,000 metric tons per year of NaCN at one of the Sabic affiliates’ sites in Jubail Industrial City, Saudi Arabia. Mohamed Al-Mady, Sabic vice-chairman and CEO, said: “A key driver for the project is Saudi Arabia’s National Industrial Clusters Development Program aimed at growing and diversifying the Kingdom’s manufacturing sector. “AN and NaCN are very imp ortant chemicals for the downstream diversification into acrylonitrile butadiene 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.”



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

PUdaily, Shanghai-Japan Sumitomo Chemical announced on May 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 in North China. It is reported that the total investment amount of this new plant is about 1.2 bil lion yen (50% is financed by Japan Sumitomo Chemical Headquarters and the other half is contributed by the


Page 23


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.


Page 24


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 Polyurethane in High–speed Railway

PUdaily, Shanghai-According to "long-term railway network planning", 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 polyurethane increase greatly and this also open up another area in polyurethane industry. More



Domestic Maleic Anhydride Market Is Faced With Technique Adjustment

PUdaily, Shanghai-In April, domestic maleic anhydride market 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 rease is mainly caused by promotion of feedstock market, the stockpiling of sellers, the shutdown of partial providers and the increasing downstream large orders. 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. More



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

PUdaily, Shanghai-Recently, the market supplies of MDI 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 r 3 years, China's demand for MDI will ascend by 150,000-200,000 tons every year and meanwhile, the demand in Europe and America will


Page 25


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



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

Wang Lei, vice chairman of the China Household Electrical Appliances 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 ces, under 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 ts, an increase of 8%, an increase slowed down very significantly. However, three or four markets remain ed high growth. State Information Center released data show 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 increase 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.



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

PUdaily, Shanghai-Oil prices rush down recently while 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 and partial downstream polyether polyols plants turn to reduce productions while minority facilities have been s hut down. Besides, as previous shutdown of propylene oxide facility starts to resume gradually, tight supply in May is predicted to be relieved to some extent. More

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Polyurethane Industry in China and India Will Develop Rapidly in Next Five Years

PUdaily, Shanghai-Owing to the excellent physical and chemical properties, polyurethan e products have infiltrated into various fields in our lives. Along with the continuous development of science and


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technology, 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 n and consumption country of polyurethane products. In addition, polyurethane industry promotes the shoe, artificial leather, textile, automobile , home appliance and other industries in China. More

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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 polyols for rigid foam enterprises with capacity of 10,000 tons in China 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, cold chain logistic industry, building industry and solar wate r heater industry. More

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Yantai Spandex Predicts 2011 Spandex Market Will Stay Unfav orable

PUdaily, Shanghai-According to Yantai Spandex, in recent years, the spandex industry takes on obvious synchronous decline every three years. Last cycle appeared in 2008 and the next year spring, 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 not have good performance and when the market will recover is dependent on two aspects-the de velopment of downstream textile industry and the competition between spandex enterprises. Yantai Wanhua's main business is to develop, produce and sell spandex fiber & aramid fiber serires of products.

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

Iran aims to become the leading player in petrochemicals in the Mideast by 2025, said Abdolhossein Bayat, Iran's deputy minister of petroleum and president of National


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Petrochemical 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 eters, it has 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 REACH Re gulations Limit the Ex port Enterprises to A pply the Pressure Surge

It is reported that s ince June 1, where the EU REACH legislation contains a high 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. Reporter from the China Commodity Net (ccn.mofcom.gov.cn) and third-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 ementation of the “Chemicals Registration, Evaluation, Authorization 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

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Development of Offshore RMB Market in HK Will Promote the Four Basic Principles

According to Xinhua, the firs 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.


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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

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India Publishes Anti-Dumping Investigation on PVC From China

PUdaily, Shanghai-On April 21, 2011, Indian Ministry of Commerce & Industry released the anti-dumping investigation on imports of PVC (Poly Vinyl 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 y country and it adopts the production prices 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 ports price, capacity, sales volume & costs, profit margin and inventory, the In dian Authority confirms that the PVC products from China have an extent of 20-25% of dumping on Indian domestic industry.

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Saudi Petrochemical, Plastics Exports to Chin a Touch a 15 Month High

The value of Saudi Arabia's non-oil exports to China, mainly chemicals used to m ake plastic products, reached 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 prices for petrochemicals benefited from high oil prices, as well as the introduction of new products. Saudi Arabia's non-oil exports by value increased by 33% to Singapore and by 5.8% to India. More

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The EU: Vietnam Shoes' Largest Export Market

PUdaily, Shanghai-During the past four years, Vietnam exported shoes with value of USD1.74 billion, increase s by 29.7% 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 tnam's leather shoes, which will expand further Vietnam's shoe exports. It is predicted the


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Chinese Polyurethane Monthly Report 201105

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