platts pe 29 july 2015

This Weeks Highlights:

Asian Ethylene - NEA, SEA stable

Asian HDPE - Bearish on weak crude, shaky macroeconomics Asian LDPE - Falls $15-$55/mt on weak demand Asian LLDPE - Falls $50-$65/mt on limited Chinese demand

Platts International Prices 1

Polymerupdate Indian Domestic Producer Price 1

Polymerupdate CIF India Prices 2

Polymerupdate Indian Producer Posting Price Comparison 3

Polymerupdate Indian Open Market Price Table 4

Heard in PVC Market 4

Currency Rates 4

Platts International Market Commentary & Analysis 5

Polymerupdate - PE Market Supply Scenario 6

Platts Price Analysis Of PE Chain Processing Margins 7

Platts Polymer Shipping Costs (USD/MT) 8

Crisil Research Macroeconomics & Currency Monthly Analysis 8

Point of Contact 10

Polymerupdate - About us & Copyright 10

Platts - About us & Copyright 10

MUDASSA

R

Week 30 July 29, 2015

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(W),Mumbai400013,INDIA|Email:[email protected]|Tel:+912261772000(25lines)|Fax:+912261772025 1

PLATTS INTERNATIONAL PRICES (USD/MT)

Product July 22 (WK 29) July 29

(WK 30) Price Change

on Week

India Crude basket: (USD/b) 55.70 53.30 - 02.40 Naphtha: (MOP West India) 459.85 438.35 - 21.50 Ethylene :

CFR North East Asia 1169-1171 1174-1176 + 05 CFR South East Asia 1094-1096 1099-1101 + 05 Polyethylene :

HDPE Inj CFR South Asia 1319-1321 1259-1261 - 60 HDPE Inj CFR Far East Asia 1289-1291 1209-1211 - 80 HDPE Inj CFR South East Asia 1319-1321 1239-1241 - 80 HDPE Blow CFR South Asia 1334-1336 1269-1271 - 65 HDPE Blow CFR Far East Asia 1314-1316 1219-1221 - 95 HDPE Blow CFR South East Asia 1334-1336 1249-1251 - 85 HDPE Film CFR South Asia 1329-1331 1279-1281 - 50 HDPE Film CFR Far East Asia 1309-1311 1229-1231 - 80 HDPE Film CFR South East Asia 1319-1321 1259-1261 - 60 LLDPE GP CFR South Asia 1289-1291 1239-1241 - 50 LLDPE GP CFR Far East Asia 1254-1256 1189-1191 - 65 LLDPE GP CFR South East Asia 1274-1276 1219-1221 - 55 LDPE CFR Far East Asia 1329-1331 1274-1276 - 55 LDPE CFR South East Asia 1309-1311 1294-1296 - 15 China Domestic (YUAN/MT EX-WORK) :HDPE Film 10680-10720 10430-10470 - 250 LLDPE 9330-9370 9130-9170 - 200 LDPE 10730-10770 10380-10420 - 350

POLYMERUPDATE INDIAN DOMESTIC PRODUCER PRICE RIL (Ex-Hazira)

INDIA DOMESTIC PRODUCER PRICE - RIL (Ex Hazira)

Product July 22 (WK 29) July 29 (WK 30) Price Change on Week

INR/KG USD/MT INR/KG USD/MT INR/KG HDPE Grade

Raffia 99.94 1420 99.94 1420 0 Film 97.46 1384 97.46 1384 0 Injection 100.93 1435 100.93 1435 0 Blow Moulding 98.79 1404 98.79 1404 0 Pipe 99.53 1415 99.53 1415 0 LLDPE Grade

Film 95.76 1360 95.76 1360 0 Rotomoulding 94.75 1345 94.75 1345 0 Injection 98.26 1396 98.26 1396 0 Extrusion Coating 97.54 1386 97.54 1386 0 LDPE Grade

General 110.91 1580 110.91 1580 0 Heavyduty 115.27 1644 115.27 1644 0 Milk Pouch 116.09 1656 116.09 1656 0 Injection 117.56 1677 117.56 1677 0 Lamination 123.38 1762 123.38 1762 0 *Domestic Indian producer prices are quoted in INR/kg basic (Nett of all taxes); equivalent USD/MT price is calculated at current US/INR rate. *Lot Size: 1 Truck Load (10 to 16 MT) - Price assessments are based on information gathered from a cross section of the industry that includes resin producers, processors, traders and distributors. - Standard repeatable orders (based on confirmed market deals) form the basis of the prices.

PLATTS INTERNATIONAL PRICES Specifications: Cargoes of 100-500mt delivered 15-30 days forward from date of publication with up to 30 days credit, basis CFR Far East Asia: China main ports (Shanghai, Shenzhen, Ningbo, Shantou, Hong Kong); CFR South East Asia: Indonesia (Jakarta, Surabaya), Singapore, Philippines (Manila Bay), Malaysia (Port Kelang), Thailand (Bangkok, Laem Chabang, Map Ta Phut), Vietnam (Ho Chi Minh). Platts prices reflect spot market values on the day of publication. India Crude Import Basket Calculation: ( (Dubai + Oman) / 2 * 65.2% ) + (Dated Brent * 34.8%) MOP West India : Mean of Platts FOB West India naphtha export price

MUDASSA

R

Week 30 July 29, 2015


POLYMERUPDATE (CIF INDIA PRICES)

HDPE Grade

CIF INDIA BY ORIGIN (Nhava Sheva Port)

South Korea Singapore Thailand Saudi Arabia

WK 29 WK 30 Price Changeon Week

WK 29 WK 30 Price Changeon Week

WK 29 WK 30 Price Change on Week

WK 29 WK 30 Price Change on Week July 22 July 29 July 22 July 29 July 22 July 29 July 22 July 29

Raffia 1330 1300 - 30 -- -- -- -- 1320 1290 - 30 -- -- -- -- Film 1340 1310 - 30 1310 1280 - 30 1340 1310 - 30 1310 1280 - 30 Injection 1340 1310 - 30 1300 1270 - 30 1340 1310 - 30 1300 1270 - 30 Blow Moulding 1350 1320 - 30 1315 1285 - 30 -- -- -- -- -- -- -- -- Pipe 1390 1360 - 30 -- -- -- -- -- -- -- -- -- -- -- -- HMHD 1400 1370 - 30 1360 1330 - 30 1370 1340 - 30 -- -- -- --

LDPE Grade South Korea Singapore Thailand Qatar

General 1390 1340 - 50 1380 1330 - 50 1370 1320 - 50 1330 1280 - 50 Heavyduty 1410 1360 - 50 1410 1360 - 50 1400 1350 - 50 1350 1300 - 50 Milk Pouch 1420 1370 - 50 1420 1370 - 50 1410 1360 - 50 1360 1310 - 50 Injection 1430 1380 - 50 1430 1380 - 50 1420 1370 - 50 -- -- -- -- Lamination -- -- -- -- -- -- -- -- -- -- -- -- 1560 1480 - 80

LLDPE Grade South Korea Singapore Thailand Saudi Arabia

Film 1330 1300 - 30 1310 1280 - 30 1340 1310 - 30 1300 1270 - 30 Rotomoulding 1340 1310 - 30 -- -- -- -- -- -- -- -- 1330 1300 - 30 Injection 1360 1330 - 30 1340 1310 - 30 1360 1330 - 30 1350 1320 - 30 Metallocene -- -- -- -- 1620 1620 0 -- -- -- -- -- -- -- -- - All prices are in USD/MT CIF India (Nhava Sheva) - For South Korea, Singapore, Thailand and Saudi Arabia : Cargo size of 50-100mt delivered within 30 days. - Price assessments are based on information gathered from a cross section of the industry that includes resin producers, processors, traders and distributors. - Standard repeatable orders (based on confirmed market deals) form the basis of the prices.

MUDASSA

R

Week 30 July 29, 2015


POLYMERUPDATE - INDIAN PORDUCER POSTING PRICE COMPARISON (GRADE WISE)

HDPE w.e.f 16-July-2015

Grade Producer (Ex Works) Grade No. INR/MT USD/MT

BLOW MOULDING

RIL (BC/NC) 54GB012 99040 1407 RIL (Hazira) B56003 98790 1404 HALDIA (HC) B6401 100000 1421 GAIL (M/B/T) B52A003A 94010 1334 GAIL (M/B/T) B63A003A 94010 1334

INJECTION MOULDING ( MFI - 18 )

RIL (Hazira) 50MA180 97640 1387 HALDIA (HC) M5018L 99900 1420 GAIL (M/B/T) I50A180A 93700 1330

INJECTION MOULDING ( MFI - 7 ) UV

RIL (Hazira) L60075 100930 1435 HALDIA (HC) M6007LU 101550 1444 GAIL (M/B/T) I60U080A 96470 1370

HDPE FILM RIL (Hazira) F56003 97460 1384

HDPE PIPE RIL (BC/NC) 46GP009 99530 1415 HALDIA (HC) P-5300 108700 1548 GAIL (M/B/T) P54A001A 104530 1458

HMHDPE FILM RIL (Hazira) 52GF004 98450 1399

HALDIA (Works) F5400 100950 1435 GAIL (M/B/T) F55HM003A 95570 1357

RAFFIA

RIL (Hazira) 53EA010 99060 1408 RIL (Hazira) E52009 99940 1420 HALDIA (HC) R5801 105350 1599 GAIL (M/B/T) W50A009A 95060 1349

LDPE Ex-Mumbai (Panvel Depot) w.e.f 16-July-2015 * Prices are in INR/MT (inclusive of excise duty)

Grade Producer Grade No. *INR/MT USD/MT LDPE EC RIL 1070LA17 123378.75 1762

LDPE IM RIL 16MA400 117562.50 1677

LDPE GP RIL 24FS040 110913.75 1580

LDPE MP RIL 1005FY20 116088.75 1656

LDPE HEAVY DUTY RIL 22FA002 115267.50 1644 RIL 1020FA20 109901.25 1566

LLDPE w.e.f 16-July-2015

Grade Producer (Ex Works) Grade No. INR/MT USD/MT

LLDPE EXTRUSION COATING

RIL (Hazira) E24065 97540 1386 HALDIA (HC) 72307E 99950 1421 GAIL (M/B/T) E36A060 94370 1339

LLDPE INJECTION MOULDING

RIL (Hazira) M26500 98260 1396

HALDIA (HC) 71501-S -- --

LLDPE FILM

RIL (BC/NC) 20FS010 94960 1348 RIL (BC/NC) 20FS020 95970 1363 RIL (Hazira) F18010 95750 1359 RIL (Hazira) F19010 95760 1360 HALDIA (HC) 71601S 97900 1391 GAIL (M/B/T) F20S009A 92830 1317

LLDPE ROTOMOULDING

RIL (BC/NC) 36RA045 97880 1390 RIL (Hazira) R35042 94750 1345 HALDIA (HC) 73005T 101250 1440 HALDIA (HC) 73204T 101250 1440 GAIL (M/B/T) R35A042A 93920 1333

*Domestic Indian producer prices are quoted in INR/MT basic (Nett of all taxes) ; equivalent USD/MT price is at current US/INR rate. *Lot Size: 1 Truck Load (10 to 16 MT) - Ex Works: BC/NC = Ex Works Baroda Complex / Nagothane Complex | Ex Works: HC = Halidia Complex | Ex Works: M/B/T = Mumbai / Bhiwandi / Thane - Product Key: EC = Extrusion Coating, IM = Injection Moulding, GP = General Purpose, MP = Milk Pouch, MFI = Melt Flow Index, UV = Ultra Violet, HM = Heavy Molecule - USD Price calculation: INR/MT Aprox. Clearing and Forwarding charges / Basic Duty / Exchange Rate = USD/MT (For example: 82330 2500 / 1.075 / 54.24 = 1396)

MUDASSA

R

Week 30 July 29, 2015


POLYMERUPDATE - Indian Open Market Price Table Note: All prices are in INR/kg levels.

Product Mumbai Delhi Kolkatta Bangalore Indore Chennai Ahmedabad Rajasthan Kanpur Hyderabad Punjab Kerala

HMHDPE 109 - 110 112 - 113 114 -115 107.5 - 109 115.5 - 116.5 111 - 113 116 - 117 115 - 116 114 - 115 109.5 - 111 115 - 116 118 - 118.5

HDPE Raffia 111 - 112 111 - 112 - 109.5 - 110 - 113 - 114 121 - 122 - - 112 - 114 114 - 115 -

HDPE Injection 110.5 - 111 112 - 113 113 - 114 107.5 - 109 115 - 116 111.5 - 112 114 - 115 113 - 114 112 - 113 109 - 110.5 114 - 115 -

HDPE Blow Moulding

112.5 - 113 111 - 112 114 - 115 114 - 115.5 114.5 - 115.5 113.5 - 114 114 - 115 113 - 114 114 - 115 116 - 117 115 - 116 115.5 - 116

LLDPE Film 111 - 112 113 - 114 113 - 114 105.5 - 107.5 114 - 115 110 - 111 117 - 118 113 - 114 113 - 114 108 - 109 117 - 118 116.5 - 117

LDPE FILM 113 - 114 117 - 118 119 - 119.5 111 - 114 118 - 119 115.5 - 116.5 117 -118 118 - 119 119 -119.5 114 - 115 119 - 120 120 - 120.5

Currency rates equivalent to 1 US Dollar :

Countries Currency Rates Countries Currency Rates

Indian Rupees (INR) 63.81 Japan Yen (JPY) 123.59

Pakistan Rupees (PKR) 101.82 Indonesia Rupiahs (IDR) 13,447.00

China Yuan Renminb (CNY) 6.21 Malaysia Ringgits (MYR) 3.80

Bangladesh Taka (BDT) 77.70 Singapore Dollars (SGD) 1.36

Sri Lanka Rupees (LKR) 133.50 South Korea Won (KRW) 1160.68

Thailand Baht (THB) 34.83 Saudi Arabia Riyals (SAR) 3.74

Taiwan New Dollars (TWD) 31.42 United Arab Emirates Dirhams (AED) 3.67

MUDASSA

R

Week 30 July 29, 2015


Heard in PE MARKET

Platts : HDPE FILM: China-South Asia spread pegged at $50/mt. August discussions pegged at $1,225/mt CFR South Asia (India), 100-500mt, LC 90days, middle east origin

HDPE FILM: China-Southeast Asia spread pegged at $30/mt, August cargoes pegged at $1,260/mt CFR Southeast Asia (Vietnam), 100-500mt, LC 90days, Middle east origin

HDPE film: August cargoes pegged at $1,230/mt CFR China, 100-500mt, LC90 days, Middle east origin

HDPE Blow moulding BM: China-South Asia spread pegged at $50/mt. August discussions heard at $1,270/mt CFR South Asia, 100-500mt, LC90days

HDPE Blow moulding BM: China-Southeast Asia spread pegged at $30/mt, August buy sell notions at $1,250/mt CFR Southeast Asia (Vietnam), 100-500mt, LC 90days

HDPE blow moulding: August cargos pegged at $1,220/mt CFR China, 100-500mt, LC 90 days, Middle east origin

HDPE Blow moulding: August buying ideas heard below domestic cargo import parity prices of $1,313/mt CFR China, 100-500mt, LC 90 days, Middle east origin

HDPE INJECTION: China-South Asia spread pegged at $50/mt, Any August discussions heard at $1,260/mt CFR South Asia, 100-500mt, LC 90days

HDPE INJECTION: China-Southeast Asia spread pegged at $30/mt, August buy sell notions at $1,240/mt CFR Southeast Asia (Vietnam), 100-500mt, LC 0-30days

HDPE INJECTION: August buying ideas heard below domestic cargo import parity prices of $1,300/mt CFR China, 100-500mt, LC 90 days, Middle east origin

HDPE YARN: China- Southeast Asia spread pegged at $30/mt, August buy-sell discussions pegged at $1,270/mt CFR Southeast Asia (Vietnam), 100-500mt, LC 0-30days

HDPE YARN: August buying ideas heard below domestic cargo import parity prices of $1,379 /mt CFR China, 100-500mt, LC 90 days, Middle east origin

HDPE YARN: August buy-sell discussions pegged at $1,240/mt CFR China, 100-500mt, LC 0-30days

HDPE film: August cargo offer heard at $1,240/mt CFR China, 100-500mt, Brazilian origin through traders, LC 90days

HDPE FILM: Any August offer heard at $1,330-1,340/mt CFR South Asia (India), 100-500mt, Middle east origin, LC 90 days

HDPE film: August cargo heard offered at $1,295-1,300/mt CFR China, 100-500mt, LC at sight, Chevron Philips origin through traders

LDPE film: August cargo pegged at $1,275/mt CFR China, 100-500mt, LC 90 days, Middle east origin

LDPE film: August cargo pegged at $1,295/mt CFR Southeast Asia (Vietnam), 100-500mt, LC30-60 days

LDPE film: August cargo offer heard at $1,250/mt CFR China, 100-500mt, TT, Qatari origin through traders

LLDPE film: August cargoes pegged at $1,190/mt CFR China, 100-500mt, LC 90 days, Middle east origin

LLDPE FILM: China-South Asia spread pegged at $50/mt. August cargoes pegged at $1,240/mt CFR South Asia, 100-500mt

LLDPE FILM: China-South Asia spread pegged at $50/mt. August cargoes pegged at $1,225/mt CFR South Asia, 100-500mt

LLDPE FILM: China-Southeast Asia freight pegged at $30/mt, August buy sell discussions heard at $1,205/mt CFR Southeast Asia (Vietnam), 100-500mt, LC 0-30days, middle east origin

LLDPE film: August cargoes pegged at $1,175/mt CFR China, 100-500mt, LC 90 days, Middle east origin

LLDPE film: End August offer at $1,180-1,200/mt CFR China, 100-500mt, LC 90days , Middle east origin

MUDASSA

R

Week 30 July 29, 2015


Heard in PE MARKET Polymerupdate :

29-7-2015: UAE producer offers HDPE Film at $1270-1280/mt in India (CIF Nhava Sheva port)

29-7-2015: Middle East producer offers HDPE Film at $1300-1310/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers HDPE Film at $1350/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers HDPE Injection at $1370/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers HDPE Blow Moulding at $1360-1370/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers HDPE Injection at $1360/mt in Pakistan

29-7-2015: Saudi Arabia producer offers HDPE Blowmoulding at $1390/mt in Pakistan

29-7-2015: Saudi Arabia producer offers HDPE Film at $1300/mt in Pakistan

29-7-2015: Qatar producer offers HDPE Film at $1320/mt in Pakistan

29-7-2015: Saudi Arabia producer offers HDPE Film at $1340/mt in Pakistan

29-7-2015: Saudi Arabia producer offers LDPE Film at $1310/mt in India (CIF Nhava Sheva port)

29-7-2015: South Korea producer offers LDPE Lamination at $1440/mt in India (CIF Nhava Sheva port)

29-7-2015: UAE producer offers LDPE Film at $1270/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers LDPE Heavyduty at $1340/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers LDPE Film at $1320/mt in Pakistan

29-7-2015: Qatar producer offers LDPE Film at $1320/mt in Pakistan

29-7-2015: Saudi Arabia producer offers LLDPE Film at $1310/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers LLDPE roto moulding at $1370/mt in India (CIF Nhava Sheva port)

29-7-2015: Saudi Arabia producer offers LLDPE injection moulding at $1370/mt in India (CIF Nhava Sheva port)

29-7-2015: Middle East producer offers LLDPE Film at $1310-1320/mt in India (CIF Nhava Sheva port)

29-7-2015: Qatar producer offers LLDPE Film at $1320/mt in Pakistan

29-7-2015: Saudi Arabia producer offers LLDPE Film at $1310/mt in Pakistan

29-7-2015: Saudi Arabia producer offers LLDPE Injection at $1445/mt in Pakistan

29-7-2015: Saudi Arabia producer offers LLDPE Rotomoulding at $1410/mt in Pakistan

MUDASSA

R

Week 30 July 29, 2015


PLATTS INTERNATIONAL MARKET COMMENTARY & ANALYSIS

Asian Ethylene: NEA, SEA unchanged

- Flat amid sluggish trading

- Downstream remains bearish

The Asian ethylene market was steady Wednesday as trading remained sluggish amid volatile

upstream and downstream markets. September ICE Brent futures inched down $0.07/barrel

day on day to be assessed at $52.69/b at 4:30 pm Singapore time (0830 GMT) Wednesday.

China's stock market rebounded Wednesday after plunging for two consecutive days but

sentiment in ethylene derivatives markets remained bearish. High density polyethylene fell

$65/mt day on day to be assessed at $1,230/mt Wednesday. Following the plunge, the spread

between PE and ethylene narrowed to $55/mt, lower than the typical breakeven spread of

$150/mt. Most market participants remained on the sidelines.

RATIONALE:

The CFR Northeast Asia ethylene was assessed unchanged day on day at $1,175/mt

Wednesday. Trading was sluggish, with no bids or offers heard. Meanwhile, CFR Southeast

Asia ethylene was also assessed flat at $1,100/mt, in line with a quiet NEA market.

Asian HDPE: Bearish on weak crude, shaky macroeconomics

- Buyers stay out seeing drop in crude

- Supplies still tight from Middle East

Asian high density polyethylene film grade prices fell $50-$95/mt this week on bearish sentiment. Most buyers

stayed away from the market, as they felt prices would continue to fall seeing the shaky economic situation.

Supplies were, however, still tight, especially from the Middle East. In feedstock news, CFR Northeast Asia

ethylene price was assessed flat day on day at $1,175/mt and the CFR Southeast Asia ethylene price was also flat

at $1,100/mt Wednesday. Prices and margins for polyethylene are expected to remain weak, guided mostly by

fresh supplies from new polyethylene plants coming on-stream during the period, lackluster demand from

downstream plastic converters, as well as crude oil movements, observers said. However producers expected

supply tightness towards the end of the year when demand for plastics increase for the Christmas/New year peak

manufacturing season. In plant news, Indonesia's Chandra Asri will shut two polyethylene units with combined

nameplate capacity of 336,000 mt/year in Cilegon from September for two to three months, a source close to the

company said Wednesday. The units will shut while a 600,000 mt/year cracker at the site undergoes

debottlenecking, the source said.

RATIONALE:

HDPE film was assessed at $1,230/mt CFR Far East Asia Wednesday, down $65/mt week on week. Buying

indications for August-arrival cargoes was heard below $1,200/mt CFR China, with buyers basing bids on import

parity price of domestic cargoes. An offer was heard at $1,240/mt CFR China from a Chinese trader, while other

producers offered at $1,295-$1,300/mt CFR China. The CFR South Asia HDPE film was assessed at $1,280/mt

CFR, down $50/mt week on week, based on typical price differentials of around $50/mt, market observers said.

MUDASSA

R

Week 30 July 29, 2015


PLATTS INTERNATIONAL MARKET COMMENTARY & ANALYSIS

Asian LLDPE: Falls $50-$65/mt on limited Chinese demand

- Ample domestic supply in China

- Borouge starts up new plant in UAE

Asian linear low density polyethylene fell $65/mt on week to $1,190/mt CFR Far East Asia Wednesday, as Chinese import

demand was limited by ample availability of cheaper supplies in the domestic market. Prices of domestic cargoes in China

were equivalent to $1,200/mt on an import parity basis. In addition, crude futures have fallen, with ICE September Brent

crude futures down $3.75/barrel on week to be assessed at $52.69/b at 4:30 pm Singapore time (0830 GMT)

Wednesday. Most buyers expect LLDPE producers to reduce offers further to stimulate demand, but many sellers also

held back on offers. Many coal-to-polyolefin plants were heard to be running well, increasing supplies. Some Chinese

traders were considering exports, given extremely weak demand in China. In plant news, UAE's new Borouge 3 in Abu

Dhabi was started progressively in May and collectively the three Borouge petrochemical complexes will reach full

operations by Q4 2015, Borouge CEO Wim Roels said Tuesday. The material is targeted mainly at Asia and the Middle

East, with some small volumes for Europe, another company source said. The complex has a total high density/linear low

density polyethylene unit with a capacity of 1.08 million mt/year and a 350,000 mt/year low density polyethylene unit.

Borouge's two existing crackers -- Borouge 1 and Borouge 2 -- can produce 2.1 million mt of ethylene, 1.14 million mt of

PE and 800,000 mt of PP annually. The company had earlier announced new warehouses in Tianjin, China and Jurong

Island, Singapore and the opening of the Borouge 3 container terminal to cope with the increased volumes. Elsewhere,

Japanese producer Prime Polymer plans to start its new 300,000 mt/year metallocene LLDPE plant on Jurong Island,

Singapore, by end-2015, a source close to the company said. And India's GAIL Limited plans to bring onstream a new

400,000 mt/year polyethylene plant at its Pata complex in Uttar Pradesh state by September, two months later than

scheduled because of unexpected technical difficulties, a company source said Wednesday. It currently operates a

310,000 mt/year HDPE/LLDPE swing plant at the site. GAIL is also the marketer of polymers produced by Brahmaputra

Cracker and Polymer Limited's new complex in Assam, which has also had its startup delayed to September.

RATIONALE:

LLDPE was assessed down $65/mt week on week at $1,190/mt CFR Far East Asia Wednesday. While some sell indications

were heard at low as $1,180/mt CFR Far East Asia (China), traders said $1,190/mt CFR China was more a representative

trading level. The CFR South Asia price was assessed at $1,240/mt, down $50/mt week on week. A few major Chinese

traders surveyed said they would consider selling to India at this price, given that demand was extremely weak in China.

A price differential of $50/mt might cover their freight costs and some profit margins, they added.

Asian LDPE: Falls $15-$55/mt on weak demand

- Buyers remain on sidelines amid fall in crude

- Economic concerns in China weaken sentiment

Low density polyethylene prices fell this week amid weak demand as buyers remained

on the sidelines waiting for clearer market direction to emerge. A number of smaller

distributors in China had positions in both equity and commodity markets and were

losing money amid the fall in China's equity markets, traders in China said. Crude

futures were on a downtrend, with September ICE Brent futures down $3.75/barrel

week on week at $52.69/b at 4:30 pm Singapore time (0830 GMT) Wednesday. In

plant news, Iran's Amir Kabir Petrochemical Co. plans to shut its polyethylene complex

for 20 day's maintenance in April 2016, a company source said. The complex has a

140,000 mt/year HDPE plant, 240,000 mt/year LLDPE plant and 300,000 mt/year LDPE

plant.

RATIONALE:

LDPE was assessed down $55/mt week on week at $1,275/mt CFR Far East Asia

Wednesday. The CFR Southeast Asia marker was assessed down $15/mt over the same

period at $1,295/mt. Lower offers heard at $1,250/mt CFR Far East Asia could not be

confirmed and were excluded from the assessment. Traders did not give firm bid and

offer indications, but said the high $1,200s/mt for both CFR Far East and Southeast

Asia were workable trade levels.

MUDASSA

R

Week 30 July 29, 2015


POLYMERUPDATE - PE MARKET SUPPLY SCENARIO Amir Kabir to shut LLDPE plant for maintenance next year Amir Kabir Petrochemical Company (AKPC) is in plans to shut its linear low density LLDPE) plant for maintenance turnaround. The plant is likely to be taken off-stream in early April 2016. It is planned to remain off-stream for around 20-21 days. Located at Bandar Imam, Iran, the LLDPE plant has a production capacity of 240,000 mt/year. Amir Kabir to shut HDPE plant for maintenance next year Amir Kabir Petrochemical Company (AKPC) is in plans to shut its High density HDPE) plant for maintenance turnaround. The plant is likely to be taken off-stream in Q1 2016. It is planned to remain off-stream for around 20-21 days. Located at Bandar Imam, Iran, the plant has a production capacity of 140,000 mt/year. HDPE plant likely to be taken off-stream by PetroRabigh PetroRabigh is in plans to shut its high density HDPE) plant for maintenance turnaround. The plant is likely to be shut in early October 2015. It is planned to remain off-stream for around one month. Located in Rabigh, Saudi Arabia, the plant has a production capacity of

300,000 mt/year. LLDPE plant planned to be taken off-stream by Hanwha Hanwha Chemical is in plans to shut its linear low density LLDPE) plant for maintenance turnaround. The plant is planned to be shut in November 2015. It is likely to remain off-stream for around 10 days. Located at Yeosu in South Korea, the plant has a production capacity of 385,000 mt/year. No. 4 cracker planned to be shut by CPC CPC is likely to shut its No. 4 cracker for maintenance turnaround. The cracker is planned to be shut in Q4, 2015. The period of the shutdown could not be ascertained. Located in Linyuan, Taiwan, the cracker has an ethylene capacity of 380,000 mt/year and propylene capacity of 193,000 mt/year.

MUDASSA

R

Week 30 July 29, 2015


PLATTS Price Analysis of PE Chain Processing Margins

Naphtha to Ethylene Polyethylene to Naphtha

Typical North East Asian $/mt margin for producing ethylene from naphtha using a conversion cost of $350/mt.

CFR FE Asia LLDPE price as a ratio to naphtha

Ethylene to Polyethylene

Intra-Asian LDPE Premiums

Typical $/mt margin for producing LLDPE in Far East Asia from ethylene using a conversion cost of $150/mt

Premium or discount of weekly LDPE Southeast Asian price over weekly Far East Asian LDPE

MUDASSA

R

Week 30 July 29, 2015


PLATTS Polymer shipping costs (USD/MT)

From: Middle East Middle East

To: 25 100 MT > 100 MT East China 20 25 10 15 South China 15 25 10 15 India 45 50 30 40 Southeast Asia 30 35 25 30 NW Europe 55 65 50 60 Turkey 50 70 40 60 US Gulf 130 140 120 130 Latin America 165 175 160 165

NOTES:Polymers refer to Polyethylene, Polypropylene, Polystyrene, ABS, and PVC. 1) Middle East loadings refer to products coming from Jebel Ali (Dubai), Khalifa (Abu Dhabi), Jubail (Saudi Arabia), Shuaiba (Kuwait), Rabigh (Saudi Arabia), Mesaieed (Qatar), Assaluyeh and Bandar Imam Khomeini (Iran) ports. The assessments are normalized between these ports. 2) East China deliveries refer to products coming into Zhangjiagang, Shanghai, Jiangyin, Nantong, Ningbo, Nanjing, Zhenjiang ports. 3) South China deliveries refer to products coming into Shenzhen, Shantou, Hong Kong, Xiamen, Zhuhai ports. 4) India deliveries refer to products coming into Kolkata, Mumbai and Chennai ports. 5) South East Asia deliveries refer to products coming into Indonesia (Jakarta, Surabaya), Singapore, Philippines (Manila Bay), Malaysia (Port Kelang), Thailand (Bangkok), Vietnam (Ho Chi Minh) ports. 6) Northwest Europe deliveries refer to products coming into Antwerp port. Deliveries into Rotterdam and Amsterdam ports will be normalized to Antwerp. 7) Turkey deliveries refer to products coming into Istanbul and Mersin ports. 8) US Gulf deliveries refer to products coming into Houston port. No deliveries from the Persian Gulf. 9) Latin America deliveries refer to products coming into mainports in Brazil, Chile, Uruguay.

CRISIL Research Macroeconomics & Currency Monthly Analysis

Overview: On exports, worry beads forming After falling by 1.5% in 2014-15, merchandise exports from India plunged 16.8% in the first 3 months ofthis fiscal. What went wrong? The export destinations are not doing well, prices of many export items have fallen and the rupee, too,has appreciated in real terms against the basket of 36 countries. Weakgrowth in the US economy in the first quarterwould have contributed to the sharp slide in India'sexports as well.But our preliminary analysis shows the decline in exports is higher than warranted by these factors. That isto say, the decline isnt merely cyclical; there could be structural elements at play as well. The cyclicalcomponent of the exports will move up when cyclical factors (world GDP growth, prices) turn favourable,but structural factors, if not addressed, will continue to act as a drag on India's export performance.The slowdown in trade is not unique to India. An IMF study (2014) notes that a part of the global tradeslowdown since the crisis has been driven by structural, not cyclical factors. Theslowdown in trade could reflect deeper, structural factors, such as a rise in protectionism or a change inglobal production schemes throughout the world.In the case of India, there are additional worries. Falling competitiveness is another structural factorrestricting export growth. For key export items such as gems & jewellery and textiles, RevealedComparative Advantage has come down over the years. Recently,the Indian commerce secretary also expressed concerns on falling competitiveness of Indian exports due toinfrastructure and easing of doing business issues.Another concern is the threat emanating from treaties such as Trans Pacific Partnership(TPP), which is being forged between 12 countries, including the US. By not being a part of TPP, India riskslosing out a significant chunk of its export market; TPP countries account for 25% of Indias exports.Indeed, India needs to address export-related issues on a war footing.

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Week 30 July 29, 2015


IIP indicates industry growth gaining traction Industrial production growth inched down to 2.7% in May from 3.4% in April. However, despite the volatility, IIP numbers have averaged at a higher level in 2015 - at 3.5% since January 2015 as compared to 1.4% in the 5 months prior to that. Therefore, IIP data suggests an improvement in industrial activity this year in comparison to 2014, so far. In May, IIP growth slowed as the manufacturing sector lost momentum on the back of weak performance of consumer-oriented sectors. Unseasonal rains earlier in the year, resulting in lower rural demand, are weighing on consumer goods. This is reflected in lower two-wheeler and tractor sales in April and May. Therefore, favourable distribution of rainfall so far and deficiency at -4% of long term average - much lower than last year - is a welcome respite.

Inflation crawls up in June Inflation inched up to 5.4% from 5% in May due to a 70 bps increase in food inflation. Higher protein inflation -9.7% in June compared with 8.2% in May - was behind the food inflation rise. Inflation in pulses crossed 22% in June as production suffered largely a result of a weak monsoon last year and damage to crops from unseasonal rains this year. So far, the monsoon scenario remains favourable, with rainfall at 4% below the long term average as on July 8, 2015. But, healthy and well-distributed rainfall in July and August will be crucial. We go by Indian Meteorological Departments forecast of 12% deficient rainfall, but assume distribution remains normal, and the government undertakes proactive steps to contain food inflation. We, therefore, expect CPI inflation at 5.8% in 2015-16, down from 6% in 2014-15. Core inflation rose 20 bps to 5.3% in June, a slower climb compared to 40 bps in May. The pick-up came from a sharp jump in personal care and effects (up 120 bps) and in household

services, health, transport and communication and, recreation and amusement (all up 30 bps).

Rupee stays put in June The rupee averaged 63.9/$, hardly changed from 63.8/$ in May. However, it fell to 71.6 against the euro from71.2 in May. In the first half of June, the rupee hovered between 64.2/$ and 63.8/$, and rose to 63.5/$ in the second half as weak employment data dragged the US dollar down. However, as uncertainty on Greece loomed large in the last week of June, the rupee lost some ground, closing at 63.8/$. There was also no support from FIIs, with net outflows continuing for the second consecutive monthly.

About CRISIL Research CRISIL Research is India's largest independent and integrated research house. We provide insights, opinions, and analysis on the Indian economy, industries, capital markets and companies. We are India's most credible provider of economy and industry research. Our industry research covers 70 sectors and is known for its rich insights and perspectives. Our analysis is supported by inputs from our network of more than 4,500 primary sources, including industry experts, industry associations, and trade channels. We play a key role in India's fixed income markets. We are India's largest provider of valuations of fixed income securities, serving the mutual fund, insurance, and banking industries. We are the sole provider of debt and hybrid indices to India's mutual fund and life insurance industries. We pioneered independent equity research in India, and are today India's largest independent equity research house. Our defining trait is the ability to convert information and data into expert judgements and forecasts with complete objectivity. We leverage our deep understanding of the macroeconomy and our extensive sector coverage to provide unique insights on micro-macro and cross-sectoral linkages. We deliver our research through an innovative web-based research platform. Our talent pool comprises economists, sector experts, company analysts, and information management specialists.

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Week 30 July 29, 2015


POLYMERUPDATE PLATTS

Editorial Contact: Director, Editorial: Jwalant Oza Senior Editors: Harsh Nadkarni, Feroz Khan

Sales Contact: Marketing Managers: Reshma Jadhav, Tausif Siddiqi, Nilesh Shah

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About Polymerupdate: Polymerupdate is a destination for global players seeking plastics and petrochemical intelligence. We are a world renowned provider of real time news and price alerts spanning a whole spectrum of products including Crude oil, Naphtha, Aromatics, Olefins, Polyolefins and Petrochemical Intermediates.

Credible, neutral and regular reporting has attracted over a thousand subscribers who include most of the regions leading resin producers, processors, distributors, traders, consultant firms, investment bankers, credit rating agencies, as well as front runners in the international information services, news and media companies.

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Platts content copyright 2014: Copyright 2014 The McGraw-Hill Companies. All rights reserved. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed without prior written authorization from Platts. Platts is a trademark of The McGraw-Hill Companies Inc. Information has been obtained from sources believed reliable. However, because of the possibility of human or mechanical error by sources, McGraw-Hill or others, McGraw-Hill does not guarantee the accuracy, adequacy or completeness of any such information and is not responsible for any errors or omissions or for results obtained from use of such information. See back of publication invoice for complete terms and conditions.

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