wwwiciscom 1

Asia Chemicals Outlook 2017 Webinar Series

OLEFINS AND POLYOLEFINS

17 January 2017

Watch the video here-httpembedvidyardcomshareAh7nzZgE81La2ibmgPQdqe

wwwiciscom 2

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 3

Ethylene Q4 2016 Review and 2017 Outlook

Propylene Q4 2016 Review and 2017 Outlook

Asia amp ME PE amp PP Q4 2016 Review

Asia amp ME PE amp PP 2017 Outlook

Summary

Agenda

wwwiciscom 4

Ethylene

wwwiciscom 5

Review - Q4 2016

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia ethylene spot prices 2016 $tonne

CFR NEA CFR SEA

Source ICIS

100

150

200

250

300

350

400

450

500

550

600

50

250

450

650

850

1050

1250

1450

Nap

hth

a p

rice

s

Eth

ylen

e p

rice

s m

argi

ns

NE Asia naphtha-based ethylene margin 2016 $tonne

NEA ethylene margin CFR NEA ethylene prices

CFR Japan naphtha prices

wwwiciscom 6

Outlook ndash 2017 supply

Lighter cracker turnaround schedule in Japan S Korea ndash

production to grow impact on exports likely minimal

Japanrsquos exports could stay close to low levels reached in 2016

KPICrsquos cracker expansion to boost S Korearsquos exports in H2 2017

Chinarsquos merchant supply higher on start-up of Fund Energyrsquos

MTO plant

SE Asia-NE Asia arbitrage may grow

Healthy supply from Mideast Europe US

Asia ethylene projects end 2016-2017Company Location C2 capacity addition (000 tonnesyr) Start-up scheduleReliance Jamnagar India 1500 (cracker) internally balanced Q1 2017

KPIC Onsan South Korea +330 to 800 (cracker) 150 surplus after expansion Mid 2017

Lotte Chemical Titan Pasir Gudang Malaysia 90 (catalytic cracking unit) ships to existing PE plants in Indonesia H2 2017

Fund (Changzhou) Energy amp Chemical Jiangsu China 165 (MTO) entirely for merchant sale no C2 downstream plants End 2016

CNOOC and Shell Petrochemicals (CSPC) Guangdong China 1000 (cracker) internally balanced H2 2017

0

20

40

60

80

100

120

140

160

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Japan S Korea C2 capacity losses due to cracker turnarounds (000 tonnes)

2016 2017 (Est)

Source ICIS

Source ICIS

wwwiciscom 7

Outlook ndash 2017 demand

Japan to remain regular importer

China ndash imports could grow on new downstream projects positive outlook for some derivative markets

Standalone ethylene downstream projects in China end 2016-2017

Company Location Product Capacity addition (lsquo000 tonnesyr) Start-up schedule

Qingdao Haijing Shandong China VCMPVCEDC 400400300Trial runs at complex during late Q3-Nov 2016 started PVC sales in Dec

Abel Chemical Jiangsu China SM 250Attained on-spec production in end-Nov 2016 started sales in mid-Dec

Qingdao Soda Ash Industrial Shandong China SM 500Construction to complete in mid-2017 start up in Q3

Total new ethylene demand410

Taiwan ndash major turnaround at CPCrsquos 720000 tonneyear No 6 cracker from Feb-H1 Apr ramp-up in operations of 2016 downstream projects likely to drive import demand higher

Indonesia ndash imports likely to increase

Asia PE market uncertain in Q4 when low-cost PE exports from US start ndash possible repercussions on cracker operations

Source ICIS

wwwiciscom 8

Propylene

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 4

Ethylene

wwwiciscom 5

Review - Q4 2016

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia ethylene spot prices 2016 $tonne

CFR NEA CFR SEA

Source ICIS

100

150

200

250

300

350

400

450

500

550

600

50

250

450

650

850

1050

1250

1450

Nap

hth

a p

rice

s

Eth

ylen

e p

rice

s m

argi

ns

NE Asia naphtha-based ethylene margin 2016 $tonne

NEA ethylene margin CFR NEA ethylene prices

CFR Japan naphtha prices

wwwiciscom 6

Outlook ndash 2017 supply

Lighter cracker turnaround schedule in Japan S Korea ndash

production to grow impact on exports likely minimal

Japanrsquos exports could stay close to low levels reached in 2016

KPICrsquos cracker expansion to boost S Korearsquos exports in H2 2017

Chinarsquos merchant supply higher on start-up of Fund Energyrsquos

MTO plant

SE Asia-NE Asia arbitrage may grow

Healthy supply from Mideast Europe US

Asia ethylene projects end 2016-2017Company Location C2 capacity addition (000 tonnesyr) Start-up scheduleReliance Jamnagar India 1500 (cracker) internally balanced Q1 2017

KPIC Onsan South Korea +330 to 800 (cracker) 150 surplus after expansion Mid 2017

Lotte Chemical Titan Pasir Gudang Malaysia 90 (catalytic cracking unit) ships to existing PE plants in Indonesia H2 2017

Fund (Changzhou) Energy amp Chemical Jiangsu China 165 (MTO) entirely for merchant sale no C2 downstream plants End 2016

CNOOC and Shell Petrochemicals (CSPC) Guangdong China 1000 (cracker) internally balanced H2 2017

0

20

40

60

80

100

120

140

160

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Japan S Korea C2 capacity losses due to cracker turnarounds (000 tonnes)

2016 2017 (Est)

Source ICIS

Source ICIS

wwwiciscom 7

Outlook ndash 2017 demand

Japan to remain regular importer

China ndash imports could grow on new downstream projects positive outlook for some derivative markets

Standalone ethylene downstream projects in China end 2016-2017

Company Location Product Capacity addition (lsquo000 tonnesyr) Start-up schedule

Qingdao Haijing Shandong China VCMPVCEDC 400400300Trial runs at complex during late Q3-Nov 2016 started PVC sales in Dec

Abel Chemical Jiangsu China SM 250Attained on-spec production in end-Nov 2016 started sales in mid-Dec

Qingdao Soda Ash Industrial Shandong China SM 500Construction to complete in mid-2017 start up in Q3

Total new ethylene demand410

Taiwan ndash major turnaround at CPCrsquos 720000 tonneyear No 6 cracker from Feb-H1 Apr ramp-up in operations of 2016 downstream projects likely to drive import demand higher

Indonesia ndash imports likely to increase

Asia PE market uncertain in Q4 when low-cost PE exports from US start ndash possible repercussions on cracker operations

Source ICIS

wwwiciscom 8

Propylene

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 5

Review - Q4 2016

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia ethylene spot prices 2016 $tonne

CFR NEA CFR SEA

Source ICIS

100

150

200

250

300

350

400

450

500

550

600

50

250

450

650

850

1050

1250

1450

Nap

hth

a p

rice

s

Eth

ylen

e p

rice

s m

argi

ns

NE Asia naphtha-based ethylene margin 2016 $tonne

NEA ethylene margin CFR NEA ethylene prices

CFR Japan naphtha prices

wwwiciscom 6

Outlook ndash 2017 supply

Lighter cracker turnaround schedule in Japan S Korea ndash

production to grow impact on exports likely minimal

Japanrsquos exports could stay close to low levels reached in 2016

KPICrsquos cracker expansion to boost S Korearsquos exports in H2 2017

Chinarsquos merchant supply higher on start-up of Fund Energyrsquos

MTO plant

SE Asia-NE Asia arbitrage may grow

Healthy supply from Mideast Europe US

Asia ethylene projects end 2016-2017Company Location C2 capacity addition (000 tonnesyr) Start-up scheduleReliance Jamnagar India 1500 (cracker) internally balanced Q1 2017

KPIC Onsan South Korea +330 to 800 (cracker) 150 surplus after expansion Mid 2017

Lotte Chemical Titan Pasir Gudang Malaysia 90 (catalytic cracking unit) ships to existing PE plants in Indonesia H2 2017

Fund (Changzhou) Energy amp Chemical Jiangsu China 165 (MTO) entirely for merchant sale no C2 downstream plants End 2016

CNOOC and Shell Petrochemicals (CSPC) Guangdong China 1000 (cracker) internally balanced H2 2017

0

20

40

60

80

100

120

140

160

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Japan S Korea C2 capacity losses due to cracker turnarounds (000 tonnes)

2016 2017 (Est)

Source ICIS

Source ICIS

wwwiciscom 7

Outlook ndash 2017 demand

Japan to remain regular importer

China ndash imports could grow on new downstream projects positive outlook for some derivative markets

Standalone ethylene downstream projects in China end 2016-2017

Company Location Product Capacity addition (lsquo000 tonnesyr) Start-up schedule

Qingdao Haijing Shandong China VCMPVCEDC 400400300Trial runs at complex during late Q3-Nov 2016 started PVC sales in Dec

Abel Chemical Jiangsu China SM 250Attained on-spec production in end-Nov 2016 started sales in mid-Dec

Qingdao Soda Ash Industrial Shandong China SM 500Construction to complete in mid-2017 start up in Q3

Total new ethylene demand410

Taiwan ndash major turnaround at CPCrsquos 720000 tonneyear No 6 cracker from Feb-H1 Apr ramp-up in operations of 2016 downstream projects likely to drive import demand higher

Indonesia ndash imports likely to increase

Asia PE market uncertain in Q4 when low-cost PE exports from US start ndash possible repercussions on cracker operations

Source ICIS

wwwiciscom 8

Propylene

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 6

Outlook ndash 2017 supply

Lighter cracker turnaround schedule in Japan S Korea ndash

production to grow impact on exports likely minimal

Japanrsquos exports could stay close to low levels reached in 2016

KPICrsquos cracker expansion to boost S Korearsquos exports in H2 2017

Chinarsquos merchant supply higher on start-up of Fund Energyrsquos

MTO plant

SE Asia-NE Asia arbitrage may grow

Healthy supply from Mideast Europe US

Asia ethylene projects end 2016-2017Company Location C2 capacity addition (000 tonnesyr) Start-up scheduleReliance Jamnagar India 1500 (cracker) internally balanced Q1 2017

KPIC Onsan South Korea +330 to 800 (cracker) 150 surplus after expansion Mid 2017

Lotte Chemical Titan Pasir Gudang Malaysia 90 (catalytic cracking unit) ships to existing PE plants in Indonesia H2 2017

Fund (Changzhou) Energy amp Chemical Jiangsu China 165 (MTO) entirely for merchant sale no C2 downstream plants End 2016

CNOOC and Shell Petrochemicals (CSPC) Guangdong China 1000 (cracker) internally balanced H2 2017

0

20

40

60

80

100

120

140

160

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Japan S Korea C2 capacity losses due to cracker turnarounds (000 tonnes)

2016 2017 (Est)

Source ICIS

Source ICIS

wwwiciscom 7

Outlook ndash 2017 demand

Japan to remain regular importer

China ndash imports could grow on new downstream projects positive outlook for some derivative markets

Standalone ethylene downstream projects in China end 2016-2017

Company Location Product Capacity addition (lsquo000 tonnesyr) Start-up schedule

Qingdao Haijing Shandong China VCMPVCEDC 400400300Trial runs at complex during late Q3-Nov 2016 started PVC sales in Dec

Abel Chemical Jiangsu China SM 250Attained on-spec production in end-Nov 2016 started sales in mid-Dec

Qingdao Soda Ash Industrial Shandong China SM 500Construction to complete in mid-2017 start up in Q3

Total new ethylene demand410

Taiwan ndash major turnaround at CPCrsquos 720000 tonneyear No 6 cracker from Feb-H1 Apr ramp-up in operations of 2016 downstream projects likely to drive import demand higher

Indonesia ndash imports likely to increase

Asia PE market uncertain in Q4 when low-cost PE exports from US start ndash possible repercussions on cracker operations

Source ICIS

wwwiciscom 8

Propylene

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 7

Outlook ndash 2017 demand

Japan to remain regular importer

China ndash imports could grow on new downstream projects positive outlook for some derivative markets

Standalone ethylene downstream projects in China end 2016-2017

Company Location Product Capacity addition (lsquo000 tonnesyr) Start-up schedule

Qingdao Haijing Shandong China VCMPVCEDC 400400300Trial runs at complex during late Q3-Nov 2016 started PVC sales in Dec

Abel Chemical Jiangsu China SM 250Attained on-spec production in end-Nov 2016 started sales in mid-Dec

Qingdao Soda Ash Industrial Shandong China SM 500Construction to complete in mid-2017 start up in Q3

Total new ethylene demand410

Taiwan ndash major turnaround at CPCrsquos 720000 tonneyear No 6 cracker from Feb-H1 Apr ramp-up in operations of 2016 downstream projects likely to drive import demand higher

Indonesia ndash imports likely to increase

Asia PE market uncertain in Q4 when low-cost PE exports from US start ndash possible repercussions on cracker operations

Source ICIS

wwwiciscom 8

Propylene

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 8

Propylene

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 9

Review ndash Q4 2016

Price corrected in mid October as supply lengthened

SE Asia tracking NE Asia losses in mid October

SE Asia subdued in November as PP producers started turnarounds

Uptrend in December in NE Asia supported by strong PP futures and limited spot cargoes due to contract negotiations

Uptrend in December in SE Asia as demand increased from PP producers returning from turnarounds

600

650

700

750

800

850

900

950

Spo

t p

rice

(U

SD)

C3 Spot prices in Asia (Q3-Q4 2016)

CFR NEA (USD) CFR SEA (USD)

Source ICIS

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 10

Outlook ndash 2017 supply

Total expected losses from propylene production

units (excluding crackers) until September 2017

at 92800 tonnes

Japanrsquos exports likely to stay at same levels

year on year

South Korea may see exports climb

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

kt

201617

NE Asia production losses due to turnarounds

Production losses 2016 Production losses 2017Source ICIS

Source ICIS

Asia propylene projects end 2016-2017

Company Location Facility C3 capacity addition (000 tonnesyr)Start-up schedule

Downstream (lsquo000 tonnesyr)

Meide Fujian China PDH 660 End 2017-2018 350 PPFund (Changzhou) Energy amp Chemical Changzhou China MTO 165

Started on 25 Dec 2016 300 PP

Jiangsu Sailboat Jiangsu China MTO 460Started on 26 Dec 2016 260 ACN

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 11

Outlook ndash 2017 demand

China to continue to import propylene despite new start-ups in recent months

Acrylic acid (AA) saw improving margins in Q4 2016 and import demand is expected to be bullish due to limited supply from China and Europe

Propylene oxide (PO) saw healthy margins in Q4 2016 but Q1 2017 outlook uncertain Demand in Q1 may weaken as Lunar New Year holiday approaches

Acrylonitrile (ACN) outlook healthy as producers have upcoming turnarounds Spot prices expected to be supported especially after Lunar New Year holiday

New standalone propylene downstream plants in China

Shandong Luxi (2-EH) 300000 tonneyr March 2017

Shandong Haili (ACN) 260000 tonneyr End 2017 to 2018

Jinling Huntsman New

Materials (PO)

240000 tonneyr June to July 2017

Source ICIS

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 12

Polyethylene amp Polypropylene

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 13

China SEA PE Review ndash Q4 2016

11000

11200

11400

11600

11800

12000

12200

12400

LLDPE spot prices ($tonne)

Chinarsquos LLDPE and LDPE prices shot up after Golden Week holiday in October amid restocking activities and tighter supply

Chinarsquos prices fell in Nov to mid-Dec amid availability of competitively priced cargoes from US and India and sharp falls in LLDPE futures market

Relatively weak demand in SEA capped prices in Q4 2016

Volatile SEA currencies and policies exerted pressure on prices

11000

11500

12000

12500

13000

13500

14000

LDPE spot prices ($tonne)

SEA (D) SEA (ND) China

Source ICIS

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 14

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Flat Yarn Spot Prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

China SEA PP Flat Yarn Review ndash Q4 2016

Prices in China overtook prices in SEA twice in Q4 2016

Redirection of spot allocations from SEA to China due to better netback

Physical spot prices in China impacted by speculative buying and selling in futures market

Import trade in SEA hampered by devaluation of regional currencies

Source ICIS

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 15

China SEA PP Block Co-Polymer Review ndash Q4 2016

Block co-polymer prices relatively more stable compared to homo-polymer

Balanced demand and supply fundamentals

Widening gap between dutiable and non-dutiable prices due to limited supply of ASEAN cargoes

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

Asia PP Block Co-Polymer spot prices 2016

CFR China (USD) CFR SEA Dutiable (USD) CFR SEA Non-dutiable (USD)

Source ICIS

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 16

India PE PP Review ndash Q4 2016

Demand hit by demonetisation move in

November

Poor retail sales currency crunch

Construction sector hit

LLDPE film imports (Apr-Sep) down 25

GAIL Pata 2 startup in March

Q4 demand prospects brightened on low

stocks

Market geared up for new domestic

supply

Pertains to Indian fiscal year 2016-17

0

100

200

300

400

500

600

700

800

HDPE film LLDPE film LDPE film

2016-17 (Apr-Sep) 2015-16 2014-15

Source Indian Commerce Ministry

Indian PE imports (lsquo000 tonnes)

000 10000 20000 30000 40000 50000 60000

2016-17 (Apr-Sep)

2015-16

2014-15

Indian PP imports (lsquo000 tonnes)

PP copolymersPP homopolymers

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 17

India PE PP Review ndash Q4 2016

1000

1050

1100

1150

1200

1250

1300

HDPE film LDPE film LLDPE film

Import prices ($tonne CFR India)

LDPE film prices improved on limited

domestic supply

HDPE LLDPE dampened by ample

domestic availability

Price discounts

PP prices saw limited upward movement

End-user demand hit by currency

crunch

Indian import influenced by import parity

of domestic product

800000

850000

900000

950000

1000000

1050000

1100000

1150000

India PP import prices

PP film CFR India

PP raffia CFR India

Source ICIS

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 18

Middle East Review ndash Q4 2016

Price ldquotakersrdquo not price ldquomakersrdquo

Lacklustre downstream demand in GCC

Political instability in the East Med

Finished product exports from Jordan

weak

Reduced need to restock

Ample regional availability

Arrived at after deducting domestic freight and other charges from DELIVERED prices Source ICIS

800000

850000

900000

950000

1000000

1050000

1100000

Middle East PP prices

CFR GCC CFR East Med

1050000

1070000

1090000

1110000

1130000

1150000

1170000

1190000

1210000

1230000

Middle East PE prices

HDPE film CFR GCC

LLDPE film CFR GCC

HDPE film CFR East Med

LLDPE film CFR East Med

Middle East PP raffia prices

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 19

PE Outlook ndash 2017 supply

Import prices likely under pressure in 2017 on increased supply

Additional capacity from US shale gas projects CTO projects and India

China prices due for correction SEA prices to catch up with China

China continues to be the main Asia market

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Zhongtian Hechuang Energy InnerMongolia

CTO LDPE 250 2017

Zhongrsquoan Lianhe Coal Chemical Anhui China

CTO HDPELLDPE 350 2017

Qinghai Mining China CTO HDPELLDPE 300 2017

Jiutai Energy Inner Mongolia CTO HDPELLDPE 250 2017

CNOOC Huizhou Guangdong China

Naptha-C2 HDPE amp LLDPE 400 +300

Q4 2017

Qinghai Damei Coal Industry China

CTO HDPELLDPE 300 2017

Shenhua Ningxia China CTO HDPELLDPE 430 2017

Company Location PE Capacity (lsquo000 tonnesyr)

Start-up schedule

Sadara Saudi Arabia 1100 Q4 20162017

Nova Canada 450 Q1 2017

Dow Chemical US 750 2017

Sasol US 470 2017

Chevron Phillips US 1000 2017

Opal India 1060 H1 2017

Reliance India 1000 H1 2017

Sadara cracker is currently shut for planned maintenance for 6 weeks from 28 Dec 2016

Source ICIS

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 20

PP Outlook ndash 2017 supply

Supply in Q1 expected to be tight due to maintenance turnarounds in SEA

Expansions across Asia in 2017

Source ICIS

Company Location PP capacity additions (000 tonnesyr)

Start-up schedule

Opal Dahej India 340 H1 2017

Integrated Refinery and Petrochemical Co (IRPC) Map Ta Phut Thailand

300 Mid-2017

Shenhua Ningxia Coal Group Co Ningxia China CTO PP 580 2017

CNOOC and Shell Petrochemicals Company Limited (CSPC) Guangdong China

Naphtha cracking PP 400 2017

Fujian Zhongjiang Petrochemical Co Ltd Fujian China

PDH PP 350 2017

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 21

PE PP Outlook ndash 2017 demand

Relatively weak demand expected to exert pressure on Asian prices

Dampened buying appetite in China diversion of cargoes to SEA

China expected to continue to have ample supply in 2017

Improved demand in India in January 2017 limited change in Middle East demand

Net importers such as Indonesia and Vietnam continue to drive import demand in SEA

Country 2016 2017 (estimate)

China 67 65

Indonesia 51 53

Vietnam 67 66

Developing East Asia 58 57

World 24 28

Economic Growth Projections (annual change)

0

5000

10000

15000

20000

25000

30000

PE Demand PE Supply PP Demand PP Supply

China demand-supply balance (lsquo000 tonnes)

2015 2016 (estimate) 2017 (estimate)

Source ICISSource World Bank

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 22

Summary

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 23

Summary

Ethylene market to see continued strong inflows from outside Asia increased production in Japan S Korea

Tightness in propylene supply expected in February to March in both NE and SE Asia ndash

spot prices to be supported

Import PEPP prices in China to set price direction in SEA growing global capacities might

put pressure on PEPP import prices

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report

wwwiciscom 25

Navigate your way through 2017 and beyond As we are about to wrap up 2016 ensure you have the data and insight you need to start planning for the coming year

and gain access to powerful tools that will help you and your business operate more effectively in 2017

Historical and current

pricing data

Support your position during

contract negotiations with

access to regional spot or

contract prices published

with commentaries on the

latest trades transactions

and key market drivers

Request a free sample report

Real-time news service

React quickly to market changes

and developments by being the

first to find out about breaking

news and analysis across the

global petrochemical markets Our

market-moving news articles cover

production updates plant

capacities output and shutdowns

plus so much more

Request a free trial

Supply and demand data

We give you an end-to-end

perspective across the global

petrochemical and refinery supply

chain enabling you to grasp the

local or regional scenario in a global

context Data includes import and

export volumes consumption plant

capacities production and product

trade flows ndash from 1978 up to 2030

Request a demo

China market intelligence

Anticipate where the China

markets are headed and create

robust production and investment

activities with access to domestic

supplydemand importexport

data downstream analysis and a

review of key issues and

development within the countryrsquos

unique petrochemical industry

Request a free sample report