Platts Pvc 24 June 2015

This Weeks Highlights:

Asian EDC/VCM: EDC flat, VCM $5/mt lower on thin trade

Asian PVC: Drops $5/mt on lower offers

INDEX:

Platts International Prices 1

Polymerupdate Indian Domestic Producer Price 1

Platts Polymer Shipping Costs (USD/MT) 1

Polymerupdate CIF India Prices 2

Polymerupdate Indian Open Market Price Table 2

Polymerupdate Indian Producer Posting Price Comparison 2

Heard in PVC Market 3

Platts International Market Commentary & Analysis 3

Polymerupdate - PVC Market Supply Scenario 4

Platts Price Analysis Of PVC Chain Processing Margins 5

Currency Rates 6

Crisil Research Macroeconomics & Currency Monthly Analysis 6

Point of Contact 8

Polymerupdate - About us & Copyright 8

Platts - About us & Copyright 8

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Week 25 June 24, 2015

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

PLATTS INTERNATIONAL PRICES (USD/MT)

Product June 17 (WK 24)

June 24 (WK 25)

Price Change on Week

India Crude basket: (USD/b) 61.72 62.37 + 0.65 Naphtha: (MOP West India) 537.43 536.98 - 0.45 EDC :

CFR Far East Asia 364-366 364-366 0

CFR South East Asia 371-373 371-373 0

VCM :

CFR Far East Asia 689-691 684-686 - 05 CFR South East Asia 744-746 739-741 - 05 PVC :

PVC Suspension CFR China 854-856 849-851 - 05 PVC Suspension CFR SEA 854-856 849-851 - 05 PVC Suspension CFR India 879-881 874-876 - 05 Specifications: Cargoes of 100-500mt delivered 15-30 days forward from date of publication with up to 30 days credit, basis CFR Far East Asia: China main ports (Shanghai, Shenzhen, Ningbo, Shantou, Hong Kong); CFR South East Asia: Indonesia (Jakarta, Surabaya), Singapore, Philippines (Manila Bay), Malaysia (Port Kelang), Thailand (Bangkok, Laem Chabang, Map Ta Phut), Vietnam (Ho Chi Minh). Platts prices reflect spot market values on the day of publication. India Crude Import Basket Calculation: ( (Dubai + Oman) / 2 * 65.2% ) + (Dated Brent * 34.8%) MOP West India : Mean of Platts FOB West India naphtha export price

China Domestic (YUAN/MT EX-WORK) :

Ethylene Based 6240-6260 6140-6160 - 100 Carbide Based 5740-5760 5640-5660 - 100

POLYMERUPDATE

INDIA DOMESTIC PRODUCER PRICE - RIL (Ex Hazira)

Product June 17 (WK 24) June 24 (WK 25) Price Change on Week

INR/KG USD/MT INR/KG USD/MT INR/KG

PVC Grade

Suspension 65.50 922 65.50 922 0

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

PLATTS Polymer shipping costs (USD/MT)

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

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

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Week 25 June 24, 2015


POLYMERUPDATE (CIF INDIA PRICES)

CIF INDIA BY ORIGIN (Nhava Sheva Port)

South Korea Thailand Taiwan

WK 24 WK 25 Price Change on Week



June 17 June 24 June 17 June 24 June 17 June 24

Suspension 880 880 0 900 900 0 920 920 0 Emulsion 1060 1060 0 -- -- -- -- 1070 1070 0 - All prices are in USD/MT CIF India (Nhava Sheva) - For South Korea, Singapore, Thailand and Saudi Arabia : Cargo size of 50-100mt delivered within 30 days. - Price assessments are based on information gathered from a cross section of the industry that includes resin producers, processors, traders and distributors. - Standard repeatable orders (based on confirmed market deals) form the basis of the prices.

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

Product Mumbai Delhi Kolkata Bangalore Indore Chennai Ahmedabad Hyderabad

Ethylene Based PVC 73 - 73.5 77 - 77.5 76 - 77 73 - 74 76 - 77 76 - 77

(Incl. of VAT) 80-81 79 - 80

POLYMERUPDATE - INDIAN PRODUCER POSTING PRICE COMPARISON (GRADE WISE)

PVC SUSPENSION K-67 w.e.f 11 June -2015

Producer Grade No. *INR/MT USD/MT

RIL 67GER01 (Ex-Gandhar) 65500 922

RIL 67.01 (Ex-Hazira) 65500 922

RIL 57GER01 (Ex-Gandhar) 67000 944

RIL 57.11 (Ex-Hazira) 67000 944

*Domestic Indian producer prices are quoted in INR/MT basic (Nett of all taxes) ; equivalent USD/MT price is calculated at current US/INR rate. *Lot Size: 1 Truck Load (10 to 16 MT) - USD Price calculation: INR/MT Aprox. Clearing and Forwarding Charges / Basic Duty / Exchange Rate = USD/MT (For example: 82330 2500 / 1.075 / 54.24 = 1396)

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Week 25 June 24, 2015


Currency rates equivalent to 1 US Dollar :

Countries Currency Rates Countries Currency Rates

Indian Rupees (INR) 63.59 Japan Yen (JPY) 123.95

Pakistan Rupees (PKR) 101.72 Indonesia Rupiahs (IDR) 13,274.94

China Yuan Renminb (CNY) 6.20 Malaysia Ringgits (MYR) 3.74

Bangladesh Taka (BDT) 77.78 Singapore Dollars (SGD) 1.34

Sri Lanka Rupees (LKR) 133.96 South Korea Won (KRW) 1105.97

Thailand Baht (THB) 33.74 Saudi Arabia Riyals (SAR) 3.75

Taiwan New Dollars (TWD) 30.89 United Arab Emirates Dirhams (AED) 3.67

Heard in PVC MARKET

Platts:

PVC: Domestic Chinese Carbide-based PVC offer heard at Yuan 5,500-5,800/mt, L/C at sight, 100-500 mt

PVC: Domestic Chinese Ethylene-based PVC trade levels heard at Yuan 6,100-6,300/mt, L/C at sight, 100-500 mt

PVC: July loading cargoes heard bid at $870/mt CFR India, L/C at sight, 100-500 mt

PVC: July loading cargoes trades heard at $850/mt CFR China, L/C at sight, 100-500 mt

PVC: July loading cargoes heard offered at $860/mt CFR Southeast Asia, L/C at sight, 100-500 mt, Northeast Asia origin

PVC: July loading cargoes heard offered at $910/mt CFR India, L/C at sight, 100-500 mt, Korea origin

Polymerupdate: 23-6-2015: Taiwan producer offers PVC Suspension at $ 900/mt in India (CIF Nhava Sheva Port basis)

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Week 25 June 24, 2015


PLATTS INTERNATIONAL MARKET COMMENTARY & ANALYSIS

Asian EDC/VCM: EDC flat, VCM $5/mt lower on thin trade

- EDC flat in thin trade

- VCM $5/mt lower as buyers hold back

Asian ethylene dichloride prices were assessed flat this week amid thin activity. US producers were heardoffering deep-sea EDC cargoes at $300/mt FOB USG, to little interest. August arriving deep-sea cargoeswere seen to be tight in Far East Asia. Buying ideas were heard below $350/mt CFR Far East Asia, littlechange week on week."There is currently a gap of around $30-35/mt between selling and buying ideasdue to high feedstock ethylene prices in Far East Asia," noted a market participant. "Buyers were notkeen to buy at the moment due to weak downstream PVC, and were looking to lower operation ratesinstead," said a trader. Meanwhile, the CFR Southeast Asia EDC price was assessed flat at $372/mt thisweek, in tandem with the steady Far East Asia market. Feedstock ethylene fell $5/mt over the sameperiod to $1,415/mt CFR Northeast Asia and was unchanged for the CFR Southeast Asia marker at$1,430/mt Thursday. Asian vinyl chloride monomer prices fell $5/mt week on week due to the bearishdownstream PVC market. The CFR Far East Asia marker was assessed at $685/mt Thursday. Offers forJuly loading cargoes were heard at $690-700/mt CFR Far East Asia against buying ideas at around$680/mt CFR Far East Asia, but no trades were heard. Participants were seen to remain on the sidelinesin anticipation of new monthly PVC spot offers next week before starting discussions for July cargoes.The CFR Southeast Asia VCM price was assessed down $5/mt at $740/mt Thursday, in consideration oftradable levels heard at around $740/mt. Ethylene accounts for 29% of EDC feedstock costs and 49% ofVCM feedstock costs.

RATIONALE: EDC: The CFR Far East Asia ethylene dichloride market was assessed flat week on week at $365/mtThursday. Deep-sea cargoes were heard offered at around $300/mt FOB USG, to little interest. Buyingideas were heard below $350/mt CFR Far East Asia, comparable to the week before. Meanwhile, the CFRSoutheast Asia EDC price was assessed flat at $372/mt Thursday, in tandem with the steady FEA market.

VCM: The CFR Far East Asia vinyl chloride monomer market was assessed down $5/mt from last week at$685/mt Thursday. Offers for July loading cargoes were heard at $690-700/mt CFR Far East Asia against buying ideas at around $680/mt CFR Far East Asia, but no trades were heard. The CFR Southeast Asia VCM price was assessed down $5/mt at $740/mt Thursday, in consideration of tradable levels heard ataround $740/mt.

Asian PVC: Drops $5/mt on lower offers

- Formosa starts offering for July - Thin trades as buyers hold back Taiwan's Formosa Plastics started offering for July-loading cargoes Tuesday, at $910/mt CFR India and $860/mt CFR Southeast Asia, both down $10/mt from last month; and $860/mt CFR China, down$20/mt from June, and $820/mt FOB Taiwan, flat from last month's offer. The CFR India marker dropped $5/mt week on week to be assessed at $875/mt Wednesday. Offers for ethylene-based PVC were heard at $910-920/mt CFR India, against thin buying interest at $870/mt CFR India. Tradingactivity was slow this week as buyers were on the sidelines looking out for further price reductions.Amid lower domestic prices and high inventory levels, buyers were holding back. Sellers expectinventory to gradually deplete over the next two months, and demand to firm ahead. The CFR China marker was assessed $5/mt lower at $850/mt. Offers were heard at $860/mt. Domestic China ethylene-based PVC was assessed at Yuan 6,150/mt, and carbide-based PVC was assessed at Yuan 5,650/mt, both down Yuan 100/mt from last week. Prices in the Chinese domestic market had dropped in line with lower offers for imported cargoes to maintain buying interest. The CFR Southeast Asia marker wasassessed down $5/mt this week at $850/mt, as sentiment softened on lower offers. RATIONALE: The CFR India marker was assessed at $875/mt Wednesday, down $5/mt week on week. No tradeswere confirmed as July offers had just emerged Tuesday, but notional trade levels were heard at $860-890/mt for Northeast Asia origin cargoes. The CFR China marker was assessed at $850/mt, down $5/mt from last week. Trades were heard at $850/mt CFR China this week, below offers heard at $860/mt.The CFR Southeast Asia marker was assessed down $5/mt week on week at $850/mt after offer levelsfell. Notional deal levels were noted at $850/mt CFR Southeast Asia. Domestic China ethylene-based PVC was assessed down Yuan 100/mt at Yuan 6,250/mt, while carbide-based PVC was assessed flat at Yuan 5,650/mt, unchanged from last week. Delivered cargoes for ethylene-based PVC were heard traded mostly at Yuan 6,100-6,300/mt. Delivered cargoes for carbide-based PVC were heard traded at Yuan 5,500-5,800/mt.

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Week 25 June 24, 2015


POLYMERUPDATE - PVC MARKET SUPPLY SCENARIO

PVC plant restarted by Yidong Group Dongxing Chemical Yidong Group Dongxing Chemical has restarted its polyvinyl chloride (PVC) plant following maintenance turnaround. The plant has restarted on June 11, 2015 for maintenance turnaround. The plant was shut for maintenance turnaround. Located in Inner Mongolia, the plant has a production capacity of 300,000 mt/year. PVC plant shut by Junzheng Chemical Junzheng Chemical has taken off-stream its polycinyl chloride (PVC) plant for maintenance turnaround. The plant was shut early this week. It is expected to remain off-stream for around one month. Located at Wuhai in Inner Mongolia, the plant has a production capacity of 320,000 mt/year. PVC plant planned to be shut by CGPC CGPC is in plans to shut its polyvinyl chloride (PVC) plant for maintenance

turnaround. The plant is likely to be shut in H2 July, 2015. It is likely to remain off-stream for around two weeks. Located in Linyuan, Taiwan, the plant has a production capacity of 170,000 mt/year. PVC plant likely to be shut by Yili Nangang Yili Nangang Chemical is likely to shut a polyvinyl chloride (PVC) plant for maintenance turnaround. The plant is planned to be shut on June 25, 2015. It is likely to remain off-stream for around one month. Located in Xinjiang, China, the plant has a production capacity of 120,000 mt/year.

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Week 25 June 24, 2015


PLATTS Price Analysis of PVC Chain Processing Margins

Naphtha to Ethylene Naphtha to PVC

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

Premium or discount of CFR FE Asia PVC prices over naphtha

Ethylene to PVC

PVC : VCM Ratio

Premium or discount of CFR FE Asia PVC prices compared to ethylene CFR FE Asia PVC prices as a ratio to VCM

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Week 25 June 24, 2015


CRISIL Research Macroeconomics & Currency Monthly Analysis

Overview: Where the rains must pour Indias number one short-term worry is the prospect of a second straight year of deficient rains. The Indian Meteorological Department (IMD), while lowering its monsoon forecast to 12% below the long period average, also predicted a 90% probability of an El -Nino event playing out. This casts a shadow over agricultural production. Delayed start to the monsoons this year has lowered kharif sowing by 9% as of June 12 compared with the same period last year. Though this per se is not much of a worry - the shortfall can be covered if rains pick up - the next 2 months (July and August) will be crucial. Given the significant downside risk from the monsoon anomaly predicted by IMD this year, we have cut our GDP growth forecast to 7.4% from 7.9% for fiscal 2016. We, however, expect consumer price index-based inflation to be contained at 5.8%, a tad lower than 6% last year, for three reasons: 1) enough cushion from food grain buffer stocks, 2) depressed global food prices facilitating imports, and 3) expectation of proactive food management and anti-hoarding steps from the government.

Agriculture accounts for less than a fifth of Indias GDP today, and is not the key driver of growth it once was. All the same, even in good times, the consumption sectors - particularly FMCG - look forward to normal rains for an extra kick to their sales. Today, when consumption and investment demand are weak and rural distress is high due to poor rains last year followed by damage from unseasonal rains this year, normal rains become all the more crucial. IIP indicates industry growth gaining traction IIP grew by 4.1% in April as compared to 2.5% in March. Growth in IIP was supported by the manufacturing sector that grew by 5.1% versus 2.8% in March. In addition, according to use-based classification, capital goods rose by 11.1% y-o-y, followed by consumer goods (3.1%), and basic goods (2.8%). Production in electricity, as indicated by the IIP sub-index, signalled a contraction in the sector in April (-0.2%), albeit this was partly due to a high base in the previous year. The month-on-month seasonally-adjusted (SA) growth also rose to 3.4% in April as compared to -1.0% in the previous month. Manufacturing index growth revived in the month led by higher growth in food product and beverages (4.9%), wearing apparel (10.1%), wood products (16.2%), basic metals (7.3%) and machinery and equipment (20.6%). The month-on-month SA growth also picked up to 3.8% from -0.8% in March, signalling an uptick in momentum. On the other hand, core sector (accounting for 38% of IIP) growth remained negative for the second consecutive month (-0.4%). This was as sectors such as electricity (-1.1%), cement (-2.4%), fertiliser (-0.1%), refinery (-2.9%) recorded negative growth. On the other hand, only coal and steel sub-indices signalled an expansion in volumes over the previous year.

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Week 25 June 24, 2015


Inflation rises in May Inflation rose to 5.01%, up from 4.87% in April. Higher fuel-related inflation - led by an increase of Rs 7.42/litre in petrol and Rs 5.6/litre in diesel prices during the month - was behind the inflation pick-up. In May, a combination of higher global oil prices (16% higher than March 2015 levels) and weaker rupee (8% y-o-y) pushed up retail fuel prices. The combined fuel index (fuel & light and transport & communication) rose to 3% in May from 1.9% in April. Food inflation provided relief, falling to 5.1% from 5.4% in May. Monsoon is the biggest risk hereon, but a lot will depend on government action to keep a tab on food inflation.

Rupee cedes more ground The rupee slipped a notch to 63.8/$ by May-end from 63.6/$ in April, although on a monthly average basis, it rose to63.8/$ compared with 62.8/$ the previous month. The local currency also fell against the euro in May to 71.2/EUR from67.8/EUR in April. The decline was driven by net outflows by foreign institutional investors (FIIs) from Indian markets; theUS dollar's continued strength against most global currencies; and month-end demand from importers.FIIs moved out of the Indian market, with net FII outflows standing at $2.2 billion from net inflows of $2.4 billion in April.Net equity outflows were at $0.9 billion in May and net outflows in the debt market came in at $1.3billion from net inflowsof $0.6 billion in April.

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

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Week 25 June 24, 2015


POLYMERUPDATE PLATTS

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

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