including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Acetic Acid • Vinyl Acetate

ISSUE NUMBER 237
1ST JUNE 2007

CHEMICAL BUSINESS FOCUS

A MONTHLY ROUNDUP AND ANALYSIS OF THE
KEY FACTORS SHAPING WORLD CHEMICAL MARKETS
CONTACT: WILLIAM BANN
Email: william@orbichem.com

• Celanese declares force majeure on acetyls due to Texas plant outage

• Celanese sets 50% global acetyls allocation for 60 days

• West Europe’s Q2 acetic acid contract prices down Euro20/mt

• Acetic acid prices continue upward climb in Asia during May

• Europe ethyl acetate supplies tighten after BP force majeure

• Global spot methanol market activity at low ebb, prices stagnate

Feedstocks Vinyl Acetate

Methanex has rolled over its contract price for June Celanese placed its global VAM customers
at $1.01/gal, but Southern Chemical dropped on 50% allocation 14 May for up to 60
its contract price by 5 c/gal to 95 c/gal for June. days following an unplanned outage at the
USG spot prices were 68-70 c/gal. In Europe, Clear Lake, Texas, acetic acid plant. On
spot was offered at Euro175/ton fob. In Asia, 24 May, Dow issued a price increase of 6
Methanex rolled over its posted contract price c/lb ($132.28/ton) in the US and Canada,
at $320/ton cfr for June. Methanol is generally and $150/ton in Latin America. In Europe,
considered balanced at the end of May. In Dow issued a price increase of Euro110/ton,
ethylene, US contract prices settled for April at although contract prices had been expected to
43.5 c/lb, an increase of 2.5 c/lb from March. fall prior to the price hike talk. VAM prices in
The May contract settled at a further increase of 1 Asia topped the $1000/ton level, with deals
c/lb to 44.5 c/gal. High raw material costs and reported done in mid-to-late May at $1020-
snug supply have supported ethylene spot prices 1030/ton cfr Northeast Asia and $10-20
in Europe. Strong demand from the polyethylene higher in Southeast Asia.
sector has supported prices in Asia.
Ethyl Acetate
Acetic Acid US ethyl acetate producers issued price increases
Celanese declared force majeure on 14 for 1 June of 3 c/lb. Celanese placed its global
May at its 1.25 million tpa unit at Clear Lake, customers on 50% allocation for esters solvents for
Texas. Subsequently, Celanese initially placed its 60 days following its force majeure declaration
customers on 50% allocation for up to 60 days, on acetic acid. Also, the Celanese acetic acid
and held firm on that declaration later in the month plant at Pampa was shut in late May. BP declared
after an unplanned outage hit its Pampa, Texas, force majeure on ethyl acetate from Hull, UK, on
facility. In western Europe, the Q2 contract price 1 May due to production problems which began
reportedly settled down an average of Euro15- in April. Ethyl acetate prices in Europe reportedly
20/ton compared to Q1. Acetic acid spot prices increased by up to Euro20/ton in May. In Asia,
in Asia rose during May, reaching levels close to prices in most major markets moved up sharply
$700/ton cfr China Main Port. during May due to higher priced feedstocks.
Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

PRICE MONITOR
US PRICES
28 February 30 March 30 April 31 May 31 May
2007 2007 2007 2007 2007
¢/pound ¢/pound ¢/pound ¢/pound $/ton

Acetic Acid Domestic* 48.0-52.0 48.0-52.0 48.0-52.0 48.0-52.0 FOB 1058-1146

Export 24.0-26.0 26.0-27.0 26.0-27.0 28.0-29.0 FOB 617-639

VAM Domestic 67.0-75.0 67.0-75.0 66.0-74.0 66.0-74.0 FOB 1455-1631

Export 42.0-43.0 42.0-44.0 42.0-44.0 42.5-43.5 FOB 937-959

Ethyl Acetate‡ Domestic 33.0-34.0 33.0-34.0 32.0-34.0 32.0-34.0 DEL 705-750

Acetic Anhydrid Domestic 65.0-69.0 65.0-69.0 65.0-69.0 65.0-69.0 DEL 1433-1521

Acetaldehyde Domestic N.A. N.A. N.A. N.A. DEL N.A.

WEST EUROPEAN PRICES

€/ton €/ton €/ton €/ton $/ton

Acetic Acid Contract T2 855-905 855-905 855-905 835-885 DEL 1121-1188

VAM Contract T2 1205-1275 1205-1275 1205-1275 1205-1275 DEL 1617-1711

Ethyl Acetate Domestic 820-850 820-850 840-860 840-860 DEL 1128-1154

Acetic Anhydrid Domestic 1195-1370 1195-1370 1195-1370 1200-1370 DEL 1611-1839

Acetaldehyde Domestic N.A. N.A. N.A. N.A. DEL N.A.

ASIAN PRICES
$/ton $/ton $/ton $/ton

Acetic Acid Taiwan Import 610-630 640-650 630-640 670-680 CFR

VAM Taiwan Import 1040-1060 1050-1070 1020-1050 1020-1050 CFR

S Korea Import 1040-1060 1050-1070 1020-1050 1020-1050 CIF

Ethyl Acetate Taiwan Import 930 930 880 920 CFR

S Korea Import 930 930 880 920 CIF

N.A. = Not Available ‡ = 8-20 mlb/year direct * = Price for arms length customers

"Contract" prices are quarterly contracts

Current one US dollar equivalent (30 May 2007)

€: 0.745 £: 0.506 (1/1.976) Yen 121.5 NT$: 32.98 Won: 931.00 RMB Yuan: 7.65

Current one € equivalent (30 May 2007)

US$ 1.365 £: 0.682 (1/1.466) Yen 163.2

The prices we quote are our best estimates. They are free market prices - i.e. prices for arms length merchant transactions. The actual price paid by an
individual customer depends upon order size, terms of trade, geographical location, and customer status. We believe that deals could well have been done at
prices lower and higher than the prices we quote. Some readers use our prices as indices and we think this might be the best way to use them. From time to time
we retrospectively change published prices if new information comes to hand. Relative movements in the value of currencies can impact the prices we quote.

Information contained in this report is obtained from sources believed to be reliable, however no responsibility nor liability will be
accepted by Tecnon OrbiChem for commercial decisions claimed to have been based on the content of the report.

Reproduction of any part of this work by any process whatsoever without written permission of Tecnon OrbiChem is strictly forbidden

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE FEEDSTOCKS

PRICE MONITOR Methanol

There was some temporary tightness in the US market during the first half of May because one or two
FEEDSTOCKS ships were delayed. However, during the second half of the month methanol availability has again moved
Methanol towards the long side of balanced.
Ethlylene
There have generally been no disruptions to methanol production in North or Latin America other than
ACETIC ACID scheduled maintenance stops already reported. It has been confirmed, however, confirmed that Methanex
has shut down one of its four units in Chile, because of restrictions in the supply of gas from Argentina. The
United States
closure is described as temporary, but it is not clear just how temporary that will be. Methanol spot prices
Europe on the US Gulf surged in late April and early May to over 80 c/gal. Numbers softened as supply improved
China and ended the month at 68-70 c/gal. Methanex has rolled over its contract price for June at $1.01/gal:
Asia Southern Chemical, however, has come down by 5 c/gal to 95 c/gal for June.

Japan
The West European methanol market is very quiet at the moment although the general level of demand
Consumption and Production remains good. Spot product is being offered at around Euro175/ton fob but there have been no deals
concluded recently. Statoil has begun the one-month scheduled turnaround of its 825,000 tpa plant in
VINYL ACETATE MONOMER Norway.
United States
West Europe The problems with methanol production in Iran are not yet solved. The new 1.65 million tpa Zagross No
1 plant will shut for 10 days beginning on 1 June to deal with mechanical problems. The 1 million tpa
China
Fanavaran plant may now be re-started at some time in June, but this is not certain at the moment. It went
Asia down with compressor problems early in April.
Japan
Consumption and Production Poor netbacks compared with the domestic market are deterring Chinese producers from exporting to
Korea. Methanex has again rolled over its APCP Asian Posted Contract price at $320/ton cfr for June. In
ETHYL ACETATE April, China was again a net exporter of methanol. With exports of 59,000 tons and imports of 35,000
tons, the gap has closed considerably. Nevertheless, imports for the month were down by nearly 40,000
United States
tons compared to the same period last year.
West Europe
China At the end of May, WTI crude is trading at $63-64/bbl and Brent at $68-69/ bbl. Prompt natural gas at
Asia the Henry Hub has been trading at close to $7.50/mmBtu during most of the second half of the month.
The near-month contract on the NYMEX was priced at much the same level until the end of May when
Japan
values started to increase. The June contract expired on 29 May at $7.591/mmBtu and July futures are
now trading at $7.90-7.95/mmBtu. The volume of gas in storage on 18 May was 1,946 Bcf, which was
POLYVINYL ALCOHOL
20.7% above the five-year average for the week.

ACETIC ANHYDRIDE Ethylene

United States
The ethylene contract price in the US for April was settled at 43.5 c/lb, an increase of 2.5 c/lb from March.
West Europe
High feedstock costs and a strong spot market meant that there was little resistance to producers’ nominated
Economic news increases. The May contract has been settled at a further increase of 1 c/lb to 44.5 c/gal.

Spot pricing remained strong in late May reaching a peak of 39.75 c/lb, largely influenced by high oil
company news prices. As oil came down by around $2.00/bbl in late May, ethylene spot numbers weakened a little
but only to 38-39 c/lb for June. Ethane has risen to around 75 c/lb, but it is still the preferred feedstock,
Access Tecnon yielding the best margin, closely followed by propane.

orbichem online High raw material costs and snug supply caused by scheduled and unscheduled plant shutdowns have
supported ethylene spot prices in Europe during May. Ineos has declared force majeure on ethylene,
propylene and butadiene from its Grangemouth, Scotland. site The (smaller) G4 cracker has been down
on a planned turnaround since mid-April but faults discovered during the shutdown will keep it down for
an additional three months. Spot prices have risen to $1230-1280/ton cif at the coast and to around
Euro980/ton delivered off the pipeline.

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE Prices for spot ethylene in Asia have increased during May. Strong demand from the polyethylene sector,
together with high raw material costs, has supported prices. In the latter part of May naphtha has been
PRICE MONITOR trading at around $725/ton. Also, Formosa chemical’s new 1.2million tpa cracker in Taiwan, the largest
in Asia, is not yet in full production following its start-up on 25 May. Production has not yet stabilised and
both ethylene and propylene output are at around 50% of capacity. A cargo for end-June lifting was sold
FEEDSTOCKS recently at $1070-1089/ton fob Korea.
Methanol
Ethlylene ACETIC ACID

ACETIC ACID United States

United States
Celanese declared force majeure on acetic acid on 14 May from its Clear Lake, Texas, plant, which at
Europe 1.25 million tpa of output, accounts for 11% of global capacity. A USG market source said it believed the
China plant had been down for a few days prior to the FM declaration. A report filed on the website of the Texas
Asia Commission on Environmental Quality states that the unit was shut on 11 May due to a leak in the “reactor
shell wall.” Celanese would not comment on the exact nature of the operational problem. A Celanese
Japan
spokesman said the company planned to restart the plant by the end of May.
Consumption and Production
It is estimated that Celanese lost between 50,000mt-70,000mt of acetic acid because of the outage, which
VINYL ACETATE MONOMER is about 20% of total US output for one month. (Total US output is projected at about 3 million tons for
United States 2007.)
West Europe
Along with the FM declaration, Celanese placed its global customers on 50% allocation for acetic acid,
China
vinyl acetate monomer, acetic anhydride and esters solvents for 60 days. It is understood that allocation
Asia levels will be re-evaluated once the acetic acid plant is restarted and running normally.
Japan
Consumption and Production In late May, market participants were waiting anxiously for any news about the status of the Clear Lake
unit. Talk was heard that Celanese attempted to restart the plant 24-25 May, but did not achieve stable
ETHYL ACETATE production rates and brought the unit down again. A Celanese spokesman said they were still planning to
restart the unit by the end of the month; however, at the time of publication, the unit had not yet restarted.
United States
West Europe The news did not get better for Celanese in late May. The 250,000 tpa acetic acid plant at Pampa, Texas,
China was knocked off-line late 24 May by a fire that struck a utility provider at the Pampa facility, according
Asia to a report filed on the TCEQ website. A Celanese spokesman confirmed the plant was down, but that
there was no damage to the acetic acid plant itself, and no employees were injured. The acetic acid unit
Japan
reportedly remained shut at the end of May, resulting in at least seven days lost production.
POLYVINYL ALCOHOL
With the global acetic acid balances already trending toward the tight side of balanced for the rest of
2007, acetic acid market participants were increasingly concerned about the outlook for the rest of the
ACETIC ANHYDRIDE year. If the Clear Lake plant restart is delayed into June, for example, then Celanese and others could
United States scramble to build adequate inventories ahead of an already packed turnaround schedule in the second
half of 2007.
West Europe

Economic news While much of the news was generated from the supply side, US market sources reported steady, but not
spectacular, demand from various derivative markets. US acetic acid producers also reported receiving
inquiries for spot volumes in mid-May from not only their usual customers but from other buyers and traders.
company news Most suppliers pulled back from the market and did not offer significant spot volumes due to lack of
available material in their own systems.
Access Tecnon
orbichem online UNITED STATES ACETIC ACID IMPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons
Others 23 1,745 28 62
Total 23 28 62
$/ton figures are calculated from customs data and may not reflect market prices

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
UNITED STATES ACETIC ACID EXPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
PRICE MONITOR Tons $/Ton Tons Tons
Canada 2,204 870 5,421 8,093
Mexico 17,050 808 44,517 58,048
FEEDSTOCKS Argentina - - 1,800 2,108
Brazil 8,844 501 14,295 21,374
Methanol
Colombia 2,309 680 2,309 2,641
Ethlylene Honduras 101 899 193 -
Venezuela 150 750 150 14
ACETIC ACID Belgium 19,042 477 36,996 26,756
Italy 983 590 983 3,837
United States Netherlands 1,080 590 5,561 6,239
Europe Spain 11,678 476 32,504 23,413
Nigeria 103 3,316 103 -
China South Africa 1,574 630 1,574 1,001
Asia China 7,025 464 10,588 12,511
South Korea 1 2,936 1 18,191
Japan Taiwan 2,003 433 4,107 2,626
Japan - - 2 2,499
Consumption and Production
Others 217 2,146 302 129
Total 74,364 161,406 189,480
VINYL ACETATE MONOMER $/ton figures are calculated from customs data and may not reflect market prices
United States
West Europe
Both Eastman and BP announced 2 c/lb increases for acetic acid, effective 1 June, for North America, or
China
$44/ton for Central and South America. Celanese issued $50/ton increase (essentially 2.25 c/lb) in the
Asia Americas, effective 1 May, on 26 April (as reported in the 1 May newsletter). There was no consensus
Japan heard in late May regarding a contract settlement due to the recent nature of the price increases.
Consumption and Production
Initially, many market sources said the May price increase was an effort to keep prices stable through the
ETHYL ACETATE quarter, offsetting sharp decreases in methanol seen at the start of the quarter. But with additional pressure
coming from the supply side, acetic acid buyers are looking at paying higher prices for any incremental
United States
purchases. If consumers were waiting until the end of May to finalise quarterly contracts, perhaps thinking
West Europe that prices would continue falling during the quarter, then they are likely seeing higher prices than they
China expected. Market participants also anticipated the likelihood of further price increase in the third quarter.
Asia
Japan US, WEST EUROPEAN AND TAIWANESE
ACETIC ACID PRICES
POLYVINYL ALCOHOL US Dollars per Ton
1500
US Domestic
FOB
ACETIC ANHYDRIDE WE Contract
1250
United States DEL
TW Import
West Europe CIF
1000

Economic news
750

company news
500

Access Tecnon
orbichem online 250

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Tecnon OrbiChem

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE Europe

PRICE MONITOR Acetic acid market conditions in Europe were not completely dissimilar to those experienced in other global
regions – tightly balanced supplies and steady demand – but pressure from feedstock methanol helped
drive Q2 2007 acetic acid contracts lower.
FEEDSTOCKS
Methanol Market participants confirmed in mid-May that Q2 contracts fell by an average of Euro15-20/ton compared
Ethlylene to Q1. Producers acknowledged the price decreases were inevitable given the massive decrease in
methanol contract prices at the beginning of the quarter. Those prices settled at Euro250/ton fob, down
ACETIC ACID by Euro170/ton, or 40.5%, from Q1. As mentioned in the feedstock section, spot methanol offers in
Europe were lower still at Euro175/ton fob. Market participants did not want to speculate on the possible
United States
direction of the Q3 methanol contract, but said acetic acid prices would likely be influenced much more by
Europe supply/demand concerns rather than feedstock in the coming months.
China
Asia Questions about the status of Celanese’s plants at Clear Lake and Pampa, Texas, (as discussed above)
loomed large at the end of May. Directly after the force majeure declaration was issued, some European
Japan
market sources expressed doubt that it would have lingering impact – especially if the Clear Lake plant
Consumption and Production restarted at the end of May as expected. But, the longer both plants are shut, the more likely it is that the
European market will feel an impact as import volumes become less available.
VINYL ACETATE MONOMER
United States Serbia’s MSK Kikinda was scheduled to restart from a scheduled turnaround at the end of May, but no
West Europe confirmation was received prior to publication. The 100,000 tpa plant has been down during most of May
after the company reportedly moved a scheduled turnaround forward from Q3.
China
Asia The 160,000 tpa Azot Nevinnomyssk acetic acid plant in Russia reportedly will be shut for a maintenance
Japan turnaround in June, but the duration of the outage was not confirmed. The plant is owned by EuroChem.
Consumption and Production
BP will move its global acetyls headquarters from Sunbury, just outside London, to China, a company
ETHYL ACETATE spokesman confirmed in late May. According to the company spokesman, about seven to eight key staff
member will move to Shanghai, although no timeframe was discussed. BP is the second major global
United States
acetyls producer to announce such a move in the past six months. In December 2006, Celanese said it
West Europe would move its acetyls management staff to Shanghai by the end of the first half of 2007.
China
Asia China
Japan
The usual supplies of imported acetic acid already were considered tight at the beginning of May, and the
unplanned shutdown of the Celanese plant at Clear Lake, Texas, and subsequent force majeure has made
POLYVINYL ALCOHOL
supplies even tighter.

ACETIC ANHYDRIDE At the end of May, it is understood there were very few cargoes available for sale in Jiangsu and Zhejiang, East
United States China. In early May, import prices had risen to $690/ton cfr China Main Port, and increased further to $700-
710/ton at the end of May. There were even quotes of $750/ton cfr China Main Port at the end of May.
West Europe

Economic news It is understood that a cargo of 4,000 tons from Iran due to arrive in Jiangyin at the end of May was
ordered at $610/ton cfr China Main Port in early April. At the end of May, export offers from East China

company news
CHINESE ACETIC ACID EXPORTS
March 2007 Jan-Mar 07 Jan-Mar 06
Access Tecnon Tons $/Ton Tons Tons

orbichem online Egypt 105 705 105 -

India 8,396 490 8,456 -
Pakistan 147 715 294 42
Thailand - - 16 1,955
North Korea 262 779 444 502
Taiwan - - 17 2,006
Others 88 922 1,137 1,468
Total 8,998 10,469 5,973
$/ton figures are calculated from customs data and may not reflect market prices

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
CHINESE ACETIC ACID EXPORTS
(1,000 Metric Tons)
PRICE MONITOR Month 2005 2006 2007 2006 2007
$/ton $/ton
Jan 2.3 0.6 0.7 788 870
FEEDSTOCKS Feb 0.2 2.5 0.8 606 898
Methanol Mar 3.6 2.8 9.0 609 509
Apr 3.3 2.2 - 602 -
Ethlylene May 3.3 1.1 - 767 -
Jun 0.3 9.9 - 551 -
ACETIC ACID Jul 0.4 1.6 - 656 -
Aug 0.4 0.7 - 766 -
United States
Sep 2.2 0.8 - 741 -
Europe Oct 8.1 0.8 - 765 -
Nov 0.3 0.6 - 801 -
China Dec 11.3 5.2 - 575 -
Asia Jan-Mar 6.1 6.0 10.5 626 562
Japan % Change 515.4 (2.2) 75.3 (27.2) (10.2)

Consumption and Production Jan-Dec 35.6 28.8

% Change 108.6 (19.1)

VINYL ACETATE MONOMER $/ton figures are calculated from customs data and may not reflect market prices

United States
West Europe
China CHINESE ACETIC ACID IMPORTS
Asia March 2007 Jan-Mar 07 Jan-Mar 06
Tons $/Ton Tons Tons
Japan
United States 3,567 511 9,096 14,278
Consumption and Production Malaysia 21,982 593 42,494 5,012
Singapore 28,360 589 77,356 78,508
South Korea 7,177 592 23,185 13,003
ETHYL ACETATE
Taiwan 3,403 605 13,146 3,631
United States Japan 1,916 590 1,917 1,755
Others 20 1,224 49 139
West Europe
Total 66,425 167,243 116,326
China $/ton figures are calculated from customs data and may not reflect market prices

Asia
Japan
CHINESE ACETIC ACID IMPORTS
POLYVINYL ALCOHOL (1,000 Metric Tons)
Month 2005 2006 2007 2006 2007
$/ton $/ton
ACETIC ANHYDRIDE
Jan 36.9 49.4 56.9 534 526
United States Feb 34.7 27.2 43.9 537 585
Mar 47.9 39.7 66.4 544 588
West Europe
Apr 44.2 59.5 - 512 -
May 52.8 52.9 - 491 -
Economic news Jun 48.7 65.3 - 515 -
Jul 43.8 64.9 - 523 -
Aug 54.8 102.7 - 496 -
company news Sep 53.1 66.4 - 486 -
Oct 29.8 60.3 - 491 -
Nov 44.6 63.1 - 521 -
Access Tecnon Dec 51.7 55.9 - 517 -

orbichem online Jan-Mar 119.5 116.3 167.2 538 566

% Change (25.1) (2.6) 43.8 (16.8) 5.2
Jan-Dec 542.9 707.3
% Change 3.3 30.3
$/ton figures are calculated from customs data and may not reflect market prices

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE were quoted at $620/ton fob China Main Port, an increase of $10-20/ton from last month. Offers to India
were quoted at $590/ton fob China Main Port. Domestic Chinese producers reportedly would prefer to sell
PRICE MONITOR inside China rather than export at current domestic prices.

Domestic prices have increased in East and South China at the end of May compared to that of April. In
FEEDSTOCKS the final week of May, acetic acid prices were quoted at Rmb6900/ton ex-tank in Jiangsu (Jiangyin and
Methanol Nantong), and Rmb7000-7100/ton ex-tank in Zhejiang (Ningbo); prices in South China were quoted
Ethlylene at Rmb7200-7300/ton ex-tank. Market prices in North China have increased to Rmb6800-6900/ton.
Market prices in Northeast China have increased to Rmb7100/ton.
ACETIC ACID
Ex-works offers at the end of May were at Rmb6800/ton from Jiangsu Sopo, Rmb6900/ton from Shanghai
United States
Wujing, Rmb6700/ton from Yankuang Cathay, Rmb7000/ton from Ji’an Shenghua, and Rmb7100/ton
Europe Jilin Petrochemical.
China
Asia TAIWANESE ACETIC ACID EXPORTS
Japan February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons
Consumption and Production
Australia 200 725 442 132
Bangladesh 107 847 281 101
VINYL ACETATE MONOMER Indonesia 178 811 259 121
United States Pakistan 181 709 403 302
China 7,488 542 14,660 2,195
West Europe Hong Kong 101 741 302 304
China Others 367 769 1,158 952
Total 8,622 17,505 4,107
Asia
$/ton figures are calculated from customs data and may not reflect market prices
Japan
Consumption and Production
TAIWANESE ACETIC ACID EXPORTS
ETHYL ACETATE (1,000 Metric Tons)
United States Month 2005 2006 2007 2006 2007
$/ton $/ton
West Europe
Jan 1.0 3.1 8.9 628 536
China Feb 2.9 1.0 8.6 784 571
Asia Mar 5.2 2.6 - 692 -
Apr 3.3 2.6 - 693 -
Japan May 5.8 7.7 - 564 -
Jun 6.7 11.2 - 531 -
POLYVINYL ALCOHOL Jul 4.0 11.5 - 540 -
Aug 4.2 14.9 - 502 -
Sep 3.5 12.8 - 540 -
ACETIC ANHYDRIDE Oct 5.6 5.9 - 552 -
Nov 2.7 17.8 - 516 -
United States Dec 2.4 11.0 - 538 -
West Europe Jan-Feb 3.8 4.1 17.5 666 553
% Change (2.2) 7.3 326.3 (5.8) (17.0)
Economic news Jan-Dec 47.1 102.1
% Change 109.1 116.6
$/ton figures are calculated from customs data and may not reflect market prices
company news

TAIWANESE ACETIC ACID IMPORTS

Access Tecnon February 2007 Jan-Feb 07 Jan-Feb 06
orbichem online Tons $/Ton Tons Tons
United States 9,445 469 9,445 11,436
Malaysia 17,205 474 17,205 36,771
Singapore 1,004 500 4,432 8,123
China 17 1,122 17 3,961
Japan 34 1,251 1,081 1,385
Others 22 1,206 22 62
Total 27,727 32,202 61,738
$/ton figures are calculated from customs data and may not reflect market prices

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
TAIWANESE ACETIC ACID IMPORTS
(1,000 Metric Tons)
PRICE MONITOR Month 2005 2006 2007 2006 2007
$/ton $/ton
Jan 29.3 29.0 4.5 427 525
FEEDSTOCKS Feb 11.7 32.7 27.7 431 475
Methanol Mar 31.5 2.8 - 629 -
Apr 19.1 43.7 - 475 -
Ethlylene May 21.7 17.0 - 488 -
Jun 27.6 30.8 - 470 -
ACETIC ACID Jul 24.9 12.2 - 491 -
Aug 18.2 20.9 - 478 -
United States
Sep 12.3 11.3 - 493 -
Europe Oct 31.6 12.1 - 487 -
Nov 37.8 3.2 - 578 -
China Dec 18.4 4.1 - 545 -
Asia Jan-Feb 41.0 61.7 32.2 429 482
Japan % Change (38.4) 50.7 (47.8) (15.0) 12.4

Consumption and Production Jan-Dec 283.8 219.8

% Change (13.9) (22.6)

VINYL ACETATE MONOMER $/ton figures are calculated from customs data and may not reflect market prices

United States Sopo has now indicated that the new 600,000 tpa plant will start up in the first half of 2009, and, in the
West Europe mean time, a new facility is being built to produce carbon monoxide from coal. Praxair will build an air
separation facility, supplying oxygen. At the end of June, Jiangsu Sopo will have a planned maintenance
China
shutdown of the 250,000 tpa line for 10-12 days, and the 350,000 tpa line for 15 days. The 350,000
Asia tpa line will then be debottlenecked to 400,000 tpa, raising its total capacity to 650,000 tpa.
Japan
Consumption and Production Sopo has indicated that they might delay the turnarounds for a month, but that is not decided yet. It is understood
that Sopo exports acetic acid under certain contracts in the range of 3,500-4,500 tpm, depending on the market
ETHYL ACETATE condition. They have exported 4,000 tons in May. Sopo sources methanol internationally.
United States
Shanghai Wujing has been operating the 230,000 tpa plant at 50-67% since early May due to engineering
West Europe works at the CO facility of Shanghai Coking. The CO facility is being debottlenecked for the new 300,000
China tpa acetic acid plant. It is expected that the 230,000 tpa plant will return to full operations rate in early June
Asia when the engineering works are completed.
Japan
Shanghai Wujing has now confirmed that it will shut down the old 230,000 tpa plant when it starts
production at its new 300,000 tpa facility at the end of June. Shanghai Coking produces coal-based
POLYVINYL ALCOHOL
methanol in Shanghai with a capacity of 350,000 tpa. They currently supply 9,000 tpm methanol to
Shanghai Wujing. They will start up a new methanol plant with a capacity of 450,000 tpa at the end of
ACETIC ANHYDRIDE 2007. They are also going to add another carbon monoxide production unit and a new pipeline for the
United States new acetic acid capacity in 2008 or thereafter. Shanghai Wujing would then bring its total acid capacity
to 530,000 tpa. Shanghai Wujing and Shanghai Coking both belong to Shanghai Huayi.
West Europe

Economic news Yaraco restarted its 400,000 tpa plant in Chongqing on 21 May, after a 10-day shutdown which is mainly
due to short gas supplies. Yuhuai railway was open on 18 April for passengers, and it is expected that it
will be available for freight at the end of 2007.
company news
Celanese has been trying to start up its new 600,000 tpa plant at Nanjing since March, market participants
Access Tecnon said, and the last trial was on 18 May. It is understood that there were problems with carbon monoxide
supplies. Wison Nanjing Chemical Company supplies all the methanol and carbon monoxide they produce
orbichem online to Celanese as it has a 200,000 tpa methanol plant and a 300,000 tpa carbon monoxide plant at the
same site. Celanese has indicated that commercial product will be available from the plant in early June.

Yankuang Cathay shut down its 200,000 tpa plant on 26 May, for a planned maintenance of 10-20 days (longer
than earlier indication). It has indicated that the plant will be debottlenecked to 300,000 tpa at the end of 2007.

Daqing Petroleum Administration Bureau has now indicated that its new 200,000 tpa acetic acid facility
will be on stream at the end of July, later than expected. It is understood that the construction of the plant has

 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE almost been completed. PetroChina will have a final check in July before it starts production. The company
is considering plans to double capacity at the site within the next 2-5 years, and may also build a 300,000
PRICE MONITOR tpa VAM facility once it has expanded its acid capacity.

Henan Lantian Group, a methanol producer based in Zhumadian, Henan Province, has planned to build
FEEDSTOCKS a 200,000 tpa acetic acid plant. It is understood that they are waiting for government approval, and are
Methanol expecting to get the approval in 2008.
Ethlylene
Guizhou Crystal has indicated it will start up the new 36,000 tpa acetic acid plant at the end of 2007, and
ACETIC ACID will import equipment starting in August. Chiyoda will provide its new Acetica technology to the plant. The
plant will be linked to VAM and PVOH production. Currently, Guizhou Crystal produces VAM at 45,000
United States
tpa and PVOH at 30,000 tpa. VAM and PVOH capacities will be expanded to 70,000 tpa and 35,000
Europe tpa, respectively, when the new acetic acid plant comes on stream at the end of 2007. By then, they will
China have 23,400 tpa acetic acid, 7,000 tpa VAM and 35,000 tpa PVOH available. Market participants have
Asia said they believe 1 ton PVOH production co-produces 1.1 tons acetic acid from their plant.

Japan
Shandong Jinyimeng has clarified that its ethanol-based acetic acid capacity is at 110,000 tpa, a bit more
Consumption and Production than earlier indication of 100,000 tpa. Since the second half of April, they have been producing acetic acid at
80,000 tpa and acetaldehyde at 30,000 tpa. However, they are still buying acetic acid on the market, as acetic
VINYL ACETATE MONOMER acid is used for a 180,000 tpa ethyl acetate plant which will be expanded to 200,000 tpa in July, a 80,000 tpa
United States butyl acetate plant (they started up a new 80,000 tpa plant in April, and shut down the old 20,000 tpa at the
West Europe same time. The new 80,000 tpa plant has been operating at 70%). Shandong Jiyimeng expects to start up a
crop-based butanol plant in October, with a capacity of 30,000 tpa. It also expects to start up a new anhydride
China
plant at 50,000 tpa in October, which would be further expanded to 150,000 tpa in 2008.
Asia
Japan Ji’an Shenghua brought the second acetic acid line on stream on 15 May, raising its daily output to 400
Consumption and Production tpd. However, the whole acetic acid plant was shut down on 17/18 May due to maintenance and also
some environmental issues on the 400,000 tpa ethanol plant. The acetic acid plant is expected to restart
ETHYL ACETATE in early June. Ji’an Shenghua produces ethanol with a capacity of 600,000 tpa at two plants, one at
200,000 tpa and the other at 400,000 tpa. The ethanol is produced from maize. The company is also
United States
looking into the possibility of producing ethanol from sorghum.
West Europe
China Jilin Petrochemical has been running its 210,000 tpa ethylene-based acetic acid plant at 60-70%. The plant was
Asia shut down for maintenance on 22 May, and is expected to restart 3 June. Half of the acetic acid is used captively
to make acetic anhydride at 60,000 tpa. Anhydride production is still at full operations rate.
Japan
Yangzi Petrochemical restarted its ethylene-based acetic acid plant on 5 April, producing at 230 tpd.
POLYVINYL ALCOHOL
However, all the acid is used captively for its PTA production with a total capacity of 1.3 million tpa. It is
understood that the ethylene-based acetic acid plants of Shanghai Petrochemical and Daqing Petrochemical
ACETIC ANHYDRIDE are still being mothballed, although Shanghai Petrochemical is producing acetaldehyde.
United States
Asia
West Europe

Economic news Acetic acid prices in other parts of Asia strengthened again in early May as scheduled and unscheduled
outages tightened the regional supply balance, and then moved up further mid-month following the
Celanese news.
company news
Price ideas were reported at $680-700/ton cfr Northeast Asia and $670-680/ton cfr Southeast Asia at
Access Tecnon the time of writing on 25 May, but lack of availability was keeping markets quiet. A week earlier, deals
were reported done at $680/ton cfr Northeast Asia and $670/ton cfr Southeast Asia. These levels are
orbichem online $35-55/ton up from the $635-645/ton cfr Northeast Asia and $630-640/ton cfr Southeast Asia reported
done in the last week of April.

Indian prices have also strengthened further in the last month, but remain well below prevailing regional
levels despite the continuing unscheduled outage of the 150,000 tpa Fanavaran Petrochemical plant in
Iran. Enquiries from Indian buyers are understood to be capped at $620-630/ton cfr India in late May,
$10-20/ton higher than late-April bids. Latest indications as this newsletter was finalised were that the
Iranian plant was being restarted in late May.

10 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

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Front PAGE
SOUTH KOREAN ACETIC ACID IMPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
PRICE MONITOR Tons $/Ton Tons Tons
Malaysia 2,500 585 2,500 2,646
Singapore 300 620 3,300 2,482
FEEDSTOCKS Japan 2,500 564 5,403 2,903
Methanol Others 102 618 303 1,039
Total 5,402 11,506 9,070
Ethlylene $/ton figures are calculated from customs data and may not reflect market prices

ACETIC ACID
United States SOUTH KOREAN ACETIC ACID EXPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
Europe
Tons $/Ton Tons Tons
China Bangladesh 102 851 122 113
Asia Pakistan 20 774 20 2,021
Philippines 680 604 860 991
Japan China 8,150 523 13,855 7,026
Consumption and Production Taiwan - - 8 9,337
Japan 841 600 1,660 1,621
Others 103 820 222 180
VINYL ACETATE MONOMER Total 9,896 16,747 21,289
United States $/ton figures are calculated from customs data and may not reflect market prices

West Europe
China
As anticipated, the finely balanced supply situation across Asia is proving the decisive factor in the market
Asia in Q2 and this looks certain to continue through Q3. A heavy round of scheduled shutdowns will keep the
Japan supply side taut.
Consumption and Production
At the same time, continuing unscheduled shutdowns as well as uncertainties over the onstream timing of
ETHYL ACETATE substantial new Chinese capacities make the outlook difficult to forecast with certainty.
United States
Celanese is understood to have shut its 600,000 tpa plant in Singapore for four days in mid-May. BP
West Europe Petronas Acetyls shut its 550,000 tpa plant in Malaysia for four days in mid-April and a further four days
China in mid-May, also because of carbon monoxide supply problems.
Asia
Formosa BP has delayed the three-week turnaround at its 300,000 tpa plant in Taiwan to end-May to
Japan
enable it to manage high methanol inventories. Taiwan’s CPDC has confirmed it has also put back the 35-
day maintenance turnaround at its 140,000 tpa plant to 9 July because of a change in upstream shutdown
POLYVINYL ALCOHOL
dates by CPC. Celanese Singapore is expected to take a 25-day turnaround at its 600,000 tpa Singapore
plant from mid-July.
ACETIC ANHYDRIDE
United States In addition to these, maintenance shutdowns planned in Q2 and Q3 in China and Japan will further tighten
the regional balance (see China and Japan sections).
West Europe

Economic news At the same time, more than 1 million tpa of new capacity is expected on stream in the next two quarters in
China, as Celanese starts up its 600,000 tpa plant in Nanjing, Shanghai Wujing starts up its 300,000 tpa
expansion, and Daqing starts up its delayed 200,000 tpa plant (see China section). The timing of these
company news new starts will be crucial for what is now a finely balanced supply situation.

Access Tecnon The extent to which global suppy is tight is illustrated vividly by the steady increases in acetic acid pricing
in recent months, in stark contrast to continuing sharp reductions in methanol pricing. Asian spot methanol
orbichem online prices have slipped further in the last month, and were reported at $235-240/ton cfr Taiwan on 25 May,
down from $260-270/ton cfr Northeast Asia in late April. It is understood that Chinese methanol exports
have come to a halt in May, following five consecutive months in which volumes as high as 20,000-30,000
ton/month have been moved from the mainland.

The demand side of the equation is also a continuing source of uncertainty for acetic acid going forward.
PTA demand remains firm, but efforts to raise VAM prices have consistently failed in the last month, and
solvents markets are described as poor once again.

11 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

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Front PAGE The polyester sector has remained healthy for a further month in May, and PTA margins have continued
at acceptable levels following the stiff losses of Q4 2006 and Q1 2007. PTA spot prices were reported
PRICE MONITOR at $950-960/ton cfr China in the last week of May, up from $920-930/ton cfr China in the last week of
April. A series of scheduled shutdowns in Southeast Asia and India in the last month has kept supply firm
and supported sentiment in the sector.
FEEDSTOCKS
Methanol Increases in paraxylene (PX) prices in the last month appear to have lent support to stronger PTA numbers,
Ethlylene rather than eating into margins as was the case earlier in the year. However, markets had yet to react at the
time of writing to the nomination by leading producers for June PX contracts at $1290-1300/ton cfr Asia,
ACETIC ACID representing a $125/ton increase over May contract levels.

United States
Nonetheless, the major tranche of new Chinese PTA capacity brought on stream in recent months means an
Europe incremental increase in demand for acetic acid from the sector, regardless of the state of operating rates.
China
Asia However, VAM demand has weakened in the last month, and efforts to raise prices have failed despite a
series of shutdowns and cutbacks as well as the relentless cost push from both ethylene and acetic acid.
Japan
Prices have remained steady in both the regional and the Chinese domestic market in the last month.
Consumption and Production
At the time of writing, global and regional VAM producers were preparing to increase prices for June by
VINYL ACETATE MONOMER $100-150/ton, in the wake of the Celanese force majeure declaration. But the lack of responsiveness of
United States the sector to upstream cost increases in the last month has left many in the market perplexed.
West Europe
Solvents markets also have softened further because of high feedstock pricing and poor demand further
China
downstream. Chinese operating rates are reported at only 60-70% in late May.
Asia
Japan Ethyl acetate prices have moved up $70/ton in recent weeks with offers reported at $970-980/ton cfr
Consumption and Production Northeast/Southeast Asia on 25 May, reflecting higher feedstock prices, particularly naphtha. Chinese
exports were being offered at $850/ton fob China in the third week of May, up from $820/ton fob China
ETHYL ACETATE in April. Estimates of domestic demand for ethyl acetate range from 500,000 ton/year to 700-800,000
ton/year, while domestic production capacity is now assessed at more than 1m tpa, with a number of
United States
debottlenecks and capacity expansions planned.
West Europe
China Japan
Asia
The biggest topic in the acetic acid market in May was the outage of Celanese’s acetic acid plant in Clear
Japan
Lake, Texas in mid May and ensuing announcement of the force majeure throughout its acetyls chain at
50% allocation for two months. Asian acetic acid markets reacted to this immediately and spot offers
POLYVINYL ALCOHOL
jumped to over $700/ton cfr up to $710-720/ton cfr. However, actual transaction prices have not risen
so much, by only $20-30/ton as compared to prices before this event. Acetic acid consumers appear to
ACETIC ANHYDRIDE be unable to absorb such high prices. Actual spot prices are currently around $660-670/ton cfr in Asia,
United States although suppliers continue to offer higher prices such as $710-720/ton cfr.
West Europe
A majority of Q1 2007 PTA contracts reportedly settled at an increase of $25-30/ton compared to Q4
Economic news 2006. While information on the Q2 price is not available yet, acetic acid producers expect that the
contract price could be increased as supply of acetic acid in Q2 has been highly restricted due to unplanned
shutdowns and a number of planned shutdowns in Asia. In Japan, Kyodo Sakusan’s Aboshi plant will be
company news shut until mid-June.

Access Tecnon Japanese Supply of Acetic Acid

(tons)
orbichem online
Apr 07 % Change Jan-Apr 07 % Change
(06/05) (06/05)
Production 52,998 22.4 213,766 8.6
Shipment 45,180 0.5 181,367 4.5
Inventory 7,731 9.1 *** ***

12 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

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Front PAGE
JAPANESE ACETIC ACID IMPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
PRICE MONITOR Tons $/Ton Tons Tons
Malaysia 1,200 584 1,200 -
Singapore 1,047 579 2,096 1,050
FEEDSTOCKS South Korea 837 624 1,631 1,608
Others - - - 74
Methanol
Total 3,084 4,927 2,732
Ethlylene $/ton figures are calculated from customs data and may not reflect market prices

ACETIC ACID
United States JAPANESE ACETIC ACID EXPORTS
Europe February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons
China Indonesia 400 519 1,059 1,672
Asia Malaysia 2,002 488 2,002 -
Thailand 1,001 526 1,001 4,122
Japan China 1,002 507 1,002 3
Consumption and Production South Korea 2,500 547 5,002 2,202
Taiwan 1,051 541 1,117 1,353
Others 10 2,058 40 27
VINYL ACETATE MONOMER
Total 7,966 11,223 9,379
United States $/ton figures are calculated from customs data and may not reflect market prices

West Europe
China
Consumption and Production
Asia
Japan Plant outages around the world are believed to include those in the following table. They are not necessarily
Consumption and Production confirmed or otherwise by the producers concerned.

ETHYL ACETATE Company/Plant Period Length Capacity Lost

(days) (000 tons)
United States
2007
West Europe CPDC, Taiwan Dec/January 35 14
China Formosa BP January 3 2
Asia Yankuang Cathay, China January 5 2
Celanese, Singapore Q3 14-21 24-36
Japan
Samsung BP April 7 9-10
Kikinda, Serbia Apr-May 45-60 12
POLYVINYL ALCOHOL
GNVF, India H1 April 5 2
Fanavaran, Iran mid April N.A. N.A.
ACETIC ANHYDRIDE Samsung BP, Ulsan, SK April 7 8-9
United States Formosa BP, Taiwan mid-May 21 17
Celanese, Clear Lake, US H1 May 20 N.A.
West Europe
Celanese, Pampa, US late May 7-8 N.A.
Economic news CPDC, Taiwan mid-June 35 13
Jiangsu Sopo, China end June 10-12 7-8
Jiangsu Sopo, China end June 15 14
company news Yankuang Cathay, China end May 7 6
Kyodo Sakusan, Japan mid May 35 40
Access Tecnon Celanese Singapore Q3 25 42
Celanese, Clear Lake, US Q3 N.A. N.A.
orbichem online Celanese, Pampa, US Q3 N.A. N.A.
Celanese, Calvert City, US Q3 N.A. N.A.
Millennium, US October 31 46
Daicel, Ohthake October N.A. N.A.

13 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE VINYL ACETATE MONOMER

PRICE MONITOR United States

The force majeure declaration on acetic acid made by Celanese on 14 May had an immediate impact on
FEEDSTOCKS the vinyl acetate monomer market. Celanese placed its global VAM customers on 50% allocation for up
Methanol to 60 days, although it is understood that allocation levels will be re-evaluated once the acetic acid plant
Ethlylene is restarted and running normally. However, as discussed in the acetic acid section, the Clear Lake plant
was not operational at the time of publication. Also, Celanese is waiting to restart its Pampa, Texas, plant,
ACETIC ACID which was taken off-line 24 May following a fire at an associated utility plant on site.

United States
Celanese has a 310,000 tpa VAM plant at the integrated Clear Lake site, as well as a 300,000 tpa plant
Europe at Bay City, Texas, which is 75 miles south of Clear Lake. Celanese also operates a 115,000 tpa VAM
China plant at Cangrejera, Mexico, and is the largest marketer of VAM into South America, according to market
Asia sources.

Japan
The primary concern facing VAM market participants is the duration of the force majeure and associated
Consumption and Production allocation. Although there was no damage to the VAM plant at Clear Lake, any delay in restarting the
acetic acid unit would start having a trickle-down effect into the derivatives markets. One VAM consumer
VINYL ACETATE MONOMER said that it had not noticed any difficulty sourcing product in the first days following the allocation, but said
United States
West Europe UNITED STATES VAM IMPORTS
China February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons
Asia
Mexico - - 250 2,920
Japan Taiwan - - - 11,124
Consumption and Production Others 34 1,430 34 44
Total 34 284 14,088
$/ton figures are calculated from customs data and may not reflect market prices
ETHYL ACETATE
United States
West Europe
UNITED STATES VAM EXPORTS
China
February 2007 Jan-Feb 07 Jan-Feb 06
Asia Tons $/Ton Tons Tons
Japan Canada 4,958 1,034 10,370 12,027
Mexico 1,700 913 3,240 2,332
Argentina 939 954 939 300
POLYVINYL ALCOHOL
Brazil 1,258 692 1,886 1,852
Chile 577 964 1,297 2,032
Colombia 1,109 1,041 3,122 2,247
ACETIC ANHYDRIDE
Costa Rica 158 1,033 297 157
United States Ecuador 209 1,080 209 164
Peru 289 1,091 1,603 972
West Europe
Venezuela 1,276 1,016 1,888 1,433
Belgium 3,498 842 7,074 1,499
Economic news Germany 3,089 950 3,089 -
Italy 435 1,016 435 4,061
Netherlands - - 4,598 6,296
company news United Kingdom - - - 1,045
Egypt - - - 1,000
Jordan - - - 1,200
Access Tecnon Saudi Arabia - - - 1,000
Turkey 2,069 985 2,069 4,194
orbichem online
UAE 1,996 1,038 2,745 2,381
New Zealand 248 931 248 -
Singapore 1,078 830 2,095 -
China 2,455 793 5,714 44
South Korea 1,000 856 1,000 5,235
Others 50 1,487 1,152 485
Total 28,391 55,070 51,956
$/ton figures are calculated from customs data and may not reflect market prices

14 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

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Front PAGE that could change if the plant outages last for any length of time. Another VAM market participant said it
did not believe there would be any net effect to the market as a result of the allocation levels.
PRICE MONITOR
Market participants did not agree completely on the status of demand in the US market. While no one
necessarily spoke of demand as strong, some sources characterized demand as steady. However, with
FEEDSTOCKS the downturn in the US housing market deepening, one source said it believed demand for VAM in paint
Methanol formulations was suffering.
Ethlylene
On 24 May, Dow issued a price increase of 6 c/lb ($132.28/ton) in the US and Canada, and $150/
ACETIC ACID ton in Latin America, with immediate effect or “as otherwise allowed by individual contract terms.” The
amount of the increase was what caught the eye of most market sources, not necessarily the fact that a price
United States
increase had been issued. Most market participants said they did not think the increases had much chance
Europe of sticking in Q2, but agreed producers might find more support for price hikes in July.
China
Asia West Europe
Japan
As with acetic acid, European vinyl acetate monomer market participants were particularly interested in
Consumption and Production the status of Celanese’s US acetyls production at the end of May. But, there was a general wait-and-see
approach taken since the situation still was developing.
VINYL ACETATE MONOMER
United States Market participants did not agree with regard to the overall impact of the Celanese allocations. Talk was
West Europe heard that there were no supply disruptions in Europe as a result of the announced VAM allocation levels.
Import/export statistics were not available yet for the month of May, but it is likely that contract volumes
China
were shipped prior to the plant outage at Clear Lake. However, another supplier said it began receiving
Asia inquiries from outside its usual customer base almost immediately upon hearing about the allocations.
Japan
Consumption and Production On 24 May, Dow issued a price increase of Euro110/ton in Europe, and $150/ton in the Middle East/
Africa, with immediate effect or “as otherwise allowed by individual contract terms.” In contrast, market
ETHYL ACETATE participants said in mid-May they expected Q2 European contract prices to decrease by as much as
Euro25-30/ton compared to Q1. Final contract settlements are not expected until early June.
United States
West Europe BP reported that its VAM plant at Hull, UK, is operating at normal rates following an unplanned outage that
China lasted from mid-April until early May.
Asia
China
Japan
Chinese domestic vinyl acetate monomer prices increased in the final week of May compared to that of
POLYVINYL ALCOHOL
April due to short domestic supplies and increases of acetic acid prices. Two main domestic suppliers of
VAM, Shanghai Petrochemical and Sichuan Vinylon Works, have been shut down for maintenance in
ACETIC ANHYDRIDE May.
United States
In the final week of May, prices in East China increased to Rmb10,200/ton ex-tank; prices in South China
West Europe
increased to Rmb10,300/ton ex-tank; market prices in North China increased to Rmb10,000-10,200/ton.
Economic news Import prices have increased to $1040-1050/ton cfr China Main Port, and there were few cargoes at the
ports available for sale.

company news Beijing Organic has still been operating at 80%, and will have a planned shutdown in July/August to
change catalysts. It is planning a second 100,000 tpa VAM plant at Yanshan, Hebei Province, with
Access Tecnon construction beginning in 2008. The original 100,000 tpa plant will be shut down at the end of 2007 or
Q1 2008, and moved to Yanshan, Hebei Province in 2008 because of the Beijing Olympics.
orbichem online
Shanghai Petrochemical reportedly shut its 120,000 tpa VAM plant in mid-May for a three-week planned
maintenance. VAM from the 20,000 tpa line is marketed in East China, while 80-90% of the output from
the 100,000 tpa line is used captively.

Sichuan Vinylon Works shut its 200,000 tpa VAM plant, linked The VAM plant was shut down on 30 April
for a one-month maintenance, and is expected to restart in early June. Sichuan Vinylon Works reportedly
will add a new 300,000 tpa VAM plant and a new 60,000-80,000 tpa PVOH plant in 2009.

15 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

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Front PAGE
CHINESE VAM EXPORTS
March 2007 Jan-Mar 07 Jan-Mar 06
PRICE MONITOR Tons $/Ton Tons Tons
Others 74 1,018 123 56
Total 74 123 56
FEEDSTOCKS
$/ton figures are calculated from customs data and may not reflect market prices
Methanol
Ethlylene CHINESE VAM EXPORTS
(1,000 Metric Tons)
ACETIC ACID Month 2005 2006 2007 2006 2007
United States $/ton $/ton
Jan 0.1 - - 1,020 1,276
Europe Feb - - - 875 1,144
China Mar 0.3 - 0.1 956 1,022
Apr 0.2 - - 1,072 -
Asia May 0.1 - - 1,070 -
Japan Jun 0.2 - - 1,759 -
Jul 0.2 - - 1,204 -
Consumption and Production Aug 0.1 - - 1,266 -
Sep - - - 1,454 -
VINYL ACETATE MONOMER Oct - - - 1,607 -
Nov - - - 1,132 -
United States
Dec - - - 1,922 -
West Europe Jan-Mar 0.4 0.1 0.1 925 1,094
China % Change (66.1) (85.9) 119.1 (7.1) 18.3

Asia Jan-Dec 1.3 0.3

% Change (54.2) (75.0)
Japan
$/ton figures are calculated from customs data and may not reflect market prices
Consumption and Production
CHINESE VAM IMPORTS
ETHYL ACETATE March 2007 Jan-Mar 07 Jan-Mar 06
United States Tons $/Ton Tons Tons

West Europe United States 3,309 963 5,266 988

Singapore 3,395 999 15,437 18,182
China South Korea 1,001 897 3,302 4,170
Taiwan 8,058 984 28,352 13,143
Asia
Japan 5,481 991 16,604 10,829
Japan Others - - - 10
Total 21,244 68,961 47,322
POLYVINYL ALCOHOL $/ton figures are calculated from customs data and may not reflect market prices

ACETIC ANHYDRIDE
CHINESE VAM IMPORTS
United States (1,000 Metric Tons)
West Europe Month 2005 2006 2007 2006 2007
$/ton $/ton
Economic news Jan 7.7 12.9 27.1 836 953
Feb 8.4 13.0 20.6 837 962
Mar 15.7 21.4 21.2 905 981
company news Apr 14.3 13.1 - 936 -
May 12.0 16.7 - 918 -
Jun 14.4 22.8 - 922 -
Access Tecnon Jul 10.5 13.8 - 925 -
Aug 11.8 22.7 - 935 -
orbichem online Sep 17.3 20.1 - 934 -
Oct 14.5 19.0 - 949 -
Nov 9.9 20.9 - 959 -
Dec 16.1 18.5 - 953 -

Jan-Mar 31.8 47.3 69.0 867 964

% Change (38.7) 48.7 45.7 (10.3) 11.2
Jan-Dec 152.5 214.9
% Change 3.6 40.9
$/ton figures are calculated from customs data and may not reflect market prices

16 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
TAIWANESE VAM EXPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
PRICE MONITOR Tons $/Ton Tons Tons
United States - - - 14,300
Belgium 3,000 947 9,500 6,340
FEEDSTOCKS Egypt 1,590 925 1,590 365
Saudi Arabia 1,061 951 1,471 644
Methanol
UAE 1,000 914 1,000 106
Ethlylene Bangladesh 167 1,042 304 48
Malaysia - - 3,070 4,695
ACETIC ACID Pakistan 380 1,029 836 1,030
Thailand 800 912 800 400
United States China 9,450 919 22,735 3,938
Europe Others 30 1,241 1,122 345
Total 17,478 42,428 32,211
China $/ton figures are calculated from customs data and may not reflect market prices
Asia
Japan
TAIWANESE VAM EXPORTS
Consumption and Production
(1,000 Metric Tons)
Month 2005 2006 2007 2006 2007
VINYL ACETATE MONOMER
$/ton $/ton
United States Jan 3.3 13.9 24.9 864 912
West Europe Feb 3.1 18.3 17.5 839 930
Mar 0.3 18.3 - 871 -
China Apr 5.7 9.0 - 907 -
Asia May 1.9 19.2 - 890 -
Jun 0.2 10.9 - 883 -
Japan Jul 0.1 7.9 - 919 -
Consumption and Production Aug 3.1 20.3 - 886 -
Sep 4.8 19.7 - 912 -
Oct 3.4 7.7 - 941 -
ETHYL ACETATE Nov 7.9 12.9 - 954 -
United States Dec 8.5 10.1 - 944 -

West Europe Jan-Feb 6.3 32.2 42.4 850 919

% Change (65.6) 408.2 31.7 (1.2) 8.1
China
Jan-Dec 42.3 168.1
Asia % Change (29.2) 297.0
Japan $/ton figures are calculated from customs data and may not reflect market prices

POLYVINYL ALCOHOL
TAIWANESE VAM IMPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
ACETIC ANHYDRIDE
Tons $/Ton Tons Tons
United States Singapore 160 1,009 510 531
West Europe Japan 458 972 468 572
Total 618 978 1,103
$/ton figures are calculated from customs data and may not reflect market prices
Economic news

company news Anhui Wanwei has a 90,000 tpa VAM plant and a 80,000 tpa PVOH plant. It is understood that it has
plans to add a new PVOH line with a capacity of 100,000 tpa.
Access Tecnon
Currently, Guizhou Crystal produces VAM at 45,000 tpa and PVOH at 30,000 tpa. VAM and PVOH
orbichem online capacities will be expanded to 70,000 tpa and 35,000 tpa, respectively, when the new 36,000 tpa acetic
acid plant comes on stream at the end of 2007. By then, they will have 23,400 tpa acetic acid, 7,000
tpa VAM and 35,000 tpa PVOH available. It is understood that 1 ton PVOH production co-produces 1.1
tons acetic acid from their plant.

It is understood that Jiangsu Sopo is planning a VAM project with a capacity of 300,000 tpa, and also a
monochloracetic acid project with a capacity of 40,000 tpa.

17 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
TAIWANESE VAM IMPORTS
(1,000 Metric Tons)
PRICE MONITOR Month 2005 2006 2007 2006 2007
$/ton $/ton
Jan 1.0 0.1 0.4 1,096 1,027
FEEDSTOCKS Feb 0.9 1.0 0.6 922 981
Methanol Mar 0.4 1.2 - 914 -
Apr 0.5 0.5 - 973 -
Ethlylene May 1.3 0.5 - 964 -
Jun 3.5 0.6 - 973 -
ACETIC ACID Jul 0.4 1.2 - 979 -
Aug 2.3 1.4 - 970 -
United States
Sep 0.9 1.0 - 971 -
Europe Oct 0.7 0.7 - 973 -
Nov 0.8 1.5 - 996 -
China
Dec 0.8 0.4 - 1,054 -
Asia Jan-Feb 1.8 1.1 1.0 940 998
Japan % Change 18.5 (40.0) (11.4) (8.7) 6.2

Consumption and Production Jan-Dec 13.3 10.2

% Change 54.4 (23.7)

VINYL ACETATE MONOMER $/ton figures are calculated from customs data and may not reflect market prices

United States
West Europe SOUTH KOREAN VAM EXPORTS
China February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons
Asia
Indonesia 700 869 700 1,981
Japan Singapore 275 869 275 700
Thailand 1,288 850 1,288 580
Consumption and Production
China 1,000 829 2,601 3,617
Japan - - - 2,001
ETHYL ACETATE Others - - 900 601
United States Total 3,263 5,764 9,480
$/ton figures are calculated from customs data and may not reflect market prices
West Europe
China
Asia SOUTH KOREAN VAM IMPORTS
Japan February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons

POLYVINYL ALCOHOL United States 400 1,080 400 -

Singapore 1,258 1,036 2,832 2,873
Japan 396 1,025 696 388
ACETIC ANHYDRIDE Total 2,054 3,928 3,261
$/ton figures are calculated from customs data and may not reflect market prices
United States
West Europe

Economic news Wujing is understood to be planning VAM production with a capacity of 200 ktpa, possibly with ethylene
imported from Shanghai Jinshan Petrochemical in the Shanghai Chemical Industry Park (SCIP) via
pipeline.
company news
No outcome has been heard on the Yankuang Cathay (Lunan) negotiations to secure technology for a
Access Tecnon planned VAM project.

orbichem online Asia

Asian vinyl acetate monomer (VAM) prices have held steady in the last month despite continuing efforts by
producers to achieve increases in line with higher feedstock costs.

Deals were reported done in mid-to-late May at $1020-1030/ton cfr Northeast Asia and $10-20 higher
in Southeast Asia.

18 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE Chinese domestic prices have also remained steady, reported at Rmb9700-9800/ton ex-tank in East China
and Rmb9600-9800/ton ex-tank in South China on 25 May.
PRICE MONITOR
However, producers have indicated that June offers will be raised significantly, following the force majeure
declared on supplies from Celanese at Clear Lake. Hikes of $100-150/ton for Asian shipments have been
FEEDSTOCKS indicated in separate announcements by global players. Asian producers are expecting to raise offers to
Methanol $1100-1150/ton cfr Northeast/Southeast Asia.
Ethlylene
Dairen is understood to be running its 650,000 tpa capacity at Mailiao, Taiwan, at around 50% operating
ACETIC ACID rates, down from close to full capacity a month ago. It is thought to have cut back because of tight acetic
acid availability, though it is not the only VAM producer to have reduced operating rates in the last month.
United States
Dairen sources acetic acid from the 300,000 tpa Formosa BP plant at Mailiao, Taiwan, which will shut
Europe down for maintenance at end-May.
China
Asia Asian Acetyls’ 170,000 tpa plant at Ulsan, South Korea, reportedly shut in May for a maintenance outage,
but full details were not available.
Japan
Consumption and Production Japan

VINYL ACETATE MONOMER Despite the disruption in VAM supply by Celanese due to outage of its acetic acid plant at Clear Lake,
United States Texas, and ensuing price increase announcements, VAM prices in Asia have not vividly reacted to these
West Europe events so far, although certainly on a firming trend in prices.
China
VAM prices at the end of May were reported at around $1050/ton cfr throughout Asia. This may imply that VAM is
Asia amply available so far in Asia and users do not feel the necessity to procure VAM at a higher prices in the short-term.
Japan However, Japanese VAM producers expect that VAM prices in Asia could continue an upward trend as many Asian
Consumption and Production VAM plants will be shut down for maintenance in Q2 and higher ethylene costs could continue further.

ETHYL ACETATE Among the scheduled maintenance outages in Japan include Denki Kagaku (60,000 tpa) for two weeks
from mid June, and JVP (150,000 tpa) for 10 days starting in early July.
United States
West Europe VAM demand in Asia is told to be healthy now because PVOH demand is apparently very good this year
China and other general outlets of VAM (emulsion, EVA, etc.) are also good.
Asia
In the domestic Japanese market, all VAM merchant suppliers have been trying to increase VAM prices by Yen
Japan
8-10/kg (roughly $66-83/ton). While these price increases seem to be accepted, cost increases are far sharper
than producers expected and VAM producers will be forced to try another round of price increases.
POLYVINYL ALCOHOL

JAPANESE VAM IMPORTS

ACETIC ANHYDRIDE
February 2007 Jan-Feb 07 Jan-Feb 06
United States Tons $/Ton Tons Tons

West Europe Others - - - 999

Total - - 999

Economic news $/ton figures are calculated from customs data and may not reflect market prices

company news
JAPANESE VAM EXPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
Access Tecnon Tons $/Ton Tons Tons
Indonesia 1,927 923 2,966 1,486
orbichem online
Malaysia 504 919 1,305 -
Philippines 1,002 946 1,002 473
Singapore 3,413 794 6,442 5,952
Thailand 894 871 1,308 504
China 3,667 889 11,105 6,765
South Korea 400 924 799 -
Taiwan 450 904 450 545
Total 12,257 25,377 15,725
$/ton figures are calculated from customs data and may not reflect market prices

19 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE As introduced last month, prices of most Japanese petrochemical products are linked to the quarterly
domestic naphtha prices. While the Q1 price was Yen 48,800/kl, most producers are calculating the Q2
PRICE MONITOR price at around Yen 56,000/kl, nearly up 15% on Q1. Moreover, the Q3 price could be even higher by
13-14% on Q2. If the present feedstock situation continues, VAM producers will be surely forced to attempt
another round of price increase for Q3.
FEEDSTOCKS
Methanol VAM Production and Shipment (Japan)
Ethlylene (1,000 tons)

ACETIC ACID Jan-Mar 07 % Change

Production 172.4 6.9
United States
Inventory 25.1 4.6
Europe Shipment
China PVOH 103.9 2.9
Asia PVAc Emulsion 10.3 6.0
EVA 23.0 0.2
Japan
Other 4.0 138.6
Consumption and Production Exports 32.7 36.8
Total 173.9 8.3
VINYL ACETATE MONOMER
United States PVOH Production and Shipment (Japan)
West Europe (1,000 tons)
China
Jan-Mar 07 % Change
Asia Production 59.0 3.0
Japan Inventory 36.4 10.3
Consumption and Production Shipment
Vinylon 12.6 1.6
ETHYL ACETATE Textile Sizing 1.8 4.2
Paper Coating 4.5 0.1
United States
Film 1.8 14.2
West Europe Adhesive 7.1 2.6
China Other 10.6 22.0
Asia Export 23.4 26.7
Total 61.9 11.6
Japan
Consumption and Production
POLYVINYL ALCOHOL

Plant outages around the world are understood to include those in the following table. They are not
ACETIC ANHYDRIDE necessarily confirmed or otherwise by the producers concerned.
United States
Company/Plant Period Length Capacity Lost
West Europe
(days) (000 tons)
Economic news 2007
Dairen, Taiwan January 5 9
BP, Hull, UK April 7
company news Millennium, La Porte October 31 34
Wacker, Germany October 25 11
Access Tecnon 2006
Denki, Chiba May/Jun 20 6
orbichem online Dow, Texas City Sep/Oct 30 30
Kuraray, Okayama Sep/Oct 21 8
BP, Hull Sep/Oct/Nov 60 34
Celanese, Spain November 30 16
Showa Denko, Japan November 4 2
Beijing Organic December 30 10

20 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE ETHYL ACETATE

PRICE MONITOR United States

Celanese placed its global customers on 50% allocation for esters solvents for 60 days following its force
FEEDSTOCKS majeure declaration on acetic acid on 14 May from its Clear Lake, Texas, plant. While Celanese does
Methanol not produce ethyl acetate at Clear Lake, it does produce 60,000 tpa of ethyl acetate at Pampa, Texas. As
Ethlylene discussed previously, the acetic acid plant at Pampa has been shut since 24 May due to a fire at a utility
provider. There was no damage reported to any of the production units at Pampa.
ACETIC ACID
Celanese issued a 3 c/lb increase on ethyl acetate and methyl acetate, effective 1 June, for North America,
United States
or $66/mt for South and Central America. That price increase was issued before any of the production
Europe problems occurred. BP also issued a 3 c/lb increase on ethyl acetate for North America ($66/mt for South
China and Central America) effective 1 June. Oxea said it will raise its n-butyl acetate, iso-butyl acetate, and
Asia n-propyl acetate prices, effective 1 June, by 3 c/lb in North America and $66/mt in South and Central
America. Eastman previously issued similar price increases for butyl acetate and propyl acetate effective
Japan
15 May.
Consumption and Production
The outcome of those price increases, as well as the 3 c/lb increase announced for 1 April, has not been
VINYL ACETATE MONOMER determined. In the last newsletter 1 May, market participants reported that the increase had largely been
United States unsuccessful. However, with possible supply constraints looming, the earlier price hike might earn some
West Europe re-examination.
China
It is likely that consumers will resist accepting the most recent increases, especially contract customers, since
Asia the increases were proposed in the middle of the quarter. But, considering the uncertainty surrounding the
Japan restart of Celanese’s units, ester solvent producers likely will continue the push for higher prices into July if
Consumption and Production they are not successful in June.

ETHYL ACETATE But, the other key factor is demand. With weaker than expected economic growth during Q1 and a slump
in housing continuing in certain parts of the country, solvent demand is sagging, market participants said.
United States
West Europe
UNITED STATES ETHYL ACETATE EXPORTS
China
February 2007 Jan-Feb 07 Jan-Feb 06
Asia Tons $/Ton Tons Tons

Japan Canada 551 1,133 1,148 1,569

Mexico 93 1,034 590 1,988
Chile 157 983 157 318
POLYVINYL ALCOHOL Venezuela 214 1,130 214 367
Belgium 1,119 1,147 1,183 1,741
Spain 1,005 1,011 1,731 1,420
ACETIC ANHYDRIDE Turkey - - 61 1,049
United States Others 111 1,937 1,088 2,117
Total 3,250 6,172 10,569
West Europe
$/ton figures are calculated from customs data and may not reflect market prices

Economic news
UNITED STATES ETHYL ACETATE IMPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
company news Tons $/Ton Tons Tons
Mexico - - - 1,993
Access Tecnon Argentina 220 841 220 300
United Kingdom 1 - 1,002 310
orbichem online South Africa 797 863 797 190
Others - - 17 245
Total 1,018 2,036 3,038
$/ton figures are calculated from customs data and may not reflect market prices

21 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE West Europe

PRICE MONITOR BP declared force majeure on ethyl acetate from Hull, UK, on 1 May due to production problems which
began in April. The 250,000 tpa plant was restarted 12 May, and a BP spokesman said it hoped
production would stabilize enough by the end of May to allow the lifting of any remaining allocations.
FEEDSTOCKS
Methanol This latest problem at the Hull plant, when combined with operations problems suffered by other European
Ethlylene producers earlier this year, meant that supplies were generally considered tight across the region in May.
The Euro20/mt price increase issued by at least one supplier for 1 May reportedly passed through, but
ACETIC ACID full confirmation was not received from market participants before publication. Spot prices were heard
moving up during the month as well. It was understood that spot prices were seen in a wide range between
United States
Euro930-990/mt late in the month.
Europe
China Market participants also were waiting for the restart of the Celanese units in the US, not only because of the
Asia direct effect on ethyl acetate but also because of the acetic acid supplies.

Japan
China
Consumption and Production
Export offers in late May increased to $870-890/ton fob from ports in East China, and $930/ton fob from
VINYL ACETATE MONOMER ports in South China.
United States
West Europe Domestic prices have increased at the end of May compared to that of April, responding to the increases
of acetic acid prices. Supplies also are tight as there were few cargoes available for sale in Jiangsu and
China
Zhejiang, East China.
Asia
Japan In the final week of May, prices were at Rmb8400/ton ex-tank in Jiangsu (Nantong) and Rmb8400-8500/
Consumption and Production ton ex-tank in Zhejiang (Taizhou); prices in South China were at Rmb8600-8700/ton ex-tank; market prices
in North China were at Rmb8400-8500/ton. In contrast, ex-works offers in the final week of April were at
ETHYL ACETATE Rmb8100/ton from Jiangsu Sopo, Rmb8200/ton from Shanghai Wujing, Rmb8200/ton from Shandong
Jinyimeng and Rmb8600-8700/ton from Jiangmen Handsome Chemical.
United States
West Europe Jiangsu Sopo confirmed that its 200,000 tpa ethyl acetate plant has been debottlenecked to 250,000 tpa
China this year. The plant has been operating at 80% since last month. It also indicated that another 200,000 tpa
Asia ethyl acetate plant will be on stream at end 2008 or 2009. It is also planning a new 100,000 tpa butyl
acetate plant.
Japan
Shanghai Wujing produces ethyl acetate at a capacity of 100,000 tpa along its acetic acid production.
POLYVINYL ALCOHOL
Wujing has indicated that they will add another 100,000 tpa ethyl acetate plant at the end of 2007 or in
early 2008.
ACETIC ANHYDRIDE
United States CHINESE ETHYL ACETATE EXPORTS
West Europe March 2007 Jan-Mar 07 Jan-Mar 06
Tons $/Ton Tons Tons
Economic news Israel 254 919 374 -
UAE 2,053 765 3,030 -
Indonesia 996 760 996 7
company news Philippines 1,014 760 3,393 1,700
Singapore 2,996 760 2,999 1,004
Vietnam - - 1,176 -
Access Tecnon Hong Kong 205 941 391 445
South Korea 3,976 788 8,990 2,961
orbichem online
Taiwan 3,982 760 6,992 1,003
Japan 998 894 3,945 761
Others 21 1,418 195 128
Total 16,495 32,481 8,009
$/ton figures are calculated from customs data and may not reflect market prices

22 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
CHINESE ETHYL ACETATE IMPORTS
March 2007 Jan-Mar 07 Jan-Mar 06
PRICE MONITOR Tons $/Ton Tons Tons
Kuwait 216 822 590 827
Taiwan 1,076 751 1,533 527
FEEDSTOCKS Others 97 1,900 895 1,600
Methanol Total 1,389 3,018 2,954
$/ton figures are calculated from customs data and may not reflect market prices
Ethlylene

ACETIC ACID
United States CHINESE ETHYL ACETATE IMPORTS
(1,000 Metric Tons)
Europe
Month 2005 2006 2007 2006 2007
China $/ton $/ton
Asia Jan 3.5 0.7 1.3 871 885
Feb 3.4 1.2 0.4 733 1,015
Japan
Mar 1.6 1.1 1.4 846 843
Consumption and Production Apr 5.9 0.4 - 932 -
May 5.2 0.8 - 831 -
VINYL ACETATE MONOMER Jun 5.4 0.3 - 1,009 -
Jul 5.6 0.8 - 893 -
United States Aug 6.0 0.5 - 920 -
West Europe Sep 4.5 0.9 - 829 -
Oct 1.2 0.7 - 867 -
China Nov 2.2 1.7 - 838 -
Dec 2.0 0.5 - 815 -
Asia
Jan-Mar 8.4 3.0 3.0 805 881
Japan
% Change (19.0) (65.0) 2.2 2.5 9.4
Consumption and Production Jan-Dec 46.4 9.6
% Change 34.2 (79.4)
ETHYL ACETATE $/ton figures are calculated from customs data and may not reflect market prices
United States
West Europe
CHINESE ETHYL ACETATE EXPORTS
China (1,000 Metric Tons)
Asia Month 2005 2006 2007 2006 2007
Japan $/ton $/ton
Jan 1.2 1.3 9.5 1,091 787
POLYVINYL ALCOHOL Feb 0.1 2.1 6.5 813 795
Mar 1.9 4.7 16.5 779 781
Apr 0.6 13.2 - 787 -
ACETIC ANHYDRIDE May 3.0 8.1 - 785 -
Jun 0.4 7.4 - 778 -
United States Jul 0.5 9.3 - 823 -
West Europe Aug 1.4 12.4 - 786 -
Sep 0.9 13.5 - 786 -
Oct 1.8 13.9 - 827 -
Economic news Nov 0.3 10.1 - 794 -
Dec 6.9 13.4 - 788 -

company news Jan-Mar 3.1 8.0 32.5 837 786

% Change 588.1 154.5 305.5 8.0 (6.1)
Jan-Dec 18.8 109.4
Access Tecnon % Change (9.0) 480.4
orbichem online $/ton figures are calculated from customs data and may not reflect market prices

23 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
TAIWANESE ETHYL ACETATE EXPORTS
(1,000 Metric Tons)
PRICE MONITOR Month 2005 2006 2007 2006 2007
$/ton $/ton
Jan 0.1 1.7 1.3 887 996
FEEDSTOCKS Feb 0.2 1.0 0.7 931 986
Methanol Mar 0.6 1.2 - 956 -
Apr 0.4 0.8 - 956 -
Ethlylene May 0.3 1.2 - 952 -
Jun 0.6 1.5 - 944 -
ACETIC ACID Jul 1.2 1.2 - 954 -
Aug 0.7 1.0 - 982 -
United States
Sep 0.5 1.0 - 975 -
Europe Oct 0.7 1.6 - 977 -
Nov 0.5 0.8 - 996 -
China
Dec 1.5 1.1 - 1,022 -
Asia Jan-Feb 0.3 2.7 2.1 903 992
Japan % Change (82.8) 907.9 (24.2) (15.5) 9.9

Consumption and Production Jan-Dec 7.5 14.1

% Change 146.4 88.3

VINYL ACETATE MONOMER $/ton figures are calculated from customs data and may not reflect market prices

United States
West Europe TAIWANESE ETHYL ACETATE IMPORTS
China February 2007 Jan-Feb 07 Jan-Feb 06
Tons $/Ton Tons Tons
Asia
Singapore 405 898 1,046 1,571
Japan China 1,990 820 4,999 1,003
Consumption and Production Japan 14 2,700 1,414 1,761
Others 2 3,170 5 293
Total 2,411 7,464 4,628
ETHYL ACETATE
$/ton figures are calculated from customs data and may not reflect market prices
United States
West Europe
TAIWANESE ETHYL ACETATE IMPORTS
China (1,000 Metric Tons)
Asia Month 2005 2006 2007 2006 2007
Japan $/ton $/ton
Jan 2.2 1.8 5.1 796 835
POLYVINYL ALCOHOL Feb 2.2 2.8 2.4 813 846
Mar 2.1 1.0 - 860 -
Apr 2.0 2.6 - 850 -
ACETIC ANHYDRIDE May 0.8 2.6 - 842 -
Jun 1.8 2.7 - 876 -
United States Jul 2.7 4.7 - 866 -
West Europe Aug 3.0 5.4 - 858 -
Sep 0.8 4.0 - 879 -
Oct 3.0 3.5 - 863 -
Economic news Nov 1.3 4.4 - 862 -
Dec 2.2 2.7 - 848 -

company news Jan-Feb 4.3 4.6 7.5 806 839

% Change 117.9 6.5 61.3 (4.4) 4.1
Jan-Dec 24.2 38.1
Access Tecnon % Change 16.0 57.3
orbichem online $/ton figures are calculated from customs data and may not reflect market prices

Yaraco’s 80,000 tpa ester solvents plant at Chongqing was shut down in early May for a one-month planned
maintenance. The solvents plant is at the same site as its acetic acid production, and it is understood that
the plant produces more ethyl acetate than butyl acetate.

Jiangmen Handsome Chemical Development Ltd., located in Jiangmen City, Guangdong Province, will
expand its ester solvents capacity to 260,000 tpa during the second half of 2007. Jiangmen Handsome

24 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE
TAIWANESE ETHYL ACETATE EXPORTS
February 2007 Jan-Feb 07 Jan-Feb 06
PRICE MONITOR Tons $/Ton Tons Tons
Israel 207 977 228 -
Tunisia 122 1,113 304 -
FEEDSTOCKS India 182 974 365 128
Methanol Others 233 937 1,169 2,597
Total 744 2,066 2,725
Ethlylene $/ton figures are calculated from customs data and may not reflect market prices

ACETIC ACID
currently has two separate acetates production lines with a combined capacity of 210,000 tpa. (ethyl
United States
acetate:butyl acetate ratio is 50:50). Jiangmen Handsome has been suffering from high feedstock costs
Europe during 2007 as all of the acetic acid requirements are imported.
China
Asia Shandong Haihua has been trying to start up a 100,000 tpa ethyl acetate line in Shandong province since
January this year. It is understood that there have been some technical issues on catalysts, and the plant
Japan
is expected to start production in June. Commercial product will be available later. The facility is using a
Consumption and Production process to make ethyl acetate direct from ethanol, provided by Davy Process Technology.

VINYL ACETATE MONOMER Shandong Jinyimeng started a new butyl acetate line with a capacity of 80,000 tpa around 20 April,
United States raising its total capacity to 100,000 tpa. However, it shut down the original 20,000 tpa line at the same
West Europe time. It is planning to expand its current 180,000 tpa of ethyl acetate capacity to 200,000 tpa by July
2007.
China
Asia Ji’an Shenghua now expects to start its new 100,000 tpa ethyl acetate line in Jilin province in the first half
Japan of June this year, later than earlier indication of mid May. The second acetic acid line was brought on
Consumption and Production stream on 15 May, raising its daily output to 400 tpd. However, the whole acetic acid plant was shut down
on 17/18 May due to maintenance and also some environmental issues on one of its ethanol plants. The
ETHYL ACETATE acetic acid plant is expected to restart in early June.
United States
Asia
West Europe
China Higher acetic acid pricing has put further cost pressure on Chinese ethyl acetate operations, again
Asia encouraging higher export offers from the mainland into regional Asia in the last month.
Japan
Elsewhere in the region, pricing has also moved up sharply in recent weeks as soaring naphtha prices have
increased cost pressure and the Celanese Clear Lake outage and force majeure have tightened supply.
POLYVINYL ALCOHOL

Offers were reported at $970-980/ton cfr Northeast/Southeast Asia on 25 May, up from $900-910/
ACETIC ANHYDRIDE ton cfr Northeast/Southeast Asia in the first-half of May. Celanese is understood to have increased its
United States Singapore pricing to $950-960/ton ex-tank in the third week of May.
West Europe
Chinese domestic prices are also stronger, reported at Rmb7800-7850/ton ex-tank in East China and
Economic news Rmb8300-8400/ton ex-tank in South China on 25 May, up Rmb100-200 on early May levels.

Korea Alcohol is understood to have filed an antidumping complaint in early May against Chinese ethyl
company news acetate producers, although it had not been possible to confirm the details at the time of writing. Chinese
exports into Korea are estimated to have increased to 3000 ton/month in recent months.
Access Tecnon
Japan
orbichem online
Despite the force majeure announcement (50% allocation for two month) by Celanese including ethyl
acetate, market prices of ethyl acetate in Asia have not reacted vividly according to a major Japanese
market player, with an exception of Southern China where there are only a few producers without captive
acetic acid.

Looking at the domestic Japanese market, all of ethyl acetate producers has been trying to increase the
domestic price by a range of Yen 8-16/kg (roughly $66-132/ton) on the back of sharply rising costs of

25 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE basic feedstocks. Showa Denko, the largest ethyl acetate producer in Japan, told Tecnon OrbiChem that
it would move to a new price incorporating a Yen 8/kg increase from 1 June, but this increase can barely
PRICE MONITOR cover the cost increase and would attempt a second increase very shortly.

The domestic consumption of ethyl acetate continues modest growth in Japan in Q1 2007 (see the table
FEEDSTOCKS below). However, increased imports starting from 2006, especially imports from China, seem to be
Methanol somewhat affecting domestic producers’ business as ethyl acetate users are facing increasing cost pressure
Ethlylene from all raw materials they use and are eager to use cheaper materials, in some cases at the expense of
qualities. Ethyl acetate from China may be going to be used in other applications than thinner. Careful
ACETIC ACID observation is needed on the future trend of imported ethyl acetate.

United States
Regarding the anti-dumping case by Korea Alcohol, it is our understanding that not only China but also
Europe other countries such as Japan and Singapore will be subjected to the anti-dumping investigations. But, as of
China 29 May, no Japanese company had received any official letter for the investigation and it remains unclear
Asia whether the petition by Korea Alcohol has been accepted officially and any action has been taken by the
Korean government.
Japan
Consumption and Production Japanese Supply Demand Balance of Ethyl Acetate
(1,000 Metric Tons)
VINYL ACETATE MONOMER
United States Q1 04 Q1 05 Q1 06 Q1 07 %Change
West Europe (07/06)
Production 57.4 57.3 57.8 58.5 1.3
China
Inventory Change 0.2 0.9 0.7 0.8 ***
Asia Imports 6.4 5.5 12.2 14.8 22.0
Japan Exports 4.7 9.6 6.8 8.7 29.1
Consumption and Production Consumption 59.3 54.2 63.8 65.4 2.4
Export Ratio(% 8.2 16.7 11.7 14.9 ***
ETHYL ACETATE
Japanese Supply of Ethyl Acetate
United States
(1,000 Tons)
West Europe
China 2004 2005 2006 2007
Asia January 21 21 22 21
February 18 16 21 16
Japan
March 19 21 15 21
April 16 22 18
POLYVINYL ALCOHOL
May 10 24 23
June 19 22 21
ACETIC ANHYDRIDE July 23 25 24
United States August 18 23 21
September 20 22 17
West Europe
October 20 22 17
Economic news November 22 25 23
December 24 21 22
Total 232 264 244
company news % Change 6.0 13.7 7.8
Jan-Mar 58 57 58 59
Access Tecnon % Change *** 1.4 1.0 1.3

orbichem online POLYVINYL ALCOHOL

Celanese will close two manufacturing facilities in Europe as part of its “revitalisation plans” for its polyvinyl
alcohol and emulsions businesses, the company said in late May. The site closures include a PVOH-
polyvinyl acetate plant at Guardo, Spain, and an emulsions plant at Warrington, UK, while one of four
reactors at the Meredosia, Illinois, emulsions plant will be idled, according to a Celanese spokesman.
Approximately 150 employees will be affected by the closures, and production will be absorbed by other
production facilities, the spokesman said.

26 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

Acetic Acid • Vinyl Acetate including Ethyl Acetate, Acetaldehde, Polyvinyl Alcohol and Acetic Anhydride

Front PAGE The closures are part of an overall strategy laid out by Celanese during its December 2006 Investor Day
presentation, during which the company said it wanted to increase EBITDA by $300-$350 million by
PRICE MONITOR 2010. The polyvinyl alcohol and emulsions business is expected to deliver at least $50 million in EBITDA
growth during that period, the spokesman said.

FEEDSTOCKS Celanese also said 4 May that it will increase the price of all Celvol and Celvol E Polyvinyl Alcohol grades
Methanol globally by 7% per dry pound. This price increase will be effective on 1 June, or as contracts allow.
Ethlylene
ACETIC ANHYDRIDE
ACETIC ACID
United States
United States
Europe Eastman issued a 3 c/lb price increase for acetic anhydride and derivatives, effective 1 June for both list
China and off-list prices. The US market is watching the situation at Celanese in Clear Lake and Pampa very
Asia closely as the acetic anhydride market already was expected to be tight for the remainder of 2007.

Japan
West Europe
Consumption and Production
Acetic anhydride market sources said second quarter contract prices settled in a range from a rollover to
VINYL ACETATE MONOMER an increase of Euro5/ton compared to Q1, and that supplies remain tightly balanced. Suppliers reported
United States being sold out for the remainder of the quarter.
West Europe
China
ECONOMIC NEWS
Asia The US economy grew at it slowest pace in four years during the first quarter 2007, according to the US
Japan Department of Commerce, which said 31 May that its revised Q1 GDP figure was 0.6%. The gain in
Consumption and Production gross domestic product compares with an initial estimate of 1.3% pace, down from 2.5% in the final three
months of last year.
ETHYL ACETATE
US existing home sales fell by 8.4% in March to a seasonally adjusted annual rate of 6.12 million units.
United States
The National Association of Realtors (NAR) said the decline was expected due to the unusually poor
West Europe weather in February and the tightening of mortgage loan availability. The NAR reported that existing home
China sales for the first quarter this year (ave. 6.41 million units) was actually better than the average sales pace
Asia achieved in the second half of 2006.
Japan
The European Commission has announce that its member states have agreed to negotiating mandates and
it will begin negotiating free trade agreements with India, South Korea, and the Association of South East
POLYVINYL ALCOHOL
Asian Nations (ASEAN) in the coming months.

ACETIC ANHYDRIDE Industrial orders for the 13-member Eurozone rose 4.7% in February compared to the same month last
United States year. Chemical and synthetic fibre orders increased by 8.1% for the month reflecting the continuing healthy
economic conditions in Europe.
West Europe

Economic news The Institute for Supply Management reported that its April index of manufacturing activity increased to 54.7
(from 50.9 in March). Although the increase was a more significant jump that experts had anticipated, most
manufacturers registered growing concerns about costs, especially with metals and energy. Manufacturers
company news registered their ninth consecutive month of inventory reductions and supply chains report having their
inventory levels in good balance.
Access Tecnon
The European Union industrial producer price index increased 2.4% in March when compared to the
orbichem online same period last year. Prices for chemicals and synthetic fibres increased 2.6% for the same comparison
period.

US productivity growth exceeded expectations in a slowing economy by registering a 1.7% annualised

growth rate in the first quarter. The strong pace in productivity, despite poor GDP growth, suggests that
companies are staying focused on keeping labour costs in check. Unit labour costs rose just 0.6% for the
quarter.

27 Tecnon OrbiChem ISSUE NUMBER 237 / 1ST JUNE 2007

 According to the European Commission, the economic sentiment index for April matched March’s six-year
high of 111 for the Eurozone countries. With industrial capacity utilisation for April approaching the record
rate set in 1990 and the broad money supply measure, M3, growing at an annual rate of 10.9%, concerns
are rising about future inflation risks. However, the inflation rate for April was 1.8%, below the target rate
of 2%. Nevertheless many economists still expect the European Central Bank to raise interest rates during
its June meeting.

COMPANY NEWS

Celanese Corporation said 18 May that funds affiliated with The Blackstone Group LP no longer owned
any shares in the company after Blackstone reported it had sold its remaining 22,106,597 shares of
Celanese’s Series A common stock. Blackstone reportedly received $784.8 million in proceeds from the
offering. Celanese did not receive any of the proceeds. Blackstone Group originally acquired a majority
share in Celanese AG in 2004, took the company private, and then initiated a public offering in 2005.

CORRECTION

We regret that an error appeared in the Price Monitor in our Newsletter Number 236 dated 2 May. Our
assessment of the 30 April US acetic acid export price should have been 26.0-27.0 c/lb fob USG. Also,
an error appeared in the Price Monitor in our Newsletter Number 235 dated 2 April. Our assessment of
the 30 March US acetic acid export price should have been 26.0-27.0 c/lb fob USG. We apologise for
the errors.

Information contained in this report is obtained from sources believed to be reliable, however no responsibility nor liability will be accepted by Tecnon
OrbiChem for commercial decisions claimed to have been based on the content of the report.

Reproduction of any part of this work by any process whatsoever without written permission of Tecnon OrbiChem is strictly forbidden.

Tecnon OrbiChem Ltd

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Plantation Wharf, York Place
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Editor William Bann
China Victor Peng Tel: +44 20 7924 3955
South & East Asia Mary Heathcote Fax: +44 20 7978 5307
Japan Keiji Wakatsuki Email: william@orbichem.com
Web: www.orbichem.com