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1. Market brief z American industrial productivity increases by 1.6% in Q1. z The international oil prices rebound sharply up over 30% in May. z Textile industry: foreign businessman undersells, which affects the favorable policy. z Natural gas price will not integrate with oil price this year. z Nanjing BlueStar: BDO facility keeps 80% operation rate. z Burgeoning situation fade away in chemical markets of May.

2 Weekly market analysis 2.1 Summary The market pricing goes down slightly with sleepy atmosphere in the markets. Downstream clients cannot see favorable price in the future markets. The overall transactions volumes are not high.

As to domestic suppliers, 60,000 tons BDO facility at Xinjiang Markor has resumed but its products will not be transacted in the markets until the middle of June, therefore, it has no quotations yet. Sichuan Tianhua 25,000 tons facility keeps 80% operation rates. Its products have been delivered to East China, being offered at RMB 14000-14200/t. Shanxi Sanwei calcium carbide method facility keeps 70% operation rates with quotations at RMB 14500/t.

Shanxi Shanhua 30,000 tons facility has some problems in techniques with no products yet. Nanjing BlueStar 55,000 tons (THF and BDO) facility keeps 80% running rates. Its proportion between BDO and THF at 6:4 or 4:6 can be adjusted according to market information. Most BDO in BlueStar is serving for its own subsidiary PBT factory, few for selling, being offered at RMB 14500/t. Shandong Jiatai 13,000 tons facility resumption time is not confirmed yet. Fujian Meizhouwan 35,000 tons facility will make trial in July. The supply volumes in June are larger than that in May.

Regarding traders, not many stocks arriving at the ports and they keeping low inventories, offers from traders are varied according suppliers.

In consideration of downstream clients, excepting PU sectors, demands from PBI, GBL and THF keep relatively high levels. However, these three sectors keep cautious attitudes towards their downstream clients, thereby; their purchase for BDO will be decided by orders.

East China BDO bulk stocks in the east are offered at RMB 14000-14500/t with transactions at RMB 13800-14300/t. Drums Taiwanese stocks are quoted at RMB 14300-14500/t while RMB 15500-16000/t for Mitsui and BASF stocks.

North China Bulk BDO stocks in the north are quoted at RMB 14200-14700/t but dealt at RMB 14000-14500/t. Drums Taiwanese stocks are quoted at RMB 14500-14700/t but RMB 15500-16000/t for Mitsui and BASF stocks.

South China Bulk BDO stocks in the south are offered at RMB 14500-14800/t with transactions at RMB 14300-14600/t. Drums from Mitsui and BASF are quoted at RMB 15500-16000/t.

USD markets For oversea stocks, the USD quotations in June are diversified with bulk stocks being offered at USD 1400-1500/t; drummed stocks are at USD 1700-1950/t.

Table: BDO price-comparison between this week and last week in China (RMB/t) USD BDO（bulk） East China South China Wenzhou North China (USD/t) This week 14000-14500 14300-14800 14000-14500 14200-14700 1450-1500 One week 14300-15000 14800-15300 14500-15000 14500-15000 1400-1500 ago Four weeks 13500-14000 14300-14500 13500-14000 13700-14200 1400-1500 ago USD BDO（drum） East China South China Wenzhou North China (USD/t)

This week 14500-15000 14800-15300 14500-15300 14700-15300 1650-1950

One week 16000-16500 16000-16500 16000-16500 15500-16000 1550-1650 ago Four weeks 14000-14500 14000-14500 14000-14500 14000-14500 1550-1650 ago

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BDO(bulk) average price trend from 2008 to June 2009 (East China )

20000 RMB/t 18000

16000

14000

12000 www.pudaily.com

10000

8000 week 6000 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76

3. Quotes from suppliers 3.1 Quotes from domestic suppliers (RMB/t)

Producers Quotations in June Quotations in May Up Remarks

Shanxi Sanwei 14300-14500 -- 0/0 Bulk Bulk, no Xinjiang Markor -- -- 0/0 quotations Sichuan Tianhua 14000-14200 14500 0/0 Bulk

BlueStar 14500 -- -- Bulk Trial run, no Shanxi Shanhua ------quotations

3.2 Quotes from global suppliers (USD/t)

Producers Quotations in June Quotations in May Up Remarks

bulk，shipment Mitsui 1850-1950 1550-1650 300 in July bulk，shipment BASF 1500-1550 1400-1500 0/0 in July bulk，shipment Lyondell 1500-1600 1400-1500 0/0 in July Taiwan Cement -- -- 0/0 No quotations bulk，shipment Taiwan Dalian 1450- 1550 -- 0/0 in July

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bulk，shipment Taiwan Nanya 1450-1550 1400-1500 0/0 in July

4. Weekly upstream materials market analysis 4.1 Weekly oil price trends

NYMEX WTI IPE Brent OPEC basket Date Futures contract in Futures contract in July Futures contract in July July 2009-6-1 66.31 65.52 61.77

2009-6-5 68.81 68.71 66.41

Up 2.5 3.19 4.64

4.2 Weekly propylene price trends USD price RMB price Date (USD/t) (RMB/t) 2009-06-01 795-797（FOB Korea） 6000-6650

2009-06-05 810-812（FOB Korea） 6000-6650

Up 15 0/0

4.3 Weekly Maleic A nhydride (MA) price trends

Date USD price RMB price

2009-06-01 - 6200-6400（East China）

2009-06-05 - 6200-6400（East China）

Up - 0/0

5. Market forecast Along with the decline for BDO prices, downstream clients keep strong wait-and-see attitudes towards the future markets. In light of suppliers, Sichuan Tianhua stocks have been delivered to the eastern markets. Xinjiang Markor has restarted operation; Shanxi Sanwei began to serve for the markets; Nanjing BlueStar remains limited supply for the markets. In a short, domestic supply for the markets in June is obviously better than that in May. For the oversea stocks, stocks from Saudia Arabia and Taiwan are decreasing due to anti-dumping measures while other stocks are regular. Generally speaking, the supply in the

Shanghai Suntower Business Consulting 4 markets is ample. In addition, crude oil futures prices rise by 30%, which directly or indirectly influences the production cost for BDO. Concerning downstream demands, PBT, GBL and THF keep steady consumption for BDO, but low in PU sector. But on the other hand, PBT, GBL and THF manufacturers hold cautious attitudes towards the future markets, purchasing limited volumes. For the future markets in the next week, PU daily consultant considers that under the circumstances of ample supply but weak demands, transaction prices may slide continuously.

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