RIM Petrochemicals Intelligence Daily

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1 RIM Petrochemicals Intelligence Daily RIM PETROCHEMICALS INTELLIGENCE DAILY NO.1521 Nov COPYRIGHT(C) 2013 RIM INTELLIGENCE CO. ALL RIGHTS RESERVED. --TOKYO, 18:30 JST Nov Holiday Notice November 4 (Mon) is national holiday in Japan. RIM s Petrochemicals Report will not be issued on these days. Establishment of subsidiary company RISCO Rim Intelligence is pleased to announce the establishment of a subsidiary company Rim Innovation & Solutions Company (RISCO) on Sep 26, RISCO is wholly owned by Rim Intelligence and will serve as an agent for the marketing and sales of RIM products. In addition, it will be in charge of organizing seminars and workshops related to the energy and oil markets, undertake research and analysis assignments, and also provide tailor-made, customized reports on the energy market to meet specific needs of our customers. By expanding our services through the new company, we hope to better meet our customers satisfaction. We look forward to your continued support. --Today's RECX-22 rose by 0.74 to Learn the impact of shale gas on India s oil and gas markets RIM organizes India Delhi seminar, Nov 22: Indian companies are some of the few first in the world to chase the shale gas dream by investing in shale gas development in the US. With shale gas production increasing, what is the likelihood of it replacing petroleum products in India or at least compensating for the shortfall in some cases? To provide a platform for players from the natural gas, LNG, refinery and downstream product businesses to interact and discuss this issue, Rim Intelligence is organizing a seminar in Delhi, India on Nov 22. Participation fee is US$400 (excluding accommodation). [RIM Reports] *Please click on the following links to see samples of each type of report. Samples are not today's issue: Crude/Condensate Bunker LPG LNG Products RIM Data File Petrochemical Data RIM Website (Chinese Ver.)

2 Aromatics($/MT) Physical and Forward prices INDEX H2Nov H1Dec H2Dec H1Jan Benzene FOB Korea -1,215/1,225-1,225/1,235 1,225/1,235 1,205/1,215 FOB E-Japan -1,225/1,235-1,220/1,230 1,225/1,235 1,225/1,235 FOB W-Japan -1,225/1,235-1,220/1,230 1,225/1,235 1,225/1,235 CFR Japan -1,245/1,255-1,240/1,250 1,245/1,255 1,245/1,255 Toluene FOB Korea +1,100/1,113+ 1,095/1,110 1,095/1,110 1,105/1,115 Iso MX FOB Korea +1,190/1,200+ 1,190/1,200 1,190/1,200 1,190/1,200 CFR Taiwan +1,210/1,215+ 1,210/1,215 1,210/1,215 1,210/1,215 Styrene FOB Korea -1,610/1,620-1,735/1,740 1,610/1,620 1,610/1,620 CFR China -1,640/1,650-1,765/1,770 1,640/1,650 1,640/1,650 PX FOB Korea 1,380/1,390 1,400/1,410 1,380/1,390 1,380/1,390 CFR N.E.Asia 1,400/1,410 1,420/1,430 1,400/1,410 1,400/1,410 Olefins ($/MT) CFR N.E. ASIA CFR S.E. ASIA FOB Korea Ethylene 1,390/1,420 1,420/1,450 1,340/1,350 Propylene 1,460/1,480 1,340/1,370 1,380/1,390 Butadiene 1,680/1,720 1,630/1,670 1,650/1,690 Polymers ($/MT) CFR CHINA CFR S.E. ASIA LDPE(Film) 1,640/1,660 1,620/1,640 LLDPE(Film) 1,500/1,530 1,510/1,540 HDPE(Film) 1,500/1,530 1,510/1,540 HDPE(Yarn) 1,510/1,530 1,510/1,530 PP(Homo)-BOPP 1,500/1,520 1,510/1,540 PP(Homo)-Yarn/INJ 1,490/1,510 1,500/1,530 PP(Block Co)-INJ 1,520/1,540 1,520/1,550 PVC(CMP) 1,020/1,030 FOB N.E.Asia PET(Bottle) 1,300/1,320 Intermediates ($/MT) CFR CHINA Phenol 1,380/1,420 Bisphenol-A 1,580/1,640 Ethylene Glycol + 1,035/1,045 + Ethylenedichloride 350/370 Vinylchloride monomer 830/840 Acrylonitrile 1,880/1,920 PTA 1,000/1,005 Caprolactam 2,380/2,400 China Domestic (Yuan/MT) East China Propylene 10,500/10,700 Propylene -Shandong 10,800/10,900 PP(Homo)-Yarn/Inj 11,700/11,800 Butadiene 12,200/12,500 2

3 SBR 13,700/13,900 BR 13,800/14,000 SM -12,000/12,050- EPS 13,000/13,200 LDPE 13,100/13,300 LLDPE 11,600/11,800 HDPE-Film 11,600/11,700 HDPE-Yarn 11,700/11,800 MEG + 7,450/7,500 + PTA 7,300/7,350 Weekly & Monthly Average 28.Oct- 01.Nov Oct Ave. Benzene FOB Korea + 1,229/1, ,243/1,251 FOB E-Japan + 1,233/1, ,245/1,253 FOB W-Japan + 1,237/1, ,248/1,256 CFR Japan + 1,252/1, ,264/1,272 Toluene FOB Korea + 1,094/1, ,106/1,114 Iso MX FOB Korea + 1,186/1, ,209/1,219 CFR Taiwan + 1,206/1, ,226/1,234 Styrene FOB Korea + 1,626/1,634-1,672/1,682 CFR China + 1,656/1, ,697/1,706 PX FOB Korea + 1,389/1, ,417/1,428 CFR N.E.Asia + 1,409/1, ,437/1,448 CFR N.E ASIA CFR S.E ASIA 28.Oct- 01.Nov Oct Ave. 28.Oct- 01.Nov Oct Ave. Ethylene - 1,390/1,420-1,392/1,425-1,420/1,450-1,425/1,457 Propylene - 1,455/1,469-1,446/1,456-1,352/1,382-1,357/1,395 Butadiene - 1,682/1,728-1,671/1,713-1,632/1,678-1,621/1,663 FOB Korea Ethylene - 1,340/1,350-1,327/1,350 Propylene + 1,380/1,392-1,368/1,385 Butadiene - 1,656/1,692-1,628/1,658 CFR CHINA CFR S.E ASIA LDPE(Film) + 1,632/1, ,620/1,643-1,620/1,640-1,617/1,640 LLDPE(Film) - 1,500/1,530 1,499/1, ,504/1, ,500/1,518 HDPE(Film) - 1,504/1,534-1,505/1,528 1,504/1, ,503/1,526 HDPE(Yarn) + 1,506/1,530 1,499/1,519-1,504/1,530-1,510/1,532 PP(Homo)-BOPP - 1,508/1,528-1,516/1,536-1,514/1,544-1,521/1,549 PP(Homo)-Yarn/INJ - 1,494/1,514-1,497/1,517 1,500/1,530 1,502/1,530 PP(Block Co)-INJ 1,520/1,540-1,518/1,538 1,520/1,550 1,522/1,550 PVC(CMP) - 1,020/1,030-1,047/1,057 PET(Bottle FOB NEA) - 1,302/1,322-1,348/1, Oct- 01.Nov Oct Ave. Phenol + 1,368/1, ,353/1,402 Bisphenol-A 1,580/1,640 1,592/1,652 Ethylene Glycol - 1,023/1,032-1,048/1,055 Ethylenedichloride 350/ /365 3

4 Vinylchloride monomer- 832/ /849 Acrylonitrile + 1,880/1, ,858/1,905 PTA + 998/1, ,021/1,028 Caprolactam 2,380/2,400 2,364/2, Oct- 01.Nov Oct Ave. East China Propylene -10,500/10,640-10,559/10,676 Propylene -Shandong -10,740/10,840-10,924/11,024 PP(Homo)-Yarn/INJ +11,620/11, ,594/11,735 Butadiene -12,260/12,600-12,447/12,912 SBR +13,640/13,840-13,835/14,153 BR +13,740/13,940-13,906/14,241 SM -12,260/12,310-12,609/12,668 EPS -13,000/13,200-13,494/13,629 LDPE +13,100/13, ,835/13,106 LLDPE +11,600/11, ,559/11,688 HDPE-Film +11,560/11, ,465/11,582 HDPE-Yarn +11,660/11, ,612/11,741 MEG - 7,420/7,480-7,655/7,710 PTA - 7,310/7,380-7,447/7,518 Contract Prices Sep Oct Nov Bz ACP(CFR NEA,$/mt) 1,290 1,300 1,258- Yen/mt conversion 132, , ,500- Bz USCP(FOB USGC,cts/gal) $/mt conversion 1,316 1,307 1,226- PX ACP(CFR NEA,$/mt) - 1,470 - Feedstocks Index Naphtha CFR Japan($/mt) / Yen/kl conversion 64,421+ Apr-Jun 13 Jul-Sep 13 Oct-Dec 13(implied) Naphtha Domestic CP(Yen/kl) 65, ,900 66,200+ H2Nov H1Dec H2Dec Butane(CFR Japan,$/mt) / / / Reference Prices ($/MT) Dec Jan Feb Japan Mogas-Tocom(Yen/kl) 74,910-74,060-74,100- Yen/mt conversion 104, , ,917- East West Japan Mogas-RIM(Yen/kl) - 74,300 / 74, ,000 / 75,300 - Yen/mt conversion 103, ,375- WTI(Dec) Brent(Dec) Paper Dubai(Nov) Tokyo Spot Crude($/bbl)/Nov01 16: $/mt conversion Nymex WTI(Dec) ICE Brent(Dec) Crude Futures settlement($/bbl)/ Oct $/mt conversion TTM Interbank Forex($/Yen)

5 Spread/aromatics($/MT) BZ TL MX SM PX Nap Benzene Toluene ISO MX SM P-Xylene Naphtha Spread/olefins($/MT) Ethylene Propylene Butadiene Naphtha Ethylene Propylene Butadiene Naphtha Spread/Polyolefin & Intermediate VS Feedstocks ($/MT) LDPE(Film) 217 PP/Homo(BOPP) 40 SM 218- EDC -47 LLDPE(Film) 180 PP/Homo(Yarn/INJ) 30 Phenol VCM 252 HDPE(Film) 54 PP/Block Co(INJ) -14 PTA 61 PVC 182 MEG 197+ Spread/Aromatics vs Naphtha & WTI & Gasoline Naphtha Nymex WTI Mogas-tocom JPN Mogas-RIM BZ FOB Korea ($/MT) Yen/mt 27,148-47,671-15,799-15,917- TL FOB Korea ($/MT) Yen/mt 15, ,497+ 4,625+ 4,743+ MX FOB Korea ($/MT) Yen/mt 24, , , ,343+ Transactions Report date Period Basis Price date Period Basis Price Benzene Styrene Monomer 01-Nov Jan FOB KOREA 1, Nov Dec CFR CHINA 1, Oct Dec FOB KOREA 1, Nov Dec CFR CHINA 1, Oct Dec FOB KOREA 1, Nov Dec CFR CHINA 1, Oct Jan FOB KOREA 1, Nov Dec CFR CHINA 1, Oct Dec FOB KOREA 1, Nov Dec CFR CHINA 1, Oct Jan FOB KOREA 1, Nov Dec CFR CHINA 1, Oct Jan FOB KOREA 1, Oct Dec CFR CHINA 1, Oct Jan FOB KOREA 1, Oct Dec CFR CHINA 1, Oct Jan FOB KOREA 1, Oct Dec CFR CHINA 1, Oct Jan FOB KOREA 1, Oct Dec CFR CHINA 1,647 Toluene 29-Oct Dec CFR CHINA 1, Nov Dec FOB KOREA 1, Oct Dec CFR CHINA 1, Nov Dec FOB KOREA 1, Oct Nov CFR CHINA 1, Nov Dec CFR CHINA 1,133 Propylene 29-Oct Dec CFR CHINA 1, Oct Dec/1H CFR CHINA 1, Oct Dec CFR CHINA 1, Oct Dec CFR CHINA 1, Oct Dec FOB KOREA 1, Oct Dec/1H CFR CHINA 1,458 Aromatics On an FOB Korea basis, benzene prices for December loading were in the range of 5

6 $1,225-1,235/mt, unchanged from a day earlier while January prices debuted in the range of $1,205-1,215/mt. Benzene prices in Asia found a happy medium on Friday as downward pressure from weakness in the styrene monomer market in Asia was offset by strength in US benzene prices thereby keeping FOB Korea prices unchanged on the day. In the spot market on Friday, a deal for January loading was heard done at $1,208/mt while bids and offer for December came in at $1,225/mt and $1,235/mt, respectively, and for January were heard in the range of $1,205-1,215/mt. Meanwhile, the Asia Contract Price for November was set at $1,258/mt, down $42/mt from the previous month s contract price. FOB Korea toluene prices for December were in the range of $1,095-1,110/mt, up $5/mt on the day while January opened business in the range of $1,105-1,115/mt. The day-to-day increase for December was attributed to an increase in US toluene prices and firmness in the naphtha market. In the spot market for December loading, deals were heard done at $1,103/mt and $1,105/mt on an FOB Korea basis while one deal on CFR China basis was heard done at $1,133/mt. Following deals in the market, bids and offers for December were heard at $1,095-1,110/mt and for January at $1,105-1,115/mt. Prices for styrene monomer (SM) for FOB Korea slipped $8/mt from the previous day to $1,635 1,640/mt for second-half November loading and $1,610 1,620/mt for December loading. Prices for CFR China lost the same amount to $1,665 1,670/mt for second-half November delivery and $1,640 1,650/mt for December delivery. Chinese domestic prices dropped Yuan 150/mt to Yuan 12,000 12,050/mt, dragged down by a depreciation of Chinese domestic derivative market. Prices for CFR China followed the decline. Under this situation, two deals were done at $1,630/mt for December delivery on a CFR China basis. After these deals, however, deals were done higher at $1,635/mt and $1,638/mt because of low inventories for import cargoes in China, which prompted buyers to raise bids to $1,645/mt and limited losses. On the other hand, prices for FOB Korea just reflected movements in prices for CFR China amid a lack of bids and offers. Isomer grade mixed xylenes (MX) prices for December increased $10/mt from the previous day to $1,190 1,200/mt on a FOB Korea basis and $1,210 1,215/mt on a CFR Taiwan basis. The gains came due to tight supply and healthy demand coupled with a hike in US prices. On an FOB Korea basis, bids were revised up from $1,185/mt to $1,192/mt for December loading, though no sellers emerged. On a CFR Taiwan basis, bids were also raised from $1,211/mt to $1,219/mt for prompt second-half November delivery. In addition, a location swap, whereby second-half November for FOB Korea was released and that for CFR Taiwan was taken, was bid at $18/mt. Paraxylene (PX) prices for December rose $10/mt from the previous day to $1,400 1,410/mt on a CFR Northeast Asia and $1,380 1,390/mt on a FOB Korea basis. The Asian contract price (ACP) did not get settled on Thursday and this led to a wait-and-see mood in the market as participants tried to seek the direction. According to a market source, some traders were likely to cover short positions, moves that might make prices firm. December delivery was bid at $1,400/mt. Olefins Asian ethylene prices for CFR Northeast Asia were in the range of $1,390-1,420/mt and in the Southeast Asia market in the range of $1,420-1,450/mt, unchanged from a day earlier. Prices on an FOB Korea basis were also unchanged on the day holding in the range 6

7 of $1,340-1,350/mt. In the Northeast Asia ethylene market, a wide gap between buyers and sellers kept spot activity dull. Buyers kept ideas in the range of $1,350-1,360/mt and showed no signs of raising while sellers drew a line in the at $1,420/mt. Due to the wide gap, those who opted for discussions were heard to be negotiating off market-linked pricing. At CPC in Taiwan, the producer was running the No.6 naphtha cracker at 90% capacity and making moves to lower the run rate of the No.5 cracker to 80%. The lower run rate was being implemented to adjust bloated inventories as well as throttle back on production to meet an anticipated drop in demand due to a planned power shutdown in the Kaoshiung region in November that will idle a number of derivative makers. At Formosa Petrochemical Corp (FPCC), also in Taiwan, the company planned to restart the No.2 naphtha cracker at the end of October, but as of Friday, Nov 1, there was no information in the market that a restart had occurred. In South Korea, a number of new derivative units came on line in 2013 and more are planned for And with a number of naphtha crackers scheduled for turnaround activity in 2014, concerns now are growing that ethylene supply in South Korea in 2014 may be tight. And cross the water in Japan, one naphtha cracker in that country will be decommissioned in Add to that a large number of planned maintenances for 2014 and a shortage of Japanese material is also projected for In Southeast Asia where the vast majority of business for November is already complete, market players have turned their focus to business for December. Petronas in Malaysia, the company began work to restart an ethylene plant. From the perspective of buyers, the restart was likely to result in excess supply that would result in lower prices going forward, a situation that prompted buyers to step out of the market. Asian propylene prices for CFR Northeast Asia were in the range of $1,460-1,480/mt and in the Southeast Asia market in the range of $1,340-1,370/mt, both markets unchanged from a day earlier. In the FOB Korea market prices were also steady holding in the range of $1,380-1,390/mt. In the Northeast Asia market sellers maintained a bullish stance claiming that there was not an abundance of availability while buyers showed no desire to dabble in the spot market due to the narrow spread to downstream derivative prices. One trader said that consumers would not be willing to pay a penny more than $1,450/mt. But recently there has been a growing sense of tight supply and increased buying interest seen from China. And in Taiwan supply was not overwhelmingly abundant either as CPC had just begun work to restart an RFCC while FPCC was heard to be having some troubles bringing back online an naphtha cracker and an RFCC following end of planned maintenances. Amid the current situation, a deal on a CFR Taiwan basis, as was reported previously, was done at $1,475/mt. In the Southeast Asia market, business for November was for the most part complete while sellers still seemed to have some availability for November on hand. For December business, sellers expected a rise in demand as a number of derivate units, currently down for maintenance activities, are expected to be back online soon. On the other hand, Pertamina completed a maintenance on a propylene unit earlier this week and with inventories at Pertamina said to be currently high, that and the unit restart left buyers with an expectation for lower prices moving ahead. Asian butadiene prices for CFR Northeast Asia were in the range of $1,680-1,720/mt and in Southeast Asia in the range of $1,630-1,670/mt, both markets unchanged from a 7

8 day earlier. On an FOB Korea basis prices were also unchanged holding in the range of $1,650-1,690/mt. In Northeast Asia butadiene market there were no new discussions heard in the market with the outlook on prices seen as generally weak. With weakness noted in the Chinese natural rubber market, buying from derivatives makers has cooled off. Further adding a lull to the market has been the inflow of material from outside of the region from October and onwards that has created an excess of supply directed at the Chinese domestic market. One trader pointed out that in the current market that consumers were unlikely to buy unless they could procure at $1,650/mt or lower on a fixed prices basis. Some traders were said to still be holding material for November arrival and had no opportunity to sell. As for business for December, most deemed it too early to jump into business for December and stepped out of the market. In Southeast Asia, BST concluded deal on 1,500mt for loading in late Nov to early Dec although details regarding price and destination of the cargo were not known. Polymers In the polyolefin market for CFR China, talks for November cargoes were wrapped up and trading lacked momentum ahead of the weekend. Meanwhile, China s PE futures were firm compared to crude prices and this helped PE physical prices remain firm. For PP, an Indian producer offered December loading at $1,490/mt on Wednesday, as was previously reported. The market, however, turned quiet as a wait-and-see mood took hold of the market and prices held steady, supported by firm feedstock propylene prices. Furthermore, the above Indian producer and some sellers offered at $1,520 1,530/mt on a CFR Vietnam basis. Considering freight cost some players found the tradable level for CFR China at about $1,510/mt, which also underpinned the PP market, a market source said. Vinyl chloride monomer (VCM) prices on a CFR China basis were quoted in the range of $ /mt, steady from the previous day. Most players were almost finished with talks for cargoes to be loaded in the first half of November and shifted attention to material for loading in the second half of the month. Owing to the wide gap between selling and buying ideas it was difficult for discussions to firm up and move forward. Deals for November polyvinyl chloride (PVC) in the downstream market were concluded at lower prices than October. Furthermore, players foresaw that prices for December would go down. Under these situations, a majority of end-users cut buying ideas to the low $800 s/mt, a level lower than trading levels for October. Meanwhile, many sellers found difficulties in selling below $850/mt amid gains in feedstock ethylene and naphtha. According to one trader, suppliers intended to reduce production if prices lost further ground in the near future. Some end-users moved to secure cargoes for first-half November loading in a bid to maintain production, with the highest deal done in the mid $800 s/mt, a seller said. In the Southeast Asia market, negotiations for first-half November cargoes were said to have run their course. As the gap between offers and bids was wide, players appeared to prefer negotiations based on market quotations, a market source noted. Intermediates Pure terephthalic acid (PTA) prices on a CFR China basis stood in the range of $1,000-1,005/mt, while PTA prices in the Chinese domestic market were in the range of Yuan 7,300-7,350/mt, both unchanged from Thursday. Prior to the weekend, a number of players stepped out of the market on uncertainties 8

9 over the price trend after an agreement was not reached in negotiations for November Asian Contract Price of paraxylene (PX), a feedstock of PTA. Talking levels for delivery to China moved in the range of $1,000-1,005/mt, in line with a day earlier. In terms of facilities, Yisheng Petrochemical restarted operations at its 2-mil mt/year plant in Hainan in late October, and kept it running at 80% of capacity, a source said. In addition, the company was heard to be making plans to suspend operations at the No mil mt/yr plant for maintenances for 10 to 15 days in early November. Ethylene glycol (EG) prices on a CFR China basis increased by $15/mt to the range of $1,035-1,045/mt, while EG prices in the Chinese domestic market gained Yuan 50/mt to the range of Yuan 7,450-7,500/mt. The sentiment held by players was lifted thanks to many bullish factors including robust Chinese economic data, higher PTA futures and solid naphtha prices. Information that bonded cargoes inventories in China decreased by approximately 20,000mt this week appeared to also bolster the EG market. In the morning hours, a deal for delivery to China was concluded at $1,035/mt. After that, offers and bids were gradually revised up, with a deal done at $1,043/mt in afternoon trading. Naphtha Asia open-spec naphtha prices rose further by $3.5/mt from the previous day to $ /mt on Friday, boosted by successive spot purchases by major Asian petrochemical companies. During Oct 17-31, about 710,000mt had been traded for delivery to Asian petrochemical companies. Lower refinery production and reduced arbitrage cargoes flowing into the region also caused naphtha supply to tighten, thereby contributing to the gain. The January Brent futures contract slipped further 2cts/bbl from the day before to $108.96/bbl in Asia evening time. Open-spec naphtha prices for second-half December delivery were at $ /mt, for first-half January delivery at $ /mt and for second-half January delivery at $ /mt. In outright trades, cargoes for first-half January delivery was traded at $946/mt, $947/mt and $948/mt. As for the timing spread, the H2 Dec/H Jan spread was at a backwardation of $16.25/mt, widening $1.25/mt from a day earlier. The Jan Brent/H1 Jan naphtha spread was at $131/mt in favor of naphtha, widening further by $12/mt from the previous day. LPG In the CFR Far East market on Friday, propane prices softened as some sellers keen on spot sale lowered their offers. On the other hand, butane prices strengthened on the back of firm buying interest from traders. As a result, the butane/propane spread widened. CFR Japan propane prices for first-half December delivery declined $5/mt from the previous day to $ /mt while butane prices rose $15/mt to $ /mt. Prices for second-half December delivery were assessed at the same level. In the case of pure propane, supply seemed to be plentiful as a number of cargoes were seen in the market. E1 offered two 22,000mt propane cargoes for first-half December delivery, one at a premium of $64/mt to the January CP and the other at a premium of $7/mt to December CFR Far East quotes. As for buyers, Glencore bid for a 22,000mt propane cargo for first-half December delivery at a premium of $53/mt to the December CP. The bid was subsequently accepted by E1 and a deal was done. Apart from this, Mecuria bid for a 22,000mt propane cargo for first-half 9

10 December delivery and a similar cargo for second-half December delivery at a discount of $7/mt to second-half November CFR Far East quotes. Some players were also interested to do a grade swap. Shell was looking to release a 22,000mt propane and take in a 22,000mt 50:50 cargo for first-half December delivery and was willing to pay $25/mt for the swap. As for even-split cargoes, Statoil issued a buy tender for two 22,000mt 50:50 cargoes for first-half December and second-half December delivery respectively. The tender closed on Friday at 16:00 hours Singapore with offers valid through 16:30 hours on the same day. Statoil awarded one 22,000mt 50:50 cargo for December delivery based on a floating price but declined to comment on the details. Apart from this, buying interest for 22,000mt 50:50 cargoes for December delivery was seen at a premium of about $60/mt to the November CP. On the other hand, sellers seemed be targeting spot sale at a premium of $70/mt to the December CP. CFR Japan propane prices for second-half November delivery slid $5/mt to $ /mt while butane prices increased $15/mt to $ /mt. For this timing, propane avails were seen in the market. E1 offered a 22,000mt propane cargo for second-half November delivery at a premium of $7/mt to November CFR Far East quotes. On the other hand, buyers were not seen. US Summary The NYMEX crude futures fell for a third straight day on Thursday, weighed down by a fall in US equities and a strong dollar. The Dec contract was down 39cts/bbl at $96.38/bbl. The contract slipped to the lowest level since June 28. Investors moved to avert risks, putting a downward pressure on the market. Expectations of a prolonged quantitative easing in US retreated due to a statement by the Federal Reserve after the Federal Open Market Committee (FOMC). Meanwhile, the Chicago Purchasing Managers Index (PMI) in October stood at 65.9, up from 55.7 the previous month. The indicator showed an expansion of the US economy, which could prompt the Federal Reserve to start scaling down the quantitative easing earlier than expected. Under the circumstances, market players cautioned that money flows into equities and commodity markets would shrink. The Dow Jones Industrial Average fell, which also spurred selling in crude futures. In the foreign exchange market, the dollar advanced sharply against the euro, reducing the appeal of dollar-based commodities. Dec Brent on the ICE futures fell $1.02/bbl at $108.84/bbl. The Dec Brent crude s premiums against WTI narrowed 63cts/bbl at $12.46/bbl. On the other hand, December natural gas contracts added a 3.9cts loss to settle at $3.581 million British thermal units on Thursday, pushed down by bearish U.S. inventory report. The November WTI contract was traded at $96.52/bbl as of 17:00 Tokyo time on Friday, up 14cts/bbl from the previous day. USGC benzene rebounded as US contract prices was set at 410cts/gallon, higher than the spot prices on Thursday, though the contract price dropped by 27cts/gallon from the previous month. Deals were done at 410cts/gallon for November and 405cts/gallon for December for DDP (Delivered Duty Paid). In European, contract price was set at Euro 848/mt, down Euro 78/mt from the previous month. In the European spot market, November cargoes were traded at $1,155/mt and bids were raised to $1,170/mt and offers were also revised up to $1,180/mt, higher than the contract prices, afterwards. For US toluene, November cargoes were discussed in the range of cts/gallon on a FOB basis. For mixed xylenes (MX), November cargoes were talked at cts/gallon on a FOB basis. 10

11 Market News China=the government cuts controlled prices Chinese government on Friday cut domestic controlled prices for gasoline and gasoil. Prices for gasoline and gasoil fell by Yuan 75/mt or Yuan 0.06/lt, respectively. China puts October Manufacturing PMI at 51.4 The official Purchasing Manager s Index (PMI) for China in October was put at 51.4 compared with 51.1 in September, the National Bureau of Statistics (NBS) announced on Friday. The latest number is the highest for China s manufacturing sector since May of China's manufacturing PMI steadily increased for the four months to October, a sign that the country's manufacturing activities are in a steady upward trend, the NBS statement said. A reading below 50 indicates contraction, while that above 50 signals expansion. Meanwhile, China's gross domestic product (GDP) growth accelerated to 7.8% percent in the quarter to September 2013, up from 7.5% in the previous quarter, the National Bureau of Statistics (NBS) announced on Friday. Growth in the first nine months stood at 7.7% percent, in line with market expectations and above the government's full-year target of 7.5%. JX restarts 110,000b/d CDU at Mizushima B refining complex Japanese oil refiner JX Nippon Oil & Energy Co restarted the No.3 110,000b/d crude distillation unit (CDU) at the Mizushima B refining complex in Okayama prefecture, the refiner said Oct 31. The unit had been shut down since Oct 7 when a fire broke out in a furnace within close proximity to the CDU. The CDU was not damaged by the fire although JX decided to shut the CDU and related secondary units down as a safety precaution. With the restart of the Mizushima B CDU, all refineries operated by JX are currently on line. JX currently has a refining capacity of 1,605,700b/d, a figure that will drop to 1,425,700b/d on Apr 1, 2014 when the refiner decommissions the 180,000b/d crude distillation unit at the Muroran refinery in Hokkaido. Singapore crude oil throughput at 1.25-mil b/d, unchanged on week Combined crude oil throughput in Singapore was at 1,251,000b/d, unchanged from a week earlier, according to a survey conducted by RIM Nov 1. The current level puts utilization at 89.7% of the country s total refining capacity of 1,395,000b/d. Taiwan crude oil throughput at 800,000b/d, unchanged on week Combined crude oil throughput in Taiwan was at 800,000b/d, unchanged from a week before, according to a survey conducted by Rim. The figure equates to a utilization rate of 63.5% of total refining capacity of 1.26-mil b/d. CPC kept crude throughput at 300,000b/d. On Oct 18, a 100,000b/d crude distillation unit (CDU) at the 300,000b/d Dalin refinery entered a 40-day maintenance period while a 100,000b/d CDU at the 220,000b/d Kaohsiung refinery has been shut down since May. The Kaohsiung CDU will only be restarted in case of emergency. Formosa Petrochemical Co (FPCC) s crude throughput was at 470,000b/d. Nov crude throughput was planned to be at 460,000b/d as FPCC plans to decrease crude throughput gradually as maintenance on secondary units begin. Taiwan= FPCC refinery conditions: Nov 1 Formosa Petrochemical Co (FPCC) kept crude throughput at the 540,000b/d Mailiao refinery at 470,000b/d. FPCC planned Nov crude throughput at 460,000b/d. On Oct 29, the 11

12 No.2 84,000b/d RFCC restarted and has been operating at 90% while the No.1 84,000b/d RFCC was also running at 90%. On Friday, a 36,000b/d delayed coker entered a 20-day maintenance. Meanwhile, the No mil mt/year naphtha cracker restarted on Oct 31 while both the No.1 700,000mt/year and the No mil mt/year naphtha crackers were in full-operation. Taiwan CPC crude throughput at 330,000b/d, unchanged on week Crude throughput at CPC in Taiwan was at 330,000b/d, unchanged from a week earlier, according to a survey conducted by Rim Oct 31. On Oct 18, a 100,000b/d crude distillation unit (CDU) at 300,000b/d Dalin refinery entered a 40-day maintenance period while a 100,000b/d CDU at the 220,000b/d Kaohsiung refinery has been shut down since May. The CDU will only resume in case of emergency. On Oct 18, a 30,000b/d RDS unit at the 200,000b/d Taoyuang refinery entered a 40-day maintenance period. In addition, at the 220,000b/d Kaohsiung refinery a 30,000b/d RDS has been shut down. At the Dalin refinery, a 30,000b/d reformer will have a two-month-maintenance while on Oct 28 at the same location an 80,000b/d RDS was restarted. Operation rate of the RDS was at around 70%. As for CPC s petrochemical plants, the No.4 385,000 mt/year naphtha cracker entered a three-month-maintenance on Oct 10. The No.5 500,000 mt/year and the No ,000 mt/year naphtha crackers were operating at 90% of capacity. ExxonMobil Q3 earnings drop 18% on year, liquids/gas output up 1.5% US oil and gas major ExxonMobil Corp reported earnings of $7.87-bil for the quarter to September 2013, down 18% from the corresponding period a year earlier, the company announced Oct 31 in its third quarter 2013 results. Cash flow from operations and assets sales totaled $13.6-bil down from $14.0-bil in the same quarter last year while overall sales revenue and other income totaled $112.4-bil, down from total revenue and income of $115.1-bil a year earlier. ExxonMobil attributed the drop in earnings to weaker refining margins as a result of increased industry capacity that negatively impacted the company s downstream earnings. Production for the quarter was 4.02-mil barrels per day of oil equivalent, up 1.5% from a year earlier. In breakdown of the oil equivalent figure, third quarter natural gas production totaled bil cubic feet per day, down 1.3% from Q while liquids production increased 3.9% on year to 2.19-mil b/d. On a global basis, ExxonMobil refining operations processed 4.85-mil barrels of crude oil per day, down 1.7% from volumes processed during the same period in Royal Dutch Shell Q3 profits plunge 31% on year, liquids/gas output down 2% Royal Dutch Shell reported earnings of $4.2-bil for the quarter to September 2013, down 31% from the corresponding period a year earlier, the company announced Oct 31 in its third quarter 2013 results. Cash flow from operating activities totaled $10.4-bil down from $9.5-bil in the same quarter last year while overall sales revenue and other income totaled $116.5-bil, up from total revenue and income of $112.1-bil a year earlier. Shell attributed the year-on-year quarterly declines to significantly weaker industry refining conditions, increased upstream operating expenses, production volume setbacks from maintenance and asset replacements, a challenging operating environment in Nigeria and lower dividends from an LNG venture. Production for the quarter was 2.93-mil barrels per day of oil equivalent, down 2% from a year earlier. The renewal of the Rim Trading Board Rim Intelligence Co. released the renewed Rim Trading Board. Through the new trading 12

13 board aimed at boosting the price transparency, market players will be able to directly insert bids/offers and spot deals for all of oil and gas products handled by Rim daily reports. Users can now register with RIM and post their bids/offers etc free of charge. For personal computers, prices for crude, petroleum products, LPG, LNG and petrochemical products can be entered. In addition, RIM has launched the board for smart phones both in the Android version and the iphone version, which is only for domestic oil products. If you have any questions, please contact: RIM Intelligence TEL: Notice of Rim Data File Renewal We at Rim Intelligence will revamp the Rim Data File from June. Besides the existing crude and petroleum products data, we plan to make the data file more comprehensive by adding LPG, LNG and petrochemical data as well. We will also include tables and graphs for easy reference. We believe that with more items added, the revamped Data File will find a wider scope of use. For inquiries, please contact the Rim Data File team. Notice We at Rim Intelligence are pleased to announce that, from Aug 2, we will be starting a new category in our online news service Asia Energy Links (AEL) called Asian Viewpoints, which features weekly news columns from our overseas offices in Singapore, China, and India. These articles are written by representatives in our overseas offices and are based on happenings in the countries and surrounding areas where they are located, which may have direct or indirect impact on the energy market. The columns will be uploaded once a week and can be accessed for free even by non-subscribers of our AEL service. We hope that our readers would find these unique perspectives from our overseas offices insightful and useful for their businesses. RIM reports are copyrighted publications. No portion of the reports may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed not only to parties outside the organization of the subscriber but also to other departments or branch offices within the same organization as the subscriber. If copyright infringements are found, a fine will be imposed in addition to legal actions being taken. While information in the reports is expected to be accurate, RIM bears no responsibility for any consequences arising from the subscriber's use of such information. Further, if events beyond our control such as natural disasters or unforeseen circumstances are to occur or likely to occur, giving rise to operational problems, publications may be halted temporarily. (C) 2011 RIM INTELLIGENCE CO. --EDITORIAL AND SUBSCRIPTION INQUIRY: Tokyo--Tel: (81) Fax:(81) info@rim-intelligence.co.jp Singapore--Tel (65) Beijing--Tel (86) Fax (86) Shanghai Tel (86) Fax (86) India--Tel: (91)