Organic Chemicals Remain Bullish

Acetic acid    

In mid-March 2007, large amount of imported products entered the
Chinese market and market tense was partially mitigated, however,
the supply of acetic acid was still in surplus. As of the end
of March, the mainstream ex-work price of acetic acid was
basically stable and maintained at around RMB6 300 per ton. Since
April 2007, the imported amount reduced, the supply was tenser,
and the acetic acid producers lifted the ex-work prices in
succession. As of April 7th, the mainstream ex-work price of
acetic acid reached RMB6 400-6 500 per ton.
    With the increase of operating rate, the supply will
increase relatively, the growth of demand will slow down, and
the supply gap will be narrowed. It is expected that the price
of acetic acid will be unlikely to increase.

Butanol/octanol

Since April 2007, the prices of butanol/octanol fluctuated at
high level, and due to the low operating rate of downstream butyl
acetate and DOP (dioctylphthalate) plants, expected brisk
demand did not come. In mid- April, local manufacturers in China
lifted the ex-work prices, but the sales still shrank.
    In mid-April, the ex-work price of n-butanol in Sinopec Qilu
Petrochemical Co., Ltd. was RMB14 200-14 400/t, showing an
increase of RMB100/t over that in early April, and the ex-work
price of octanol rose by RMB100/t to RMB14 900-15 100/t.
    In May 2007, due to the overhaul of butanol/octanol unit in
CNPC Jilin Petrochemical Co., Ltd., the supply of
butanol/octanol will be further tense, and the market prices of
butanol/octanol will increase relatively.

Maleic anhydride

In early April 2007, due to the high price of upstream coke
benzene, low operating rate of downstream unsaturated polyester
resins, and the shrink of export, the sales of maleic anhydride
dropped and the price was basically stable. In mid-April, the
production and transportation of maleic anhydride producers in
Shanxi province was restrained by the environmental policies.
The supply therefore was tense, and the trading prices rose
RMB100-200/t. However, the demand of downstream unsaturated
polyester resins did not increase drastically, the price of
maleic anhydride therefore was stable afterward.
   In mid-April, the mainstream offer prices of maleic anhydride
were RMB9 000-9 100/t in East China and South China.
    With the approaching of long holiday (May 1st-May 7th), the
downstream producers would increase the inventory, and the price
of maleic anhydride will increase slightly.