Organic Chemicals Went down

Acetic acid

In early July 2007, due to the demand shrink for acetic acid in
downstream PTA sector, the prices of acetic acid decreased. In
Jiangsu province of East China, the market price of acetic acid
dropped to RMB6 800/t.
    In mid-July 2007, because large amount of imported goods
entered into the Chinese market and market demand in downstream
sectors still shrank, the prices of acetic acid dropped
constantly. In East China and South China, acetic acid was traded
at RMB6 400-6 450/t and RMB6 400-6 500/t respectively.
    The export of acetic acid will be affected due to the
lowering export rebates and RMB appreciate, and considering the
capacity expansion and demand decrease in downstream sectors,
the prices of acetic acid will continue to decrease.

Phthalic anhydride

In early July 2007, due to the demand slack in downstream sectors,
the price of phthalic anhydride went down. In East China, the
price decreased by RMB100/t to RMB10 300-10 400/t.
    In mid-July 2007, the price of phthalic anhydride increased
further to RMB10 500/t in response to the price rise of crude
oil. However, the demand for phthalic anhydride did not increase
synchronously and some phthalic anhydride producers including
CNPC Jilin Petrochemical Co., Ltd., Sinopec Zhenhai Refining and
Chemical Co., Ltd. and Sinopec Yangzi Petrochemical Co., Ltd.
lowered their ex-work prices, the market price of phthalic
anhydride gradually tended to be stable.
  Due to the tense supply and slack demand in domestic market,
the price of phthalic anhydride will probably be stable.

Maleic anhydride

In early July 2007, due to the low operating rate of downstream
unsaturated polyester resins (UPR) and the oversupply of maleic
anhydride in domestic market caused by the export decrease, the
price of maleic anhydride continued to drop.
    In mid-July 2007, maleic anhydride producers in Shanxi
province lowered their ex-work prices, the market price of
maleic anhydride therefore went down rapidly.
    Because the price of coke benzene was basically stable, the
margin of maleic anhydride producers was greatly narrowed.
   As of July 20th, 2007 the bulk trading prices of maleic
anhydride dropped to RMB8 100-8 200/t and RMB8 600-8 700/t
respectively in Shanxi province and East China.
   In August 2007, the export of maleic anhydride is expected
to decrease because China implements the policy of lowing export
rebates and the demand for maleic anhydride will continue to be
slack. However, due to the high price of coke benzene, the price
of maleic anhydride will be stable or decrease slightly.

Methanol

In early and mid-July 2007, the demand for methanol in downstream
sectors was slack, however, due to the tense supply in domestic
market, the prices of methanol began to increase.
    In mid-July 2007, the bulk trading prices of methanol
increased to RMB2 330-2 400/t and RMB2 400-2 450/t respectively
in East China and South China, and the methanol producers in
Shijiazhuang of Hebei province and Hennan province slightly
lifted their ex-work prices to RMB2 100/t and RMB2 150/t
respectively.
   The supply is tense in some local regions, however, because
the demand for methanol in major downstream sector -
formaldehyde will drop considerably, the price of methanol will
hover at present level.

Bisphenol A

In July 2007, due to the unduly price drop in earlier months and
the purchase increase of bisphenol A (BPA) in downstream plants,
the price of bisphenol A rebounded.
   As of July 17th, 2007 the bulk trading prices of BPA reached
RMB18 000-18 200/t in East China, an increase of RMB500-700/t
over those in early July 2007.
   In August 2007, due to the tense supply in domestic market
and the slack demand in downstream sectors, the price of BPA will
fluctuate slightly.