Prices of Inorganic Chemicals Changed Differently

Raw salt

China's raw salt market price remained relatively stable in July
2007. The average ex-work prices of raw salt in Hebei province
and the south of Liaoning province were RMB150/t and RMB165/t
respectively. The production of raw salt was normal in North
China, Northeast China, and East China, while in South China and
Central China, floods contributed to the drastic output
decrease.
   In August 2007, due to the decreased output of raw salt in
some local regions and the increased demand for raw salt in
downstream sectors including caustic soda and soda ash, the
price of raw salt will fluctuate. Even if there is less
possibility for the market price of raw salt to climb, the
situation of oversupply in domestic market will be changed
considerably.

Caustic soda

In July 2007, due to the decreased demand in downstream sectors,
the capacity expansion in North China and increased sales in
domestic markets, China's prices of caustic soda dropped
considerably.
    In East China the trading price of ionic membrane caustic
soda was RMB480-530/t by the end of July 2007, compared to
RMB530-600/t at the end of June 2007.
    In August 2007, due to capacity expansion, the output of
caustic soda is expected to increase steadily, and the price of
caustic soda will decrease slightly.

Soda ash

In July 2007, the export rebate for soda ash was reduced to 0%,
however, due to the constant demand growth in downstream sectors
and the price rise of soda ash in the international market, the
domestic soda ash market did not fluctuate greatly and the price
of soda ash remained relatively stable. In East China and South
China, the average ex-work price of heavy soda ash was RMB1 600/t,
almost the same as in June 2007.
   In August 2007, the demand for soda ash in downstream sectors,
including construction, glass, non-ferrous metals and textiles,
will increase further; however, due to the decreased output
caused by the overhaul of some soda ash producers, China's price
of soda ash will still be stable. But the export price of soda
ash will probably climb considerably, due to the price rise of
crude oil in the international market.

Liquid chlorine

In July 2007, China's price of liquid chlorine changed
differently in different regions. In East China, due to a rising
demand for liquid chlorine in downstream sectors, the price of
liquid chlorine increased to RMB1 450-1 600/t by the end of July
2007. In South China, the demand for liquid chlorine was slack,
the price decreased notably, with few trading actions. In
Central China the supply and demand was basically balanced, and
the prices remained stable.
   In August 2007, liquid chlorine is expected to be in
oversupply in some local regions including East China, and the
demand for liquid chlorine in downstream sectors such as
pesticides and papermaking will be stable. The price of liquid
chlorine therefore will drop slowly.

Sulfur

In July 2007 the import price of sulfur continued to increase
and the demand for sulfur in domestic markets rose further,
China's price of sulfur therefore increased constantly. Some
local sulfur producers began to worry that the downstream sector
could not afford the high price of sulfur because some
sulfur-based sulfuric acid producers in Fujian province
suspended production recently.
   By the end of July 2007, sulfur was traded at RMB1 950-2 060/t
in South China, compared to RMB1 450-1 700/t a month before, and
in North China, the bulk trading prices of sulfur rose to RMB1
950-2 150/t.
   In August 2007, China's output and imported amount of sulfur
will be stable; however, due to the price rise of imported sulfur,
China's price of sulfur will rise slowly.

Sulfuric acid

In July 2007, due to the demand rise for sulfuric acid in
downstream sectors and increase of production cost caused by the
price rise of imported sulfur and local pyrite, the price of
sulfuric acid increased rapidly.
   In July 2007, the average market price of sulfuric acid
reached RMB500/t, a rise of RMB100/t over that in June 2007.
   In August 2007, the price of raw materials including sulfur
and pyrite is expected to increase further and the demand for
sulfuric acid in downstream sectors such as chemical fertilizers,
pesticides and textiles will rise constantly. The price of
sulfuric acid will therefore continue to climb.