Acetyls Chain. Tecnon OrbiChem Marketing Seminar at APIC 2012 Kuala Lumpur, 17 May William Bann, Tecnon OrbiChem

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1 Acetyls Chain Tecnon OrbiChem Marketing Seminar at APIC 2012 Kuala Lumpur, 17 May 2012 William Bann, Tecnon OrbiChem

2 WORLD ACETIC ACID SUPPLY & DEMAND Consumption Million Tons 20% Capacity Million Tons 16% 8% 37% 15% 13% 50% 15% 9% 3% 10% China Middle East & Africa South & Southeast Asia Northeast Asia East & West Europe North & South America 4%

3 WORLD ACETIC ACID SUPPLY & DEMAND Million Tons 25 Capacity 20 90% O/R Effective Capacity Demand

4 ACETIC ACID PRODUCERS CAPACITY 1,000 Metric Tons 4,000 3,500 3,000 2,500 2,000 1,500 1, BP Celanese Daicel Eastman Jiangsu Sopo Kuraray LyondellBasell Reliance Sipchem Shanghai Wujing Yangkuang Cathay

5 ACETIC ACID/ACETYLS CHAIN Natural Natural Gas Gas Coal Coal Methanol Methanol Ethylene Ethylene Acetic Acetic Acid Acid MCAA MCAA Vinyl Acetate Vinyl Acetate Monomer Monomer PTA PTA Acetic Acetic Anhydride Anhydride Ester Ester Solvents Solvents Ag/Pharma, Consumer Goods Polyvinyl Polyvinyl Acetate Acetate Polyester/ Polyester/ PET Resin PET Resin Acetate Flake/ Acetate Flake/ Acetate Tow Acetate Tow Ethyl Acetate Ethyl Acetate Construction, Paper, Packaging Polyvinyl Polyvinyl Alcohol Alcohol Textiles, Auto, Packaging Consumer Goods, Textiles, Ag/Pharma Butyl Butyl Acetate Acetate Polyvinyl Polyvinyl Butyral Butyral EVA/VAE EVA/VAE Automotive, Solar Adhesives, Film, Solar, Coatings Paints, Coatings, Automotive, Consumer Goods, Cosmetics

6 THE ACETYLS MARKET VAM (34%) PTA (20%) Esters (22%) Anhydride Others Celanese, Dow, Du Pont, LBI, Ineos, Sipchem, Sinopec, Dairen BP, Mitsubishi, Sinopec, Alfa Group, M&G, Reliance, Formosa Celanese, Dow, Eastman, Oxea, Ineos, Jiangmen Handsome, Sopo Eastman, Rhodia, Celanese, BP Sipchem, Jubilant, Daicel, Nantong CABB, Akzo Nobel, Dow, Lonza, Kemira, Syngenta PVAC/PVOH Fibres, PET Coatings Flake/Tow Various Kuraray, Sekisui, Solutia, Vinavil, ExxonMobil, HB Fuller, Clariant, Chang Chun, Arkema Reliance, M&G, Formosa, Far Eastern Group, Toray, Zhejiang Tongkun Akzo Nobel, Henkel, Flint Group, BASF, Nippon Paint, Sherwin- Williams Eastman, Rhodia, Celanese, China Nat l Tobacco, Sinosweet, RJR, Warwick, Daicel Food ingredients, pharmaceuitcals, agriculture, cosmetics

7 MAJOR ACETYLS END-USE MARKETS Construction (Paints, Coatings, Adhesives, Glass Interlayers) -- Housing construction has not fully recovered from the recession. Vinyls systems gaining popularity in paints due to high acrylate prices. Automotive (Coatings, Glass Interlayers) Improving automobile sales boosted demand to OEMs and for after-market applications. Fuel prices will remain high. Auto part shortages could impact production mid Consumer Goods (PET bottles, Cosmetics, Packaging) Consumer goods demand has been steady, but GDP growth rates slowed in many countries during Q Unemployment, Eurozone problems possible headwinds. Pharmaceuticals Annual global market growth expected to remain ~7-10%. Aging population, emerging markets supporting continued growth. Solar (Interlayers, Encapsulants) -- Solar cell markets collapsed in Q4 2011, affecting EVA/PVB film demand, but these are growth markets in the longterm. Celanese has patented technology to produce ethanol from coal and/or natural gas. Celanese will install this technology as a bolt-on to its Nanjing acetic acid plant, thus reducing acetic acid production at the facility.

8 US ACETIC ACID MARGIN over 0.55 x METHANOL $/ton $/MMBtu USG Acetic Acid NYMEX Natural Gas 0.55 x Methanol

9 ACETIC ACID CAPACITY BY FEEDSTOCK METHANOL DOMINATES 1,000 Metric Tons 25,000 20,000 15,000 10,000 5, ,244 ktpa High-cost capacity Production All Others Acetaldehyde Ethanol Coal Gasification Other By-Product PVOH By-Product MEOH

10 China APIC 2012 ACETIC ACID REGIONAL NET TRADE 1,000 Metric Tons 800 Northeast Asia ME & Africa W Europe S America S & SE Asia E Europe N America

11 CONCLUSIONS Global acetic acid market demand was sluggish in Q1 2012, and many raw material prices showed little evidence of decline. Major suppliers cut operating rates due to poor economics. Production outages were widespread in April. China s acetic acid capacity builds are slowing in the near-term, but new plants are planned for India and possible expansions are being studied in the US due to shale gas. The global acetic acid market will remain over-supplied. Acetic acid demand is spread across various downstream industries, some of which will maintain steady growth rates in the medium-term. Over-supply in some downstream sectors must be addressed. Methanol will remain the dominant feedstock for acetic acid globally. Acetic acid margins will be influenced by alternative downstream methanol uses such as fuel (DME, gasoline blending) and as a feedstock for olefins. Acetyls industry margins and utilisation rates were under pressure in H1 2012, and market discipline is needed if recovery is to occur in the short-term.

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