PET Outlook. Chase Willett Director Polyester & Polyester Raw Materials CMAI USA. Houston London Singapore Dubai 2004 Plastic Processors Conference

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1 PET Outlook Chase Willett Director Polyester & Polyester Raw Materials CMAI USA

2 Global PET Demand Americas Asia Europe, MDE & Africa % 45% 34% Tot Dem : 5.6 Mil Tons 24% 39% 37% Tot Dem : 9.7 Mil Tons 26% 39% 35% Average Annual Growth % 81 KMT % 145 KMT Tot Dem : 14.9 Mil Tons

3 Polyester Bottle Resin Demand Growth Asia less China 15% Americas 28% China 16% Europe/Middle East/Africa 41%

4 Thousand Metric Tons 6 Americas PET Demand U.S. South America Mexico Canada

5 United States PET Demand Thousand Metric Tons Food Alcohol CSD Dairy Water, Isotonics Pharmaceutical Cosmetics Other PET

6 Million Metric Tons 25 World PET Demand Percent Operating Rate North America Europe Asia South America Middle East/Africa Operating Rate Total Capacity

7 Percent 1 PET Regional Operating Rate World North America West Europe Northeast Asia

8 Asia PET Supply/Demand Million Tons 9 China Demand 8 Non-China Asia Demand 7 Capacity Operating rates million tons of Surplus 5.5 million tons of Surplus Op. Rate, %

9 China PET Supply/Demand Thousand Tons Domestic Demand Capacity Operating rates 1. million tons of Surplus Op. Rate, % 8 3. million tons of Surplus

10 The China Advantage Construction Cost per Annual Ton of Output After Tax Annual Cash Flow To Generate Reinvestment Per Ton of Output The West $44 - $55 $11 - $138 Asia $4 - $55 $72 - $99 China $27 - $35 $49 - $59 How can they do this?

11 The China Advantage Low cost domestic technology Nearly 1% local fabrication 1% domestic erection

12 Dollars per Ton U.S./Asia Price Comparison U.S. Dlvd. Discounted Asia Production Cash Cost Asian Discount to U.S. Importation Costs

13 U.S. PET Import Status Thousand Tons - Monthly Thousand Tons - Cumulative 3 6 Asia Canada Mexico Cumulative Total Imports - May-3 Dollars per Ton Aug-3 Nov-3 Feb U.S. - Asia Price Differential

14 2 1 - (1) U.S. PET Resin Net Trade Through March 24- Adjusted and Seasonalized -- Metric Tons 3 Net Exports (2) (3) Net Imports (4) Canada Mexico Asia Europe South America Middle East & Africa

15 U.S. PET Resin Imports from Asia Through April 24 - Adjusted and Seasonalized -- Metric Tons GSP Thailand Indonesia India Taiwan Korea South Malaysia Other ASP

16 North American Convertible Capacity Solid Stating Total Melt Convertible Kosa Wellman Nanya DAK Total Convertible Capacity 167

17 Raw Material Utilization Per Unit of PET.58 Paraxylene (PX).22 Ethylene O 2 + O 2 Ethylene Oxide (EO) + + H 2 O.86 Terephthalic Acid (PTA) + Ethylene Glycol (MEG or EG).36 Polyethylene Terephthalate (PET)

18 6 World Polyester Melt Demand Forecast Million Tons Fiber Bottle Resin Other

19 Global Polyester Raw Material Position Thousand Tons 6 % Operating Rate Polyester Melt Demand Growth PX Cap Growth in Poly Equiv. MEG Cap Growth in Poly Equiv. PX Operating Rate MEG Operating Rate

20 Thousand Tons Global Polyester Growth Dollars per Ton Margin Polyester Melt Demand Growth MEG Growth in Polyester Equiv. MEG Margin PX Growth in Polyester Equiv. PX Margin

21 Who Runs Out First? Global Polyester Chain Various Polycondensation Rates 25 9% % 93% 92% 97% 95% 15% 13% 93% 98% 98% 1% 99% 111% 13% 11% 15% Utilization Rates, % 15% 11% 1% 9% 24 MEG PX PTA MEG PX PTA MEG PX PTA 8% 75% Polyester 8% Polyester 85% Polyester Forecast Global Polycond OR for 24 & 25 ~75% Seasonal variation & volatility potential +/- 5%

22 Dollars per Ton 16 U.S. PET Economics Paraxylene PTA MEG Conversion PET Price PET Margin

23 Dollars per Ton 2 U.S. PET Prices Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Paraxylene PTA MEG Conversion PET Price PET Margin

24 Million Metric Tons 5. North America PET Demand Percent Operating Rate U.S. Mexico Canada Operating Rate Total Capacity