Marc Laughlin Associate Director, Methanol & Acetone for the Americas June 5, 2013

Methanol Marc Laughlin Associate Director, Methanol & Acetone for the Americas June 5, 2013

Value Chain - Methanol Feedstocks Product Derivatives Products / End Uses Sectors Natural Gas Coal Methanol Formaldehyde Acetic Acid MMA MTBE DME Gasoline MTO/MTP Biodiesel UF/PF Resins Polyacetals MDI VAM Acetate Esters Acetic Anhydride PTA Gasoline Additive Olefins Fuels Construction Automotive Electronics Appliances Paints/ Coatings Insulation Pharma Packaging (PET Bottles) Solvents

World Methanol Supply & Demand Million Metric Tons 180 Operating Rate 100% 80% 60% 40% 20% 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 0% Demand Total Capacity Operating Rate

160 140 120 100 Global Methanol Nameplate vs. Effective Capacity Million Metric Tons 180 80 60 40 20 0 Operating Rate 90% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 80% 70% 60% 50% 40% 30% 20% 10% 0% Global Capacity Total Operating Rate Effective Global Capacity Effective Global Operating Rate

Global Capacity Expansion & Closures Million Metric Tons 18 14 10 6 2-2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 N. America S. America Europe Africa/Middle East Indian Subc. Northeast Asia Southeast Asia 5

Global Methanol Demand Growth 2012 Methanol Demand By End Use 2017 Methanol Demand By End Use MTO/MTP 8% Solvents 4% DMT/Others 6% Formaldehyde 29% Solvents 3% DMT/Others 4% Formaldehyde 20% Chloromethanes 3% Methylamines 3% Dimethyl Ether 13% MTO/MTP 38% Acetic Acid 10% Acetic Acid 6% MTBE/TAME 6% Methyl Methacrylate 1% Gasoline/Fuel 13% Methyl Methacrylate 2% Demand = 63 Million Metric Tons MTBE/TAME 9% Chloromethanes 1% Methylamines 2% Dimethyl Ether 8% Gasoline/Fuel 11% Demand = 120 Million Metric Tons 6

World Methanol Demand Forecast Million Metric Tons 180 0 Operating Rate 100% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 DMT/Others Solvents MTO/MTP Chloromethanes Methylamines Dimethyl Ether Gasoline/Fuel Methyl Methacrylate MTBE/TAME Acetic Acid Formaldehyde Operating Rate 90% 80% 70% 60% 50% 40% 30% 20% 7

Major Methanol Derivatives World Methanol Consumption Formaldehyde 30% DMT 0.9% Acetic Acid 9.9% MTBE/TAME 9.7% Typical Derivative End Uses UF/ PF: Adhesives for Wood products (fiberboard, plywood, particleboard. Polyacetyl resins:thermoplastic engineering resins in automotive and industry MDI: Flexible & rigid foams (polyurethanes) for appliances and automotive, construction BDO: elastomers and electronics PET for containers PETG for thick sheet- display cases, large signs Films & textile fiber Solvent for oxidation of paraxylene to PTA Films for packaging and adhesives caulks to textile adhesives LCD s; filter tow for cigarettes NAM Growth with gasoline is flat while capacity is expanding for increased exports of MTBE. Global gasoline demand growth is 2.0% in 2012 and 1.1% in 2013 MMA 1.9% Construction components- skylights & signs Automotive demand for acrylic sheets and coatings Gasoline/Fuel 13.6% Biodiesel driven by U.S. RFS-2 regulations DME 9.7% Diesel fuel substitute Methylamines 3.4% Pesticides & solvents Growth for Silicone intermediates for elastomers, fluids, and Chloromethanes 2.5% solvents Construction demand for Methylene chloride for paint removers MTO/MTP 2012, IHS Inc. No portion of this presentation may be reproduced, 8.2% reused, or otherwise Ethylene distributed in and any form propylene without prior for written plastics consent. Solvents 4.7% Windshield washer fluid and oil drill anti-freezing fluid

160 140 120 100 World Methanol Demand By Region Million Metric Tons 180 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 N. America S. America Europe CIS & Baltics Africa/Middle East Indian Subc. NE Asia SE Asia 9

Global Methanol Demand China vs. ROW Million Metric Tons 140 120 China Demand AAGR 2007-2012: 23% ROW Demand AAGR 2007-2012: 0.45% China Demand AAGR 2012-2017: 22% ROW Demand AAGR 2012-2017: 3% 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Demand - ROW Demand - China 10

World Methanol Consumption Million Metric Tons 140 120 100 80 60 40 20 Fuel Demand AAGR 2007-2012: 15% MTO/MTP Demand AAGR 2007-2012: 0% Other Demand AAGR 2007-2012: 3% Fuel Demand AAGR 2012-2017: 7% MTO/MTP Demand AAGR 2012-2017: 56% Other Demand AAGR 2012-2017: 5% Percent Fuel Use 70 60 50 40 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 Demand - Other Demand - Fuel Demand - MTO/MTP Percent Fuel Use Merchant Methanol 11

Methanol & MTO/MTP Million Metric Tons 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Integrated Methanol Capacity MTO/MTP Merchant Methanol Demand 12

West Europe

West Europe Methanol Supply & Demand Million Metric Tons Operating Rate 10 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Production Domestic Demand Total Capacity Operating Rate 14

West Europe Demand Forecast Million Metric Tons 10.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Operating Rate 100% Formaldehyde Acetic Acid MTBE/TAME Methyl Methacrylate Gasoline Fuel Dimethyl Ether Methylamines Chloromethanes Solvents DMT/Others Operating Rate 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Middle East

Middle East Methanol Supply & Demand Million Metric Tons Operating Rate 30.0 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0.0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Production Domestic Demand Total Capacity Operating Rate

Asia

Southeast Asia Methanol Supply & Demand Million Metric Tons 7.0 Operating Rate 100% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 90% 80% 70% 60% 50% 40% 30% Production Domestic Demand Total Capacity Operating Rate

Southeast Asia Methanol Demand Forecast Million Metric Tons 3.5 Operating Rate 100% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Formaldehyde Acetic Acid MTBE/TAME Methyl Methacrylate Gasoline/Fuel Dimethyl Ether Solvents DMT/Others Operating Rate 90% 80% 70% 60% 50% 40% 30%

Northeast Asia Methanol Supply & Demand Million Metric Tons 125.0 Operating Rate 100% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 90% 80% 70% 60% 50% 40% 30% Production Domestic Demand Total Capacity Operating Rate

Northeast Asia Methanol Demand Forecast Million Metric Tons 125.0 Operating Rate 100% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Formaldehyde Acetic Acid MTBE/TAME Methyl Methacrylate Gasoline/Fuel Dimethyl Ether Methylamines Chloromethanes MTO/MTP Solvents DMT/Others Operating Rate 90% 80% 70% 60% 50% 40% 30%

Americas

South America Methanol Supply & Demand Million Metric Tons 16.0 Operating Rate 100% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 90% 80% 70% 60% 50% 40% 30% 20% Production Domestic Demand Total Capacity Operating Rate

South America Methanol Demand Forecast Million Metric Tons 3.0 Operating Rate 100% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 90% 80% 70% 60% 50% 40% 30% Formaldehyde MTBE/TAME Methyl Methacrylate Gasoline/Fuel Methylamines Solvents DMT/Others Operating Rate

North America Energy Price Trends Dollars Per MMBtu Gas as % of Crude, Btu Basis 20 60% 18 16 50% 14 40% 12 10 30% 8 6 20% 4 10% 2 0 0% 07 08 09 10 11 12 13 14 15 16 17 Crude (WTI) Natural Gas Gas as % of Crude

North America Methanol Production By Feedstock Forecast Million Metric Tons 10 8 6 4 2 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Natural Gas Coal Feedstock Petcoke 27

North America Methanol Demand Forecast Million Metric Tons 10 Operating Rate 100% 80% 60% 40% 20% 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Formaldehyde Acetic Acid MTBE/TAME Methyl Methacrylate Gasoline/Fuel Methylamines Solvents DMT/Others Operating Rate 0% 28

North America Methanol Net Trade Million Metric Tons 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 Percentage 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2022 Imports Exports Net Imports as % of Total Supply 0%

Methanol Regional Net Trade 1461 1128 1934 874 1052 954 1407 3517 5397 7692 6264 4299 5000 4620 8127 2817 2054 2796 11768 11727 9708 1006 1141 1093 8832 15684 18430 1254 2129 2445 2012 2015 2017 Thousand Metric Tons NAM SAM NEA SEA ISC MDE AFR WEP CEP CIS US China Net Exports - Thousand Metric Tons 2012 (5397) 6264 (8832) 1254 (1006) 9708 2054 (4299) (874) 1128 (5206) (4375) 2015 (3517) 7692 (15684) 2129 (1093) 11768 2817 (4620) (954) 1461 (3250) (10771) 2017 (1407) 8127 (18430) 2445 (1141) 11727 2796 (5000) (1052) 1934 (1100) (13312)

Price

2013 Methanol Industry Production Cash Cost Dollars Per Metric Ton 500 2013 Global Methanol Demand = 67.3 MMT China NG South America, CIS & Baltic Advantaged Gas (China Coking, Saudi Arabia, Iran) West Europe China NG & Coal 0 0 110 Cumulative Production Capacity, Million Metric Tons 32

Methanol Global Price Determination Mechanism - Middle East Netback to the West North America ME price to North America = China price + Freight differential + Duties South America South American producers price to N. America at a price to discourage ME imports to N. America West Europe ME Price to Europe = China price + Freight differential + duties + handling W. European producers marginal cost may force upward adjustment Middle East Global price taker Balances exports to regions for highest netback (NB) NB ME China = China price less freight ME to China Incremental cost to deliver to WE vs. China Incremental Cost to deliver to NA vs. China China Global marginal cost production block Global price setter The global equilibrium price setting mechanism is driven by Middle East producers seeking the optimum netback value. Regional adjustments may occur due to transient regional Supply/Demand imbalances.

Methanol Annual Regional Price Comparison Dollars Per Metric Ton 600 550 500 450 400 350 300 250 200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U.S. Contract Net Trans. U.S. Spot WEP Contract T2 WEP Spot T1 WEP Spot T2 NEA Spot 34

Price Going Forward

2013 Methanol Industry Production Cash Cost Dollars Per Metric Ton 500 2013 Global Methanol Demand = 67.3 MMT China NG South America, CIS & Baltic Advantaged Gas (China Coking, Saudi Arabia, Iran) North America West Europe China NG & Coal 0 0 110 Cumulative Production Capacity, Million Metric Tons 36

Methanol Global Price Determination Mechanism A Shift in the Flow? North America Potential market competition and import displacement leads to modestly lower prices West Europe Maintains ME Price to Europe = China price + Freight differential + duties + handling W. European producers marginal cost may force upward adjustment Middle East China Global marginal cost production block Global price setter South America Global price taker Balances exports to regions for highest netback (NB) Traditionally swing supplier, however.. Lower flexibility going forward NB ME China = China price less freight ME to China The global equilibrium price setting mechanism is driven by Middle East producers seeking the optimum netback value. Regional adjustments may occur due to transient regional Supply/Demand imbalances.

Methanol Annual Regional Price Comparison Dollars Per Metric Ton 600 550 500 450 400 350 300 250 200 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U.S. Contract Net Trans. U.S. Spot WEP Contract T2 WEP Spot T1 WEP Spot T2 NEA Spot 38

Equivalent Price of Energy Products Valued as Methanol Dollars Per Metric Ton Methanol 500 450 400 350 300 250 200 150 100 50 Industry Spot Methanol Price 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 39 Methanol Gasoline No. 2 Oil Propane Crude Oil

Developments

Developments Will methanol capacity additions spur derivative demand growth? Acetic acid or its derivatives Fuels Biodiesel Direct blending Maritime MTO

Five Key Points for the Methanol Industry Traditional methanol derivative demand tracks GDP on average 1.7x Conventional derivatives drive base demand Fuels have potential for step-out growth Energy differentials drive fuels applications Non integrated MTO/MTP units bring potential balance shocks Economic volatility creates price volatility through end-use demand patterns, inventory management, and credit availability Process technology advancing with feedstocks diversity, increased scale, yield improvement, and integration options Feed stock dynamics affect supply location End-use options for feedstocks Sustainability criteria for option selection