Polyester Market Summary (May 1-15, 2011)

● PTA basically kept shivering down in weakness in the first half of May and saw two sharp decreases in early May and Mid-May. Based on the sharp decrease, small rebounds occurred at times. Relatively, MEG market only shivered slightly. On one hand, affected by weak macroeconomics and PTA futures, MEG market weakened somehow. But on the other hand, with the support of some offers being taken and predicted tight supply in later period, the prices did not collapse sharply. Suppliers showed little intention to sell goods at low levels and trading volume was not large.

● PET fiber chip market continued to weaken in the past two weeks. Downstream plants purchased small amounts. Trading sentiment was plain.

● As feedstock market weakened, PFY prices followed down moderately with a slower speed and smaller range. Structural divergence occurred during the downtrend. Inventory and capital issues still weighed on PFY market.

● Direct-spun PSF market speeded up to slip in H1 May, with price drops range at 650yuan/mt. PSF trading volume stayed slim and producers’ inventory increased to around 17 days. Besides, PSF exported price progressively followed down.

● Dragged by slumping feedstock and PTA futures, PET bottle chip market dropped continuously in H1 May, down 700-800yuan/mt in domestic market and $40-50/mt in export market. In export section, with many orders in hand, suppliers were not very anxious to reduce prices, though.