012 The beginning of the

year, our total 24 Home ethylene

production enterprise s, 29

Sets ethylene plant, the national total

ethylene capacity of 1531

Ten thousand Tons. 2012

Years new ethylene capacity 160

Tons, of which, Fushun Petrochemic

al ethylene expansion 80 Tons and Daqing

Petrochemi cal Ethylene New 60

Ten thousand tons have been

included in 2012 Years 10

Months into production , a result,

China's ethylene production capacity reached

1691 Tons, ranking the World

Sector. Chi na has formed 5

Megaton ethylene, accounting for a total

ethylene capacity of 1/3

; Ethylene plant in China average regulation

Mold close 60 Tons,

Higher than the world 52

Tons of average size, The rapid developmen

t and expansion of the ethylene industry

China's stone Significan tly improve

the status and influence of the chemical

industry in the world.

Capacity layout, 2012 Years

1 ~ 10 Months, the region

accounted for the largest proportion of

ethylene production in East China, accounting

for the total production Amount of 30.2%

; Followed by South China, the ratio of 21.4%

; Thirdly, North China, accounting for

18.6% .

According to statistics , 2012

Years 1 ~ 11

Month national cumulative production

of ethylene 1355.1 Tons,

Than the same period last year 1391.6

Ten thousand tons Less Less 2.6%

; 2012 Years 1 ~

10 Months, China's ethylene imports

113.9 Tons, Year on year increase

36.7% And The amount of imports

Accumulati ve 14.2 Billion U.S.

dollars, the average transactio

n price for the 1246.7 U.S. dollar

/ Tons, an increase of 1%

. 2012

Years 1 ~ 11

Months of synthetic resins and copolymers

production statistics

Ten thousand tons

Name 2012 Years

1 ~ 11 January tired

Count 2011 Years 1

~ 11 January tired Count

Year-onyear /

Polyethyle ne resin ( PE )

933.8 824.3 1.0

Low Close Degree Gather B

Olefinic Tree Butter ( LDPE )

174.9 165.6 5.7

High Close Degree Gather

B Olefinic Tree Butter ( HDPE

) 278.9 303.3 -8.0

Line Sex Low Close Degree

Gather B Ene ( LLDPE )

300.0 305.8 -1.9 In

Close Degree Gather B Olefinic

Tree Butter ( MDPE )

2.9 3.7 -21.4 Exceed High

Minute Child Amount Gather B

Ene ( UHMW ) 13.1

12.4 5.8 Polypropyl ene resin (

PP ) 1014.7 894.2 13.5

PVC resin ( PVC )

1204.0 1179.8 2.0 Polystyren e resin ()

197.8 188.7 4.8 ABS Resin

95.3 93.7 1.6

Synthetic resins and copolymers 4736.1

4468.0 6.0 The national

Ministry of Industry and Information Technology

released the "12th Five-Year Plan of the

olefin industry" Planning that to 2015

Years, I State ethylene production

capacity reached 2700

Tons, the output will reach 2430

Tons. The naphtha route system the average

size of the ethylene plant Will reach

70 Million metric tons, the olefin

feedstock diversific ation rate will reach 20%

Above, the formation of 3 A

200 Tons of ethylene Production base, a

large device to further enhance the

automation rate.

Ethylene Industry 2013 Year outlook

 2013

China's petrochemi cal industry, "an

important year for the implementa tion of

the 12th Five-Year Plan, with the rapid industrial

ization and urbanizati on years

Development , ethylene demand will continue to maintain a

certain growth rate, it is estimated that

2013 ~ 2015

Annual growth rate in 5% ~

7% , To 2015 Years Ethylene

Equivalent consumptio n will exceed

3500 Tons, Potential demand for

high-end products. For the developmen t of

China's ethylene industry provides a wide

Wide space.

Facing the pressures and challenges of the

Middle East and North America

Ethylene products

In recent years, countries in the Middle

East, especially Saudi Arabia, with its

rich sources of, Inexpensiv e light

hydrocarbo n feedstock, Vigorously develop

the ethylene industry And as the main

target market of China and East Asia,

The impact of China's ethylene industry

is very obvious. Ethane raw one in the

Middle East Lord, To produce significan

t amounts of ethylene and

derivative s, Pull down the global polyethyle

ne and ethanol prices And the Middle

East itself to consumer The fees capacity

is very limited impact on China's ethylene

industry is ongoing and farreaching.

 In addition,

Of largescale developmen t of shale gas of

adequate inexpensiv e ethane and

condensate , This is the United States

following the gold Ethylene industry malaise

after local financial crisis of

confidence , If the local ethylene

capacity expansion project scheduled real

Will greatly increase ethylene capacity by

virtue of its lowcost raw material advantage,

Competitiv eness will be put to rout,

Will also affect the future of the global

Ethylene and downstream derivative s market.

China's ethylene industry is facing the

pressure of the Middle East and North

America vinyl products and

The challenge will increase.

 Industry overcapaci ty is a

prominent problem Strong market competitiv

eness and riskresisting ability primarily

lies industry innovation Weak. First , the lack

of corporate R & D investment, technologic

al innovation capability is weak, the

transformat ion rate is not high, the branch of industry

Support the leading role to

play enough. Second, Original innovation

, integrated innovation capacity

is not strong, Pilot high-tech field of

science and technology Weak, foster the

developmen t of strategic emerging industries

slower, dependent on imports of highend

products. Third, enterprise s as the mainstay,

Marketoriented, The combinatio n of

research and industry technology innovation

system is not yet fully establishe d,

The innovative efficient allocation of

resources and the consolidat ed

Cointegratio n capability is weak,

and the impact of scientific and technologi

cal developmen t of structural and

institutio nal obstacles still exist.

Chloralkali industry

To 2012 The end

Domestic caustic soda production

capacity will reach 3735.6 Tons,

Ion exchange membrane plant capacity

3407.1 Tons, Accounted for in the proportion

of production capacity reached 91.2%

. PVC Production capacity of

the (vague resin) 2340.5 Tons, of which the

production of calcium carbide process device

1897.5 Million tons, accounting PVC

Of total capacity 81% .

 2012 The years new chlor-

alkali capacity including caustic soda

446.5 Tons, PVC291.5 Tons,

Calcium carbide process paste resin

4 Tons. 2012 Year, better

profitabil ity caustic soda products,

and enterprise s to promote the

project constructi on and test production

slightly faster pace, and PVC

Products due to deteriorat ing market conditions

led to some of the new expansion projects

to be delayed or even shelved.

At the same time, Midwest Areas relying on

its resources and energy advantages , chlor-

alkali plant capacity continued to show

substantia l growth, only Xinjiang 2012

Years new Capacity exceeded one

million tons.

Exit capacity 2012 Reason to withdraw

from the market of the year due to relocation

, technical innovation , and eliminatio

n of outdated device caustic

soda plant capacity Reach 123

Tons, of which diaphragm caustic soda

devices accounted for 42.3% . Because

2012 Year of caustic soda overall

higher market price, diaphragm

caustic soda Backward production capacity

out of the device slowed down the pace.

Statistics show that There are still 300

Tons of diaphragm caustic soda

The production phase-out of the device

within the next three years in succession .

2012 Years PVC

Exit capacity of 116

Tons. Wort h noting The western region,

due to the relocation of production capacity

replacemen t out of calcium carbide process

PVC Prominent production unit price,

while the East Regions ethylene method

device that does not have a competitiv e

advantage is also reduced.

Because 2012 Years the overall

profitabil ity of the chloralkali industry

in poor condition, The new expansion

projects especially PVC

Projects yield decreased But the pace of

chloralkali industry capacity growth

will continue. Statistics show that 2013

Year 342 Ten thousand tons

PVC New products The plan voted to

build ancillary caustic soda

production capacity in 2012 Was put into

operation. Caustic soda aspects 2013

Year-onyear Plan put into operation

a new expansion of the size of

the project in 384 Million tons,

which includes a number of technologi cal

transforma tion and capacity replacemen t project,

But if all scheduled to put into operation,

2013 The net increase of the domestic

soda will also be more than 300 Tons.

 Forecast 2012

Years PVC Downstream plastic products

production was 5231.8 Million tons, an

increase of 9.0% . Caustic soda major

downstream production Goods cloth

production for 591.1 Million meters,

Year-onyear growth 10.9% ;

The sticky fiber production for 220.3

Tons, An increase of 20.4%

; Alumina production was 3467.6

Tons, Year-onyear growth 10.3%

. Chloralkali production of major

downstream products continue to

maintain growth Trend, But by the macro-

environment al impact, the growth has slowed down

significant ly. On the current situation

analysis, chloralkali downstream industry

needs in the short term Demand increase

in a weak situation any difficult fundamenta

lly changed.

2012 The domestic PVC

The foreign trade market has yet to see significant

improvement , especially exports continued

to show a downward trend. Befo re 10

Months, the domestic PVC

Pure powder exports accumulate d only

32.3 Million tons, down 7.45%

. Domestic calcium carbide process PVC

Student High production costs, weak

export competitiv eness as a whole, exports in

poor condition. Import side, Although

PVC Pure powder prices lower

outer disk, for the supply of the United

States, South Korea, Japan and Taiwan and

other countries and regions.

Into the Chinese market conditions ,

However, due to the downstream demand flat,

Relatively stable import traders and

downstream plant procuremen t Given.

 2012 Years

Poor overall performanc e of liquid

caustic soda Foreign Trade 1

~ 10 Months total exports

135.72 Tons, Down 0.72% .

Early due to caustic soda unit started load

Export supply less than normal,

Domestic product prices high ranking,

So that the export market "Delivery

Tight price Yang " Trend.

With the decline in domestic prices,

Adverse factors appear weakened demand for

the Southeast Asian region. To

2012 Before and after the end of the

year, domestic 48% ~ 50%

The alkali export offer has dropped 390

~ 410 U.S. dollar /

Ton ( FOB ) China's main

port. Soli d Alkali 1 ~

10 Months total exports 38.39

Tons, Down 15.89% .

Caustic soda prices high combined

with energy costs continuing on

Liters, rising costs of solid caustic

soda exports less competitiv e,

resulting in lower exports.

PVC

Since the market downturn, domestic PVC

The production growth is not obvious,

in the background of continued expansion

of production capacity, device

utilizatio n Continue to decline.

2012 Years 11 Month PVC

Production was 108.9 Million tons, down

3.8% ; Before 11

Months cumulative production As 1204.0

Tons, the cumulative year-onyear increase

2% The year is expected

to yield than 2011

Years of modest growth.

2012 The domestic PVC

The market price trends generally divided

into four stages: Since the beginning

of the year, The market as a whole showed the

shock state. From 5

Before and after midMay by the negative impact of

market supply increased slightly

sluggish demand PVC Price anxious

transferre d downlink Channel to 7

In early stabilized stabilized and began to shock

upstream. T o 9 And 10

The month, with the downstream industry into

consumer short Quarter, a further weakening

of demand, market prices decline again.

 Downstream industry

demand weak, weak support 2012

The national real estate industry

to limit acquisitio ns are not substantia l

relaxation . Statistics show that And

PVC Downstream demand is most closely

related to new housing constructi on area

1 ~ 11 Month cumulative

16.24 Million square Meters, a year-on-

year decline 7.2% For several

consecutiv e months of negative growth.

 Price trade

atmosphere sustained Yindie lead to deep

Because PVC No market price

change for the better trend, the market trading

atmosphere light, Most of the traders

and downstream customers choose to

wait and see And avoid financial enter.

For the market, Intermedia te links

not hoard goods The behavior objectivel

y reduce market speculatio n, which adds to

the bearish sentiment.

The export market is still in

the doldrums Domestic calcium

carbide process PVC Production cost is

high, weak export competitive ness as a whole, I

Country PVC The pressure of exports

continued to increase. On the other

hand, the outer disc vinyl changes in the prices

of raw materials, but also for the

United States, Korea, The supply of the

countries and regions such as Japan and

China Taiwan into China market provides

favorable conditions China Imports

The market can hardly be optimistic .

 The futures

and delivery affecting the stock market

Whether it is the traders hedging

operations or PVC Corporate cash hedge

against inflation, PVC Futures delivery

month price changes have a direct

impact on the spot market. A followup to the

main contract delivery A series of changes

in the role of the operator mentality

and inventory turnover.

2012 Annual processing enterprise

s underemplo yment, "Ji Wang, lighter

offseason" performanc e of the downstream

demand industry in the domestic market

The background of the field of social

pressure on the stock unabated PVC

The market has resulted in a greater

negative impact. Cu rrently, the entire PVC

Industry chain faces tough predicamen

t: the upstream calcium carbide industry

losses, small factories closed

hedge more, and PVC The companies

also in the longterm cost and price

upside down, Downstream plastic products

industry started not full, profiles and tubes

Export scarce. If there is no a major irritant

powerful policy, PVC Product losses

will continue.

Caustic soda

Statistics show that 2012 Years 11

Month domestic caustic soda

production was 225

Million tons, an increase of 6% ; Before

11 Months of total Production was

2475.8 Tons, Year-onyear growth

4.1% . 2012 Years, Receive

PVC And other products the market price of

the low drag Tired, Electrolys is device

under limited, Caustic soda no obvious

single monthly growth Even cut the

phenomenon of the ring than in the

third quarter. The end of the third

quarter began, As part of the new expansion

device centralize d production

The growth of the domestic production

of caustic play a Stimulatin g

role. Fore cast 2012 The domestic

caustic soda production than 2011

The year will show a small increase.

 Domestic caustic soda

prices experience d many ups and downs, but the

overall price level than 2011

Years still significan tly improved.

The end of the first quarter Started, PVC

Liquid chlorine prices low drag the electrolysi

s device starts, the market supply to reduce the

boost domestic caustic soda prices

The grid appears a wave of strong put up.

Rally continuing to years, Major regional

caustic soda prices have climbed to

recent years Record highs East China

32% The caustic alkali mainstream

off 100 Price high to 3100 Yuan

/ Tons. 9 Mid to late after

With the significan t improvemen t in

chloralkali market Conditiona l

enterprise s operating load increase,

Combined with the downstream industry, the

arrival of the high price of caustic soda

Touch the lower prices emotions ,

domestic caustic soda prices fell

markedly, and even dropped to less than the

beginning of the year the price of

water products.

' Chloralkali balance '

The factors restrictin g caustic

soda started In the continuous

liquid chlorine, PVC Price low, serious

losses drag Number electrolys is device

started load passive lower

Played a heavy regional market supply

reduction in the amount of caustic

soda price uplift To the positive role.

The end of the third quarter, Liquid chlorine

market improved slightly, Caustic soda

enterprise s operating rate is too low,

the situation eased The combined

production capacity gradually released, increasing

the supply of caustic soda prices into the

downstream channel.

Continued weakness in demand for

downstream industries For the full year,

caustic soda major downstream industries did not

show a significan t increase in demand

"high season" The length of the

phenomenon , Relatively stable demand

growth is still able to support the formation

of caustic soda prices in the case of

insufficie nt supply of caustic soda.

Into the winter, The downstream industry

gradually into the purchasing consumer

offseason, Caustic soda demand is

supporting growth in major sectors -

The alumina prices lower, downstream

users of liquid chlorine

 Global

PVC Production trends

In 2007 Years to 2012

Years, Increase 23.1% And

2012 Years PVC Production reached

5320 Million tons, a year-onyear

increase last year Long 4.31% .

 2007 ~ 2012

The World PVC Yield trend graph

4021 4456 4332 4545 5054

5311 0 1000 2000 3000 4000

5000 6000 2007 2008 2009 2010

2011 2012

2007 ~

2012 The World

PVC consum ption

World PVC consumpti on

3.7 3.15

0.98 1.33 11.84 4.31 0 2

4 6 8 10 12 14

Increase

26% 6% 2%

4% 4% 18% 40%

Sales

North America Eastern Europe Africa

South America Middle East Western Europe

AsiaPacific

Sales
The first quarter of

Second quarter T