The Future is Now A Look at the Year in Review and the Year Ahead Kathy Hall Exeutive Editor, PetroChem Wire January 6, 2015

About PetroChem Wire Formed in 2007 in response to growing liquidity in the spot ethylene monomer market. PCW publishes daily spot prices for NGLs, monomers and polymers, connecting the supply chain from energy down to manufacturing. PCW prices are used by the NYMEX and ICE as benchmark for monomer & polymer futures contracts. www.petrochemwire.com

The Year in Ethylene: 2014 Average price: 57.2 cpp High: 76.5 (Sep 19) Low: 38.25 cpp (Dec 15) www.petrochemwire.com

The Year in Ethylene: 2013 www.petrochemwire.com

Marking to Market Responding to news Needing product Building positions Monitoring positions Monitoring book value www.petrochemwire.com

1Q 2014 Ethylene 1Q 2013 Starting: 59.5 cpp Ending: 60.875 cpp High: 67.875 cpp Low: 59.5 cpp Average: 63.5 cpp 1Q 2014 Starting: 58.625 cpp Ending: 52 cpp High: 59 cpp Low: 49.75 cpp Average: 53.5 cpp www.petrochemwire.com

Ethane price (Avg by Month): Ethane price (Avg by Month): 1Q Fundamentals 2013 1Q Outages: Eastman Longview HCC-3A Markwest Javelina Huntsman Port Neches Westlake Lake Charles Petro 2 Dow Freeport LH7 BASF/TOTAL Port Arthur FHR Port Arthur Chevron Phillips Sweeny Ethane price (Avg by Month): Jan-13 7.914 cpp Feb-13 8.657 cpp Mar-13 9.388 cpp 2014 1Q Outages: Williams Geismar Chevron Phillips Port Arthur FHR Port Arthur Chevron Phillips Sweeny 33 Equistar Channelview Huntsman Port Neches Eastman Longview HCC-4 INEOS Chocolate Bayou OP-1 Markwest Javelina Equistar LaPorte Dow Freeport TX-7 Ethane price (Avg by Month): Jan-14 10.94 cpp Feb-14 12.99 cpp Mar-14 10.10 cpp www.petrochemwire.com

Futures & Forecasts: 1Q 2014   1Q 2014 FORECAST 1Q 2014 AVERAGE 1Q 2014 FUTURES CONTRACTS 1Q 2013 0.52000 0.54554 0.54125 2Q 2013 0.58000 0.52326 0.52875 3Q 2013 0.53204 0.52125 4Q 2013 0.54000 0.53693 0.60000 1Q 2014 0.53467 NA Forecasts become sharper the closer they are Averages are only clear in hindsight Futures expire on the last trading day for the delivery period www.petrochemwire.com

Futures & Forecasts: 1Q 2014 www.petrochemwire.com

2Q 2014 Ethylene 2Q 2013 Starting: 60.875 cpp Ending: 56.5 cpp High: 62.375 cpp Low: 51 cpp Average: 56.9 cpp 2Q 2014 Starting: 51.625 cpp Ending: 54.75 cpp High: 57.625 cpp Low: 51.25 cpp Average: 54.8 cpp www.petrochemwire.com

Ethane price (Avg by Month): Ethane price (Avg by Month): 2Q Fundamentals 2013 2Q Outages: Chevron Phillips Port Arthur Dow Freeport TX7 ExxonMobil Baytown BASF/TOTAL Port Arthur FHR Port Arthur Chevron Phillips Sweeny 33 Chevron Phillips Sweeny 24 Chevron Phillips Sweeny 22 Williams Geismar Ethane price (Avg by Month): Apr-13 9.70 cpp May-13 9.50 cpp Jun-13 8.31 cpp 2014 2Q Outages: Eastman Longview HCC-3A Westlake Lake Charles Petro 2 DuPont Orange Chevron Phillips Sweeny 22 ExxonMobil Beaumont FHR Port Arthur Dow Plaquemine Huntsman Port Neches Westlake Lake Charles Petro 1 Eastman Longview HCC-4 ExxonMobil Baton Rouge Williams Geismar Ethane price (Avg by Month): Apr-14 9.91 May-14 9.65 Jun-14 9.77 www.petrochemwire.com

Futures & Forecasts: 2Q 2014   2Q 2014 FORECAST 2Q 2014 AVERAGE 2Q 2014 FUTURES CONTRACTS 2Q 2013 0.60000 0.51007 0.51000 3Q 2013 0.52391 0.52375 4Q 2013 0.53000 0.53856 0.59250 1Q 2014 0.50000 0.54171 2Q 2014 0.54000 0.54841 NA Short-term volatility makes forecasts extremely difficult Averages gradually move day to day Volatility can also bring unexpected futures expirations www.petrochemwire.com

Futures & Forecasts: 2Q 2014 www.petrochemwire.com

3Q 2014 Ethylene 3Q 2013 Starting: 57 cpp Ending: 50 cpp High: 58 cpp Low: 50 cpp Average: 54.2 cpp 3Q 2014 Starting: 55 cpp Ending: 69 cpp High: 76 cpp Low: 55 cpp Average: 67.1 cpp www.petrochemwire.com

Ethane price (Avg by Month): Ethane price (Avg by Month): 3Q Fundamentals 2013 3Q Outages: Eastman Longview HCC-3 Westlake Lake Charles Petro 1 ExxonMobil Baton Rouge Dow Freeport TX7 Chevron Phillips Sweeny 33 Chevron Phillips Sweeny 22 Chevron Phillips Port Arthur Shell Deer Park OP-3 Williams Geismar Ethane price (Avg by Month): Jul-13 8.36 cpp Aug-13 8.34 cpp Sep-13 8.37 cpp 2013 3Q Outages: Eastman Longview HCC-4 ExxonMobil Baytown BOP-X Westlake Lake Charles Petro 1 Dow Freeport TX-8 ExxonMobil Baton Rouge Equistar LaPorte Dow Freeport TX7 Chevron Phillips Port Arthur Williams Geismar Ethane price (Avg by Month): Jul-14 8.27 cpp Aug-14 7.67 cpp Sep-14 7.87 cpp www.petrochemwire.com

Futures & Forecasts: 3Q 2014   3Q 2014 FORECAST 3Q 2014 AVERAGE 3Q 2014 FUTURES CONTRACTS 3Q 2013 0.52000 0.50967 0.51500 4Q 2013 0.49000 0.53475 0.57875 1Q 2014 0.53436 0.51375 2Q 2014 0.54104 0.54375 3Q 2014 0.59000 0.67258 NA Forecast revisions can be stressful for supply management Volatility can create unexpected averages Positions established far out can get upside down quickly www.petrochemwire.com

Futures & Forecasts: 3Q 2014 www.petrochemwire.com

4Q 2014 Ethylene 4Q 2013 Starting: 48 cpp Ending: 58.5 cpp High: 58.5 cpp Low: 44 cpp Average: 51.9 cpp 4Q 2014 Starting: 65 cpp Ending: 43 cpp High: 68.75 cpp Low: 38.25 cpp Average: 53.3 cpp www.petrochemwire.com

Ethane price (Avg by Month): Ethane price (Avg by Month): 4Q Fundamentals 2013 4Q Outages: Shell Norco GO-1 Markwest Javelina Eastman Longview HCC-4 Dow Freeport LHC-8 Williams Geismar Ethane price (Avg by Month): Oct-13 8.55 cpp Nov-13 8.41 cpp Dec-13 9.42 cpp 2014 4Q Outages: Formosa Point Comfort OL 1 Shell Norco GO-1 Chevron Phillips Port Arthur ExxonMobil Beaumont Eastman Longview HCC-4 Chevron Phillips Sweeny 22 ExxonMobil Baytown BOP-X Equistar LaPorte Williams Geismar Ethane price (Avg by Month): Oct-14 7.57 cpp Nov-14 7.51 cpp Dec-14 5.90 cpp www.petrochemwire.com

Futures & Forecasts: 4Q 2014   4Q 2014 FORECAST 4Q 2014 AVERAGE 4Q 2014 FUTURES CONTRACTS 4Q 2013 0.48000 0.52913 0.56000 1Q 2014 0.47000 0.52406 0.50625 2Q 2014 0.53372 0.53250 3Q 2014 0.54000 0.63634 0.65000 4Q 2014 0.57750 0.53178 NA Forward trading is similar to forecasting, but driven by different (sometimes conflicting) motivations Those active in forward and prompt markets have the most options around pricing www.petrochemwire.com

Futures & Forecasts: 4Q 2014 www.petrochemwire.com

Spot physical trade volumes have soared since 2007. News-Driven … and More MM LBS 1Q 2013 1653.5 2Q 2013 1240.0 3Q 2013 1643.8 4Q 2013 1965.7 TOTAL 6503.0 MM LBS 1Q 2014 1413.0 2Q 2014 1552.0 3Q 2014 2286.0 4Q 2014 1785.9 TOTAL 7036.9 Spot physical trade volumes have soared since 2007. www.petrochemwire.com

Futures & Forecasts: 2015 1Q 2015 FORECAST 1Q FUTURES CONTRACTS   1Q 2015 FORECAST 1Q FUTURES CONTRACTS 1Q 2015 AVERAGE 1Q 2014 0.49000 0.50125 0.51735 2Q 2014 0.51000 0.53500 0.52799 3Q 2014 0.55000 0.60000 0.60786 4Q 2014 0.53000 0.42875 0.51481 1Q 2015 0.41000 0.42500 ?   2Q 2015 FORECAST 2Q FUTURES CONTRACTS 2Q 2015 AVERAGE 2Q 2014 0.50000 0.53500 0.52789 3Q 2014 0.55000 0.58375 0.60786 4Q 2014 0.52000 0.42500 0.51447 1Q 2015 0.43000 0.41500 ? 2Q 2015 www.petrochemwire.com

The Year in Propylene: 2014 Average price: 68 cpp High: 77.125 (Sep 26) Low: 52 cpp (Dec 16) www.petrochemwire.com

The Year in Propylene: 2014 PGP held a strong premium to RGP for much of 2014, driven by tight supply Refining economics and refinery issues drove RGP for much for the year Propane was steady, driven by heating markets www.petrochemwire.com

The Year in Propylene: 2015 PGP has been backward for nearly all of 2014 Forward trading for PGP is mostly in the paper markets, but positions are already held out to the end of 2015 Nov 25, 2014: Calendar 2015 PGP trades at 62.625 cpp Jan 5, 2015: Calendar 2015 PGP trades at 51.75 cpp Unlike in ethylene, producer nominate prices before a month starts – and then negotiations begin www.petrochemwire.com

The Year in Benzene: 2014 www.petrochemwire.com

Benzene vs Brent: What’s More Volatile? www.petrochemwire.com

Questions? Thank you! www.petrochemwire.com