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

2. 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.

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

4. The Year in Ethylene: 2013

5. Marking to Market Responding to news Needing product
Building positions
Monitoring positions
Monitoring book value

6. 1Q 2014 Ethylene 1Q 2013 Starting: 59.5 cpp Ending: 60.875 cpp
High: cpp
Low: 59.5 cpp
Average: 63.5 cpp
1Q 2014
Starting: cpp
Ending: 52 cpp
High: 59 cpp
Low: cpp
Average: 53.5 cpp

7. 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 cpp
Feb cpp
Mar 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 cpp
Feb cpp
Mar cpp

8. Futures & Forecasts: 1Q 2014
1Q 2014 FORECAST
1Q 2014 AVERAGE
1Q 2014 FUTURES CONTRACTS
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014 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

9. Futures & Forecasts: 1Q 2014

10. 2Q 2014 Ethylene 2Q 2013 Starting: 60.875 cpp Ending: 56.5 cpp
High: cpp
Low: 51 cpp
Average: 56.9 cpp
2Q 2014
Starting: cpp
Ending: cpp
High: cpp
Low: cpp
Average: 54.8 cpp

11. 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 cpp
May cpp
Jun 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
May
Jun

12. Futures & Forecasts: 2Q 2014
2Q 2014 FORECAST
2Q 2014 AVERAGE
2Q 2014 FUTURES CONTRACTS
2Q 2013
3Q 2013
4Q 2013
1Q 2014
2Q 2014 NA
Short-term volatility makes forecasts extremely difficult
Averages gradually move day to day
Volatility can also bring unexpected futures expirations

13. Futures & Forecasts: 2Q 2014

14. 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

15. 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 cpp
Aug cpp
Sep 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 cpp
Aug cpp
Sep cpp

16. Futures & Forecasts: 3Q 2014
3Q 2014 FORECAST
3Q 2014 AVERAGE
3Q 2014 FUTURES CONTRACTS
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014 NA
Forecast revisions can be stressful for supply management
Volatility can create unexpected averages
Positions established far out can get upside down quickly

17. Futures & Forecasts: 3Q 2014

18. 4Q 2014 Ethylene 4Q 2013 Starting: 48 cpp Ending: 58.5 cpp
High: cpp
Low: 44 cpp
Average: 51.9 cpp
4Q 2014
Starting: 65 cpp
Ending: 43 cpp
High: cpp
Low: cpp
Average: 53.3 cpp

19. 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 cpp
Nov cpp
Dec 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 cpp
Nov cpp
Dec cpp

20. Futures & Forecasts: 4Q 2014
4Q 2014 FORECAST
4Q 2014 AVERAGE
4Q 2014 FUTURES CONTRACTS
4Q 2013
1Q 2014
2Q 2014
3Q 2014
4Q 2014 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

21. Futures & Forecasts: 4Q 2014

22. Spot physical trade volumes have soared since 2007.
News-Driven … and More
MM LBS 1Q 2Q 3Q 4Q
TOTAL
MM LBS 1Q 2Q 3Q 4Q
TOTAL
Spot physical trade volumes have soared since 2007.

23. Futures & Forecasts: 2015 1Q 2015 FORECAST 1Q FUTURES CONTRACTS
1Q 2015 FORECAST
1Q FUTURES CONTRACTS
1Q 2015 AVERAGE
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015 ?
2Q 2015 FORECAST
2Q FUTURES CONTRACTS
2Q 2015 AVERAGE
2Q 2014
3Q 2014
4Q 2014
1Q 2015 ?
2Q 2015

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

25. 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

26. 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 cpp
Jan 5, 2015: Calendar 2015 PGP trades at cpp
Unlike in ethylene, producer nominate prices before a month starts – and then negotiations begin

27. The Year in Benzene: 2014

28. Benzene vs Brent: What’s More Volatile?

29. Questions?
Thank you!