Table of Contents
Short-term gains, long-term pain............................................3
Investment strategy for the sector ................................................................................5
Outlook for Ethylene remains bearish....................................8
Can it get worse? We think so...............................................11
Risk #1: Capacity rationalization already assumed....................................................11
Risk #2: Middle East and China off to the races? ......................................................11
Risk #3: N America & W Europe demand remains weak..........................................15
Further capacity pressure: The Chinese petrochemical stimulus plan .......................16
Who are the survivors?..........................................................18
Consolidation within Asia?........................................................................................18
Korea vs. Taiwan .......................................................................................................19
1Q09 earnings review: Round 1 goes to Korea..........................................................20
PVC..........................................................................................23
Perhaps the least affected by the Middle East............................................................23
MEG.........................................................................................26
A harbinger of things to come for Ethylene/PE.........................................................26
Aromatics (Benzene, PX, PTA)..............................................28
It has been surprisingly strong in 2Q but watch out…...............................................28
Longer-term outlook remains negative for PX ..........................................................29
Glimmer of hope for PTA by 2010............................................................................31
Companies
Formosa Plastics Corp ...............................................................................................34
Nan Ya Plastics Corp.................................................................................................39
Formosa Chemicals and Fibre Corp...........................................................................44
Formosa Petrochemical Corp.....................................................................................49
LG Chem Ltd .............................................................................................................54
Hanwha Chemical Corp.............................................................................................59
Honam Petrochemical Corp.......................................................................................64
PTT Chemical Public Company ................................................................................69
PTT Aromatics and Refining Public Company Limited ............................................73
Appendix .................................................................................77