This Weeks Highlights:

Asian Propylene: Prices flat in thin activity

Asian PP: Raffia falls $31-$36/mt on ample supply, low demand

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INDEX:

Platts International Prices

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Polymerupdate Indian Domestic Producer Price

Platts Polymer Shipping Costs (USD/MT)

Polymerupdate CIF India Prices

Polymerupdate Indian Open Market Price Table

Polymerupdate Indian Producer Posting Price Comparison

Heard in PP Market

Currency Rates

Platts International Market Commentary & Analysis

Polymerupdate - PP Market Supply Scenario

Platts Price Analysis Of PP Chain Processing Margins

Crisil Research Macroeconomics & Currency Monthly Analysis

Point of Contact

10

Polymerupdate - About us & Copyright

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Platts - About us & Copyright

10

www.polymerupdate.com

www.platts.com

Week 30 July 29, 2015

POLYMERUPDATE INDIAN DOMESTIC PRODUCER PRICE RIL (Ex-Hazira)

PLATTS INTERNATIONAL PRICES (USD/MT)

July 22
(WK 29)

July 29
(WK 30)

India Crude basket: (USD/b)

55.70

53.30

- 02.40

Naphtha:

459.85

438.35

- 21.50




FOB Korea

854-856

844-846

- 10

CFR China

889-891

889-891

CFR South East Asia

839-841

839-841

PP Injection South Asia

1180-1182

1149-1151

- 31

PP Injection Far East Asia

1114-1116

1079-1081

- 35

PP Injection South East Asia

1140-1142

1109-1111

- 31

PP Raffia South Asia

1180-1182

1149-1151

- 31

PP Raffia Far East Asia

1114-1116

1079-1081

PP Raffia South East Asia

1145-1147

1109-1111

PP IPP Film South Asia

1200-1202

1169-1171

- 31

PP IPP Film Far East Asia

1134-1136

1099-1101

- 35

PP IPP Film South East Asia

1165-1167

1129-1131

- 36

PP Copolymer South Asia

1215-1217

1189-1191

- 26

PP Copolymer Far East Asia

1164-1166

1129-1131

- 35

PP Copolymer South East Asia

1185-1187

1149-1151

- 36

PP BOPP South Asia

1195-1197

1164-1166

- 31

PP BOPP Far East Asia

1124-1126

1089-1091

- 35

PP BOPP South East Asia

1165-1167

1129-1131

- 36

















7880-7920

- 200

Product

(MOP West India)

INDIA DOMESTIC PRODUCER PRICE - RIL (Ex Hazira)

Price Change
on Week

Product

Poly propylene :

- 36

8080-8120

USD/MT

INR/KG

Raffia

89.73

1272

89.73

1272

Injection

88.77

1258

88.77

1258

TQ Film
Homopolymer

91.97

1304

91.97

1304

Block Copolymer

91.86

1303

91.86

1303

Random Copolymer

96.39

1369

96.39

1369

BOPP Homopolymer

93.60

1328

93.60

1328

*Domestic Indian producer prices are quoted in INR/kg basic (Nett of all taxes); equivalent USD/MT
price is calculated at current US/INR rate. *Lot Size:
1 Truck Load (10 to 16 MT)
- Price assessments are based on information gathered from a cross section of the industry that includes
resin producers, processors, traders and distributors.
- Standard repeatable orders (based on confirmed market deals) form the basis of the prices.

PLATTS INTERNATIONAL PRICES

Specifications:
Cargoes of 100-500mt delivered 15-30 days forward from date of publication with
up to 30 days credit, basis CFR Far East Asia: China main ports (Shanghai, Shenzhen, Ningbo, Shantou,
Hong Kong); CFR South East Asia: Indonesia (Jakarta, Surabaya), Singapore, Philippines (Manila Bay),
Malaysia (Port Kelang), Thailand (Bangkok, Laem Chabang, Map Ta Phut), Vietnam (Ho Chi Minh). Platts
prices reflect spot market values on the day of publication.
India Crude Import Basket Calculation: ( (Dubai + Oman) / 2 * 65.2% ) + (Dated Brent * 34.8%)
MOP West India : Mean of Platts FOB West India naphtha export price

China Domestic (YUAN/MT EX-WORK) :

PP Raffia

Price Change on Week

INR/KG

AR

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- 35

July 29 (WK 30)

USD/MT

PP Grade

Propylene :

UD

July 22 (WK 29)

INR/KG

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

PLATTS Polymer shipping costs (USD/MT)

From:
To:
East China
South China
India
Southeast Asia
NW Europe
Turkey
US Gulf
Latin America

Middle East

Middle East

25 100 MT
20 25
15 25
45 50
30 35
55 65
50 70
130 140
165 175

> 100 MT
10 15
10 15
30 40
25 30
50 60
40 60
120 130
160 165

NOTES:
Polymers refer to Polyethylene, Polypropylene, Polystyrene, ABS, and PVC.
1) Middle East loadings refer to products coming from Jebel Ali (Dubai), Khalifa (Abu Dhabi), Jubail (Saudi Arabia), Shuaiba (Kuwait), Rabigh
(Saudi Arabia), Mesaieed (Qatar), Assaluyeh and Bandar Imam Khomeini (Iran) ports. The assessments are normalized between these ports.
2) East China deliveries refer to products coming into Zhangjiagang, Shanghai, Jiangyin, Nantong, Ningbo, Nanjing, Zhenjiang ports.
3) South China deliveries refer to products coming into Shenzhen, Shantou, Hong Kong, Xiamen, Zhuhai ports.
4) India deliveries refer to products coming into Kolkata, Mumbai and Chennai ports.
5) South East Asia deliveries refer to products coming into Indonesia (Jakarta, Surabaya), Singapore, Philippines (Manila Bay), Malaysia (Port
Kelang), Thailand (Bangkok), Vietnam (Ho Chi Minh) ports.
6) Northwest Europe deliveries refer to products coming into Antwerp port. Deliveries into Rotterdam and Amsterdam ports will be normalized to
Antwerp.
7) Turkey deliveries refer to products coming into Istanbul and Mersin ports.
8) US Gulf deliveries refer to products coming into Houston port. No deliveries from the Persian Gulf.
9) Latin America deliveries refer to products coming into main ports in Brazil, Chile, Uruguay.

POLYMERUPDATE (CIF INDIA PRICES)

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CIF INDIA BY ORIGIN (Nhava Sheva Port)

South Korea
PP Grade
Raffia

Singapore

WK 29
July 22

WK 30
July 29

1290

1240

- 50

Price Change
on Week

Injection

1290

1240

- 50

TQ Film Homopolymer

1310

1260

- 50

Block Copolymer

1300

1270

- 30

Random Copolymer

1330

1290

- 40

1210

- 50

BOPP Homopolymer

1260








WK 29
July 22

AS

WK 30
July 29

UD

Price Change
on Week

1160

- 70

1230

1160

- 70

1250

1180

- 70

1260

1190

- 70

1290

1220

- 70

1160

- 55

1230

1215

Thailand








Saudi Arabia

WK 29
July 22

WK 30
July 29

1250

1200

- 50

1250

1200

- 50

1270

1220

- 50

1250

1220

- 30

1270

1240

- 30

1200

- 30

1230

Price Change
on Week








WK 29
July 22
1200

WK 30
July 29
1150

- 50

1200

1150

- 50

1220

1170

- 50





--

--

--

--

--

--

--

--

--

--

--

--

Price Change
on Week

- All prices are in USD/MT CIF India (Nhava Sheva) - For South Korea, Singapore, Thailand and Saudi Arabia :
Cargo size of 50-100mt delivered within 30 days.
- Price assessments are based on information gathered from a cross section of the industry that includes resin producers, processors, traders and distributors.
- Standard repeatable orders (based on confirmed market deals) form the basis of the prices.

POLYMERUPDATE - Indian Open Market Price Table

Product

Note: All prices are in INR/kg levels.

Mumbai

Delhi

Kolkatta

Banglore

Indore

Chennai

Ahmedabad

Rajasthan

Kanpur

Hyderabad

Punjab

Kerala

PP Raffia

96.5 - 97

97 - 98

102 - 103

98.5 - 99

102 - 103

101 - 101.5

108 - 108.5

101 - 102

101.5 - 102.5

103 - 104

PP Film

100 - 101

103 - 104

106.5 -107

100.5 - 101

106 - 107

103 - 104

110 - 111

105 - 106

104 - 105

101 - 103

108 - 109

115.5 - 116

PP Injection

96.5 - 97

97 - 98

99 - 100

96 - 98

101 - 102

98.5 - 99.5

107 - 108

100 - 101

100 - 100.5

104 - 105

101 - 102

114 - 116

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

POLYMERUPDATE - INDIAN PRODUCER POSTING PRICE COMPARISON (GRADE WISE) w.e.f 16-July-2015
INJECTION MOULDING (MFI 8-11)

BOPP
Producer

Grade No.

*INR/MT

USD/MT

Producer

Grade No.

*INR/MT

USD/MT

RIL (Ex-Hazira)

H029SG/H035SG

93600

1328

RIL (Ex Works BC/NC)

AM120N

87230

1235

HALDIA (Ex-Works)

F103

95700

1359

RIL (Ex-Hazira)

H110MA

88770

1258

HALDIA (Ex-Works)

M110

90000

1276

FIBRE FILAMENTS
Producer

Grade No.

*INR/MT

USD/MT

RIL (Ex-Hazira)

H350FG/H200FG

92080

1306

Grade No.

*INR/MT

RIL (Ex Works BC/NC)

MI3535

95930

RIL (Ex-Hazira)

B030MG/B120MA

91860

HALDIA (Ex-Works)

M304

96000

USD/MT

MU

DA

1362

1303
1363

Producer

Grade No.

*INR/MT

USD/MT

RIL (Ex-Hazira)

R019MZ

96390

1369

AR

SS

IMPACT COPOLYMER
Producer

RANDOM COPOLYMER

RAFFIA
Producer

Grade No.

*INR/MT

USD/MT

RIL (Ex Works BC/NC)

SS35N

89040

1262

RIL (Ex-Hazira)

H030SG

89730

1272

HALDIA (Ex-Works)

R103

97100

1379

INJECTION MOULDING (MFI - 3)

TQ FILM

Producer

Grade No.

*INR/MT

USD/MT

Producer

Grade No.

*INR/MT

USD/MT

RIL (Ex-Hazira)

H033MG

89230

1264

RIL (Ex-Hazira)

H100EY

91970

1304

HALDIA (Ex-Works)

M103

92600

1313

HALDIA (Ex-Works)

F110

93800

1331

*Domestic Indian producer prices are quoted in INR/MT basic (Nett of all taxes); equivalent USD/MT price is calculated at current US/INR rate. *Lot Size:
1 Truck Load (10 to 16 MT)
- Ex Works: BC/NC = Ex Works Baroda Complex / Nagothane Complex | Ex Works: HC = Halidia Complex | Ex Works: M/B/T = Mumbai / Bhiwandi / Thane
- Product Key: BOPP = Biaxially-Oriented Polypropylene, MFI = Melt Flow Index,
- USD Price calculation: INR/MT Aprox. Clearing and Forwarding charges / Basic Duty / Exchange Rate = USD/MT (For example: 82330 2500 / 1.075 / 54.24 = 1396)

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

Heard in PP MARKET

Polymerupdate:

Platts:
PP Raffia/Injection: Aug offer heard at $1,100/mt CFR FE Asia

29-7-2015: Saudi Arabia producer offers PP Film at $1270-1280/mt in India (CIF Nhava Sheva port)

PP Raffia: Domestic China price heard at Yuan 7,900-8,000/mt, ex works

29-7-2015: Saudi Arabia producer offers PP Injection/Raffia at $1180/mt in India (CIF Nhava Sheva port)

PP Raffia/Injection: Aug offer heard at $1,150/mt CFR SE Asia, Reliance origin

PP BOPP: BOPP vs PP Raffia spread at about $20/mt CFR SE Asia

29-7-2015: Saudi Arabia producer offers PP Copolymer at $1310/mt in India (CIF Nhava Sheva port)

PP Block Copol: Aug offer heard at $1,230/mt CFR SE Asia, NATPET origin

29-7-2015: Saudi Arabia producer offers PP Injection/Raffia at $1150/mt in India (CIF Nhava Sheva port)

PP Raffia/Injection: Aug offer heard at $1,180/mt CFR S Asia, Aramco origin

29-7-2015: Oman producer offers PP Injection/Raffia at $1150/mt in India (CIF Nhava Sheva port)

PP Raffia/Injection: Aug offer heard at $1,190-1,200/mt CFR S Asia, NATPET origin

29-7-2015: Oman producer offers PP Film at $1160/mt in India (CIF Nhava Sheva port)

PP BOPP: BOPP vs PP Raffia spread at about $10/mt CFR S Asia

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29-7-2015: Saudi Arabia producer offers PP Raffia/Injection at $1175/mt in Pakistan

PP Block Copol: Aug offer heard at $1,240-1,250/mt CFR S Asia, Borouge origin
PP Raffia/Injection: Aug offer heard at $1,150/mt CFR SE Asia, Reliance origin

AS

PP Raffia/Injection: Aug offer heard at $1,130/mt CFR FE Asia, Reliance origin

PP IPP Film: IPP Film vs PP Raffia spread at about $20/mt CFR FE Asia

UD

PP BOPP: BOPP vs PP Raffia spread at about $15/mt CFR FE Asia

29-7-2015: Saudi Arabia producer offers PP Copolymer at $1205/mt in Pakistan

29-7-2015: Saudi Arabia producer offers PP Raffia/Injection at $1200/mt in Pakistan
29-7-2015: Saudi Arabia producer offers PP Film at $1220/mt in Pakistan

PP Block Copol: Block Copol vs Raffia/Injection spread about $50/mt, CFR FE Asia

PP Raffia/Injection: Aug offer heard at $1,120/mt CFR SE Asia, Borouge origin

PP Raffia/Injection: Aug offer heard at $1,090/mt CFR FE Asia, normalized to LC 30, Braskem origin
PP IPP FILM: IPP Film vs Raffia spread is about $15-20/mt CFR FE Asia
PP BOPP: BOPP vs Raffia spread is about $5-10/mt CFR FE Asia
PP Raffia/Injection: Aug offer heard at $1,140/mt CFR SE Asia, Mitsubishi origin
PP Raffia: Domestic China price heard at Yuan 7,900-7,950/mt, ex works
PP Raffia/Injection: Aug buying indication heard at $1,050/mt CFR FE Asia
PP Raffia/Injection: Aug offer heard at $1,160-1,170/mt CFR S Asia (Pakistan), APC/Lyondellbasell
PP Raffia/Injection: Aug offer heard at $1,120/mt CFR SE Asia, Borouge origin

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

PLATTS INTERNATIONAL MARKET COMMENTARY & ANALYSIS

Asian Propylene: Prices flat in thin activity

Asian PP: Raffia falls $31-$36/mt on ample supply, low demand

- Asian supply remains ample

- Producers offer excess stocks from SE Asia

- Buyers wait for new plants to start up

- Indian producers extend price protection

Propylene was assessed at $890/mt CFR China Friday, flat from the previous assessment on

The CFR Far East Asia polypropylene raffia marker plunged $35/mt week on week to $1,080/mt Wednesday, as

Thursday last week rather than last Friday due to a public holiday in Singapore. Discussion in

buying sentiment continues to deteriorate following weak economic data out earlier this week. Traders in China

the CFR China market was thin and no deals were heard concluded. Buyers were not in a hurry
amid expectations fresh supply would soon enter the market after the startup of new plants in

were heard offloading PP raffia cargoes at more than $100/mt below their purchase price, while actively exploring

China and South Korea. Sources said buying indications were around $880/mt CFR China while

export opportunities to Southeast Asia. Chinese domestic PP raffia plunged Yuan 200/mt on the week to Yuan

sellers were at $900/mt CFR China. The domestic price in East China was heard in the range of

7,900/mt Wednesday, equivalent to about $1,037/mt on an import parity basis, and sharply below the assessed

Yuan 6,500-6,900/mt, which averages to Yuan 6,700/mt or $913/mt on an import parity basis,

CFR Far East Asia raffia price. The CFR Southeast Asia PP raffia marker fell $36/mt on the week to $1,110/mt as

down from Yuan 6,750/mt on Thursday last week. On a day-on-day basis, the CFR China

producers offload excess inventory into an already weak market. The sharpest offer was heard to have come from

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marker fell $10/mt due to lower buy indications. Mid-week there was an increase in CFR China
offers after a firmer FOB Korea deal was done, but the higher offers were not taken up and no
deals had been confirmed by Friday. South Korea's Hanwha Total Tuesday sold 1,500-1,600 mt

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propylene for end August/early September loading via tender at $860-$865/mt FOB Korea.

Borouge, which was said to offering cargoes stockpiled at its regional warehouse in Jurong Island, Singapore. The
CFR South Asia PP raffia marker fell $31/mt week on week to $1,150/mt Wednesday, following a slew of tenders
from Middle Eastern producers such as Saudi Aramco, APC and LyondellBasell. Indian producers meanwhile,

Most market participants considered the level high and not repeatable. A source in South Korea

continued to agree to refund domestic clients the difference in prices for trades over July 21-31 if producers were

said Japanese buyers may have needed cargoes to fill vessel space. The FOB Korea marker

to lower offers on August 1. This strategy was meant to attract buyers who would otherwise have held back,

was assessed unchanged from last week at $845/mt, but down $10/mt day on day as buying

waiting for offers to fall.

MU

indications were lowered Friday. The CFR Taiwan marker was assessed at $888/mt, flat from a
week ago. A source in Taiwan said inventory levels were relatively high and supply ample,
while demand was weak with downstream phenol plants mulling lowering operating rates. The
CFR Southeast Asia marker was assessed at $840/mt, also unchanged from the week before,
in thin activity with August discussions heard to have mostly been concluded earlier.
RATIONALE:
Propylene was assessed at $890/mt on a CFR China basis Friday, flat from the previous
assessment on Thursday last week. The buy idea was heard at $880/mt CFR China while the

RATIONALE:
Polypropylene raffia was assessed $35/mt lower on week at $1,080/mt CFR Far East Asia Wednesday. Substantial
volumes of deepsea cargoes from Brazil was heard offered at $1,090/mt CFR FE Asia after normalizing to Letter of
Credit on 30 days basis, while buy indications were at $1,050/mt. The CFR Southeast Asia raffia marker was
assessed at $1,110/mt, down $36/mt on the week reflecting offers heard from Borouge at $1,120/mt amid no
bids. The CFR South Asia PP raffia marker was assessed at $1,150/mt, down $31/mt on the week taking into
consideration offers at $1,160/mt from the Middle East, with few buy indications.

sell level was around $900/mt, similar to last week. The FOB Korea propylene marker was
assessed at $845/mt, also unchanged from Thursday last week. The assessment was above
buy indications heard at $840/mt. Domestic East China prices were heard in the range of Yuan
6,500-6,900/mt, with the average Yuan 6,700/mt equating to $913/mt on an import parity
basis, down slightly from Yuan 6,750/mt on Thursday last week.
ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

POLYMERUPDATE - PP MARKET SUPPLY SCENARIO

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MU

No. 4 cracker planned to be

shut by CPC
CPC is likely to shut its No. 4
cracker
for
maintenance
turnaround. The cracker is
planned to be shut in Q4, 2015.
The period of the shutdown
could not be ascertained.
Located in Linyuan, Taiwan, the
cracker has an ethylene capacity
of
380,000
mt/year
and
propylene capacity of 193,000
mt/year.
PP plant likely to be
restarted by LCY Chemical
LCY Chemical is likely to restart
its polypropylene (PP) plant.
The plant is likely to be
restarted in end-July 2015 or
early August 2015. It is
presently under a shutdown.
Located in Kaohsiung, Taiwan,
the plant has a production
capacity of 250,000 mt/year.
PO unit restarted by NKGC
Nanjing KUMHO GPRO Chemical
(NKGC)
has
restarted
a
propylene oxide plant. The plant

restarted over the weekend. It was shut for a maintenance turnaround. Located in Nanjing, China, the plant has a production capacity of 90,000 mt/year
Naphtha cracker likely to be shut by Lotte Chem
Lotte Chem is in plans to shut a naphtha cracker for maintenance turnaround. The cracker is likely to be shut in October 2015. It is planned to remain off-stream for around one month. Located in Daesan, South
Korea, the cracker has an ethylene capacity of 1 million mt/year, propylene capacity of 500,000 mt/year and butadiene capacity of 150,000 mt/year.
ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

PLATTS Price Analysis of PP Chain Processing Margins

Naphtha to Propylene

Propylene to Polypropylene

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Typical North East Asian $/mt margin for producing propylene

from naphtha using a conversion cost of $250/mt

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Polyproplene : Naphtha ratio

Typical $/mt margin for producing PP homo injection in Far East Asia
from propylene using a conversion cost of $150/mt

CFR China Vs SEA Propylene

MU

CFR FE Asia PP homo injection prices as a ratio of naphtha

CFR China propylene premium or discount to CFR South East Asian propylene prices

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

Currency rates equivalent to 1 US Dollar :
Countries

Currency Rates

Countries

Currency Rates

Indian Rupees (INR)

63.81

Japan Yen (JPY)

Pakistan Rupees (PKR)

101.82

Indonesia Rupiahs (IDR)

13,447.00

123.59

China Yuan Renminb (CNY)

6.21

Malaysia Ringgits (MYR)

3.80

Bangladesh Taka (BDT)

77.70

Singapore Dollars (SGD)

1.36

Sri Lanka Rupees (LKR)

133.50

South Korea Won (KRW)

1160.68

Thailand Baht (THB)

34.83

Saudi Arabia Riyals (SAR)

3.74

Taiwan New Dollars (TWD)

31.42

United Arab Emirates Dirhams (AED)

3.67

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CRISIL Research Macroeconomics & Currency Monthly Analysis

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Overview: On exports, worry beads forming

After falling by 1.5% in 2014-15, merchandise exports from India plunged 16.8% in the first 3 months ofthis fiscal. What went wrong?
The export destinations are not doing well, prices of many export items have fallen and the rupee, too,has appreciated in real terms
against the basket of 36 countries. Weakgrowth in the US economy in the first quarterwould have contributed to the sharp slide in
India'sexports as well.But our preliminary analysis shows the decline in exports is higher than warranted by these factors. That isto say,
the decline isnt merely cyclical; there could be structural elements at play as well. The cyclicalcomponent of the exports will move up
when cyclical factors (world GDP growth, prices) turn favourable,but structural factors, if not addressed, will continue to act as a drag
on India's export performance.The slowdown in trade is not unique to India. An IMF study (2014) notes that a part of the global
tradeslowdown since the crisis has been driven by structural, not cyclical factors. Theslowdown in trade could reflect deeper, structural
factors, such as a rise in protectionism or a change inglobal production schemes throughout the world.In the case of India, there are
additional worries. Falling competitiveness is another structural factorrestricting export growth. For key export items such as gems &
jewellery and textiles, RevealedComparative Advantage has come down over the years. Recently,the Indian commerce secretary also
expressed concerns on falling competitiveness of Indian exports due toinfrastructure and easing of doing business issues.Another
concern is the threat emanating from treaties such as Trans Pacific Partnership(TPP), which is being forged between 12 countries,
including the US. By not being a part of TPP, India riskslosing out a significant chunk of its export market; TPP countries account for
25% of Indias exports.Indeed, India needs to address export-related issues on a war footing.

MU

ContactDetails:344,AtoZIndl.Estate,G.K.Marg,LowerParel(w),Mumbai400013,INDIA|Email:info@polymerupdate.com|Tel:+912261772000(25lines)|Fax:+912261772025

Week 30 July 29, 2015

IIP indicates industry growth gaining traction
Industrial production growth inched down to 2.7% in May from 3.4% in April. However, despite the volatility, IIP numbers have averaged at a
higher level in 2015 - at 3.5% since January 2015 as compared to 1.4% in the 5 months prior to that. Therefore, IIP data suggests an
improvement in industrial activity this year in comparison to 2014, so far. In May, IIP growth slowed as the manufacturing sector lost
momentum on the back of weak performance of consumer-oriented sectors. Unseasonal rains earlier in the year, resulting in lower rural
demand, are weighing on consumer goods. This is reflected in lower two-wheeler and tractor sales in April and May. Therefore, favourable
distribution of rainfall so far and deficiency at -4% of long term average - much lower than last year - is a welcome respite.

Inflation crawls up in June

Inflation inched up to 5.4% from 5% in May due to a 70 bps increase in food inflation. Higher protein inflation -9.7% in June compared with 8.2%
in May - was behind the food inflation rise. Inflation in pulses crossed 22% in June as production suffered largely a result of a weak monsoon last
year and damage to crops from unseasonal rains this year. So far, the monsoon scenario remains favourable, with rainfall at 4% below the long
term average as on July 8, 2015. But, healthy and well-distributed rainfall in July and August will be crucial. We go by Indian Meteorological
Departments forecast of 12% deficient rainfall, but assume distribution remains normal, and the government undertakes proactive steps to
contain food inflation. We, therefore, expect CPI inflation at 5.8% in 2015-16, down from 6% in 2014-15. Core inflation rose 20 bps to 5.3% in
June, a slower climb compared to 40 bps in May. The pick-up came from a sharp jump in personal care and effects (up 120 bps) and in household
services, health, transport and communication and, recreation and amusement (all up 30 bps).

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Rupee stays put in June

The rupee averaged 63.9/$, hardly changed from 63.8/$ in May. However, it fell to 71.6 against the euro from71.2 in May. In the first half of
June, the rupee hovered between 64.2/$ and 63.8/$, and rose to 63.5/$ in the second half as weak employment data dragged the US dollar
down. However, as uncertainty on Greece loomed large in the last week of June, the rupee lost some ground, closing at 63.8/$. There was also
no support from FIIs, with net outflows continuing for the second consecutive monthly.

About CRISIL Research

CRISIL Research is India's largest independent and integrated research house. We provide insights, opinions, and analysis on the Indian economy, industries, capital markets and companies. We are India's most credible
provider of economy and industry research. Our industry research covers 70 sectors and is known for its rich insights and perspectives. Our analysis is supported by inputs from our network of more than 4,500 primary
sources, including industry experts, industry associations, and trade channels. We play a key role in India's fixed income markets. We are India's largest provider of valuations of fixed income securities, serving the mutual
fund, insurance, and banking industries. We are the sole provider of debt and hybrid indices to India's mutual fund and life insurance industries. We pioneered independent equity research in India, and are today India's largest
independent equity research house. Our defining trait is the ability to convert information and data into expert judgements and forecasts with complete objectivity. We leverage our deep understanding of the macroeconomy
and our extensive sector coverage to provide unique insights on micro-macro and cross-sectoral linkages. We deliver our research through an innovative web-based research platform. Our talent pool comprises economists,
sector experts, company analysts, and information management specialists.

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Week 30 July 29, 2015

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