Dalian Huatai Plastic Machinery Co., Ltd.

The 2011 running of the machinery industry situation Commentary and 2012 Outlook for

2011 machinery industry operating environment is undergoing profound changes, the increase in major economic indicators are down significantly over the previous year, but overall still a relatively rapid growth; expected growth this year will continue to fall, the year is still expected to achieve a steady double-digit growth . The past number of years, overall, the gap between China's machinery industry with the international advanced level in narrowing the international position in improving the continuation of these trends in 2011, 2012, if more consciously accelerate the transformation of the pace of upgrading will continue to have a new progress. At the same time, it must be noted, the industry there are still many contradictions and problems, are also facing very serious challenges, such as not Huaikang apprehension of the heart, eager to countermeasures, and put into action, these trends it is possible to interrupt or reverse the . To enhance the sense and the sense of crisis in order to ensure sustained momentum. 2011 economic operation made great achievements, mainly in four aspects: one, the whole industry realized rapid growth; 2, structural adjustment has been under pressure to speed up the machinery industry last year, in a tight economic environment, turn pressure into motivation, and speed up structural adjustment. This is the last year the industry to be a rapid growth subjective reasons, the development of the industry last year with the production and marketing "faster growth" compared to one of the highlights of gratifying. Structural adjustment speed of the main manifestations: (1) host First, high-end power equipment development momentum of good water, nuclear, wind and other non-fossil energy power generation equipment in the power generation equipment production accounted for by the last year the pace to accelerate the upgrade to high-end rose 30.9% to 32.9%; AP1000 third-generation nuclear power technology digestion and absorption of steady progress; 1 million kilowatt hydropower equipment, 600,000 kilowatts level of circulating fluidized bed boiler, 5MW and 6MW wind power equipment and other high-end power equipment innovation is progressing smoothly. Equipment needed for the pilot demonstration of UHV AC million-volt power transmission line expansion of the successful completion of follow-up project of UHV DC projects have been started, to further improve the level of major equipment; ± 1100 kV DC transmission equipment and smart grid equipment development has been started. Second, heavy mining equipment, large-scale free forging hydraulic press, a new score of 18,500 tons, 30,000 tons cylinder forging hydraulic press 300 tons and 400-ton electric wheel dump truck, Φ14.93 m very large mud pressure balance tunnel boring machine successful development of other high-end equipment, large-scale milling equipment exported to the world's mining giants, large marine crankshaft into mass production. Third, the localization of long distance natural gas pipeline compression station equipment before a breakthrough to be imported 20,000 kilowatts-stage compressors drag motors, variable frequency devices and forging pipe line valves have been complete successfully developed and through user testing, forthcoming in East Gas Pipeline Project in the installation and operation. Fourth, the high-end machine to improve its competitive CNC machine tools, CNC device output growth is significantly faster than the ordinary machine, numerical control rates continue to enhance. 2011 CNC metal cutting machine tool production year-on-year increase of 20.60%, higher than the all metal cutting machine tools growth rate of over 5 percentage points, CNC metal cutting machine tool production in the metal cutting machine tools accounted for by last year's 28 percent to 30 percent. Jinan Machine Tool won the Ford Detroit plant five press lines and two blanking lines "turnkey" project orders in the strong opponents of international bidding competition in Germany, Japan, which marked China's automotive stamping line production level has been among the advanced in the world with a very strong international competitiveness. Five high-end instrument development momentum has to pick up Automation Instrumentation output growth reached 35%, much higher than the average growth rate of 25% of the instrumentation industry; its main business income margin reached 10%, much higher than 7% of the Machinery Industry the average profit margin; on behalf of high-end level of control system DCS system, the localization has made considerable progress; the rapid development of smart meters. Significantly accelerate the momentum of agricultural products significantly upgrade the momentum of the tractor to upgrade to high-power has become increasingly evident; following wheat, rice harvester hot, the service for corn, cotton, sugar cane and other cash crops to a variety of new agricultural machinery innovation momentum has also been trend. Seven cultural and office equipment manufacturing by foreign products dominate the world situation began to change through hard work, cultural and office equipment manufacturing market share of the domestic-funded enterprises in recent years began to rise 12% in 2010, 2011, to further improve to 14%. (2) the pace of localization of high-end infrastructure components to speed up the localization of the huge gap between the high-end hydraulic parts dawned. Invested hundreds of billions of large projects have been started, the the excavators host inroads into this area, this outstanding foundation bottlenecks have seen the hope of relief. Great influence on the innovation of high-performance silicon pressure sensors and pressure transmitters to achieve substantial breakthroughs in the measurement level, and has made user acceptance. Graphite sealing of the domestic nuclear power plant run examination after a number of domestic nuclear power plants for nearly four years of industrial and reliable operation has mass. [...]

May 15 the domestic market PE prices

Offer market varieties grades yesterday's closing price ($ / ton) real-time quotes ($ / ton) Change rate Updated Linyi tax LLDPE 7042 Yangtze 9260 HDPE 9455F - LDPE 2102TN26 9600 Qilu Chemical City tax-free LLDPE 7042 9900 of HDPE 6 098 10650 of LDPE 2102TN26 to 9550 Central Plains of LLDPE 7050 9800 Beijing [...]

April 2012 PE market summary

1 month PE market depth observation 1.1 the domestic market 1.1.1 Domestic RMB market review and analysis of domestic PE market Xianyanghouyi the month, most of the time in to squeeze the pre-rally. The comparison highlights the high and linear decrease, the pressure drop of about 3%, a linear decrease of about 2.8%, while the majority of low pressure also appeared loose, drawing relatively strong, injection molding, hollow, and the membrane material to fall. News of the beginning of the US economic data, the U.S. sanctions on Iran's crude oil exports support oil prices, costs rise to support the two groups have also risen, the market followed by gains of all varieties have a good performance. Ching Ming holidays back, the Easter holidays, Europe and the United States stock market closed, Spain, higher bond yields to enlarge people nerves, the debt crisis in Europe and then gradually taken shape, Cushing crude oil inventories rose in Europe and the United States is poor manufacturing index increased market concerns about economic recovery again . Into the demand for off-season, petrochemical companies have chosen to cut prices in order to ease the pressure on the stock, the downstream factory operating rate remained 5-6 into actively enter the market to find the goods without change, the majority of businesses are not optimistic about the market outlook is expected to actively none other shipments, the buyer's market to buy up not to buy down in the late linear futures fell again to increase the market's cautious wait and see attitude, petrochemical enterprises / intermediate traders / downstream plants are caught in a dilemma, and the downturn in the market once again plagued polyethylene market. 1.1.2 of the domestic U.S. market review at a glance in contrast with the analysis of Table 1 the domestic U.S. market price product range manufacturers the beginning of the quote at the end of Price Change (+ / -) HDPE membrane material suppliers 1450-1530 1400-1480-50 traders 1430-14501400 -1420-30 hollow traders of drawing suppliers 1500-1540 1500-1540 0 traders 1500-1520 1460-1480-40 injection traders 1350-1430 1340-1420-10 1390-1420 1360-1390 -30 LDPE film material supply Manufacturers 1450-1530 1390-1480-50 traders 1400-1470 1380-1450-20 [...]

The domestic market PE prices in April 11

Quoted market varieties grades yesterday's closing price ($ / ton) real-time quotes ($ / ton) Change rate update Linyi no tax LLDPE 7042 Yangtze 9 970 9920 -50 10:10 of HDPE 9455F 10 350 10400 +50 10:10 of LDPE 2102TN26 to 10 620 10 600 9:50, 10:10 Qilu Chemical City tax-free LLDPE 7 042 9980 -20 of HDPE 6098 10 950 of LDPE 2102TN26 to 10480 Central Plains of LLDPE 7050 10530 10 480 -50 [...]

Gasoline and diesel prices will further compress the plastic products industry profit margins

The oil price increases for plastic products businesses, the most direct impact is that transportation and other operating costs will improve the operating profit will be significantly affected. The impact of this level is not reflected in the plastics industry, all raw materials and products related to road transport industry will be affected, while relatively low in the low-end value-added products of the plastics industry affected more obvious. Expected under normal circumstances, the majority of enterprises need to adjust the sales price to compensate for rising transportation costs caused by the loss of profits. Plastic raw materials, however, belong to the downstream petrochemical industry, which means that the refined oil price impact is not only acting on the top of the growth of the transportation costs. Since the international crude oil prices (WTI) exceeded $ 100 / barrel, oil prices climbed to $ 110 level, the impact of cost pressures for the petrochemical industry profits is reflected in the two plates of the oil refining and chemical. Gasoline and diesel products, such chemical products like plastic more affected by the laws of the market impact, costs and supply and demand directly about price fluctuations. From the graph, since the beginning of this year, the price of the most representative types of plastic raw materials PE and PP to maintain the rising trend, especially since March, rising to accelerate performance. Recent callback rate of the oil in the short term to reverse the preliminary cost-pressure. From the point of view of the petrochemical companies, chemical products, with full production and marketing control over the plate, when the loss cost factors, and naturally the way through the adjustment of product structure to reduce the loss of scale. March Sinopec overall reduction of about 80,000 tons of PE and PP production in Sinopec PE and PP total of 640,000 tons per month, accounting for 12.5%, this factor became the main driving force to accelerate the market rose in March, the real could be considered as pre-high oil prices, driven by factors. After the NDRC raised the prices of refined oil, petrochemicals overall profit margin should be effective in improving a little relaxation, should enhance the urgency of plastic raw material prices, however, the reality is that the support prices of chemical products are further strengthened. On the one hand, the profits of the two plates is an independent assessment, and mitigation of the refining segment does not change the chemical plate to withstand the pressure. Other hand, as the overall arrangement of the entire petrochemical enterprises, the production will inevitably due to the deviation of the profit level and tilt. Spring agriculture and transport gasoline and diesel demand facing the peak, the price has just raised, petrochemical further increase oil production, while relatively Yajian chemical naphtha supply to become the inevitable choice of the logical. Sinopec recently introduced measures, the Corporation under the five petrochemical companies will further reduce ethylene production totaled 30,000 tons in March, the yield of refined oil is about 10 million tons. This adjustment reflects the policy and market factors, on the other hand can also be seen operating profit of the production adjustment. From the situation in previous years, this adjustment is not uncommon, further enhanced the yield reduction is undoubtedly more effective means of price increases, the chemical class including plastic raw materials, including product sales price will further enhance the. The above analysis illustrates, it is easy to see that the downstream plastics industry, including most of the other downstream of the chemical raw materials industry will face the dual pressures of the refined oil price, transport costs and raw material costs will rise, and the supply of raw materials may face a shortage problems. This effect will continue for a longer period of time, but for the added value of the relatively high plastic raw materials and products, some cases may also be the opposite. Current understanding of the information display, Yanshan Petrochemical this month in the task to complete production cuts at the same time, reduction of LDPE production capacity fully transferred to the EVA production, EVA prices far higher than that of LDPE, Yanshan Petrochemical has been considered the importance of reducing losses means. The same, other domestic EVA manufacturers producing the same will not be affected, which may result in a short period of time EVA supply relative increase, thereby affecting the price movements, and downstream manufacturing a relatively positive.

2012 domestic PE market continue to be subject to the impact of the macroeconomic environment

Domestic PE industry in 2011 is almost difficult to see the significant fluctuations in market struggling to survive a difficult situation, but to calm appearance. From domestic and foreign inflation gradually deepened to the outbreak of the debt crisis in Europe and America, one after another negative factor for continuous drag on the domestic PE market. Series of factors that ultimately attributed to the deterioration of the macroeconomic environment. 2012 a new round of market have already started this year, how the market evolved, Xiaobian think it still depends on the macroeconomic side of the situation changes. Standard & Poor's Ratings Services recently published forecast of euro area debt crisis, the euro area in the second half of this year and enter the occasion of the 2013 trend of gradually emerging from the moderate economic recession, but the risk of economic deterioration remains. According to the agency's baseline forecast 2012-2013, 2012 the euro area overall Gross Domestic Product (GDP), or flat, in 2013 an increase of 1%; risk of euro zone economic situation of 60%, while another possibility - the second economic recession probability to 40%. Combined with the European Central Bank is expected, with the deepening of the crisis of sovereign debt, the euro area banking sector credit conditions in the first quarter of this year, a sharp tightening in the fourth quarter of last year on the basis of further tightening. So, the financial markets remain worried about the future of the euro area, for domestic PE market in the second quarter of the market has played a negative role. The United States is still in the economic recovery phase, in 2012, starting the year on the occasion of its domestic manufacturing index and employment index performance is acceptable, but the Congressional Budget Office forecast the U.S. federal budget deficit will likely be the fourth consecutive year, more than one trillion U.S. dollars . This can be said for America's future economic development is a heavy burden. 2012 for China's economic development is also very important year. The debt crisis in Europe and weak U.S. economic recovery will lead to a drop in demand, and act as a drag on export-dependent economy, how can this year, China's dependence on external demand into dependence on domestic demand, and thus boost economic growth by boosting domestic demand. Central Bank lowered deposit reserve ratio by the end of 2011, and in domestic fiscal policy and monetary policy on the release of the active signal. Central is still supporting policies on taxation and financing of small and medium micro-enterprises to give some support. Standard & Poor's expects that in 2012 China's economic growth will continue to keep growth above 8%. Off to a good start after the beginning of the year the market for domestic monetary policy easing expectations, coupled with the domestic petrochemical production costs higher domestic PE market ushered in the New Year, the market spot price level was rising. LLDPE prices rose to 200-300 yuan / ton, compared to years ago, HDPE / LDPE or 100-200 yuan / ton, the price increases, but the overall turnover of the performance of light. HDPE is the Festival of the most active species, the membrane level and drawing class high degree of concern; optimistic about the performance compared to HDPE, LLDPE and LDPE is slightly dull, the market supply more business inquiry intention. Downstream of factory operation rate is not high, most factories do not return to normal production, coupled with years ago, a small amount of stocking factory intent to purchase is very weak. Traders, looking forward to the factory after another purchase, but the actual needs of start will take time. Future PE market changes, Xiaobian that changes in domestic and international economic environment will play a decisive role. The relatively loose monetary policy in China will inject a certain degree of liquidity to the market, combined with the central financial support policies for SMEs may boost factory initiative and to some extent, compensate for the loss of export orders. Factory orders increased production initiative, to pick up in demand, market performance is more optimistic.

PE Market Watch February 2012

1 this month, the PE market depth observation 1.1 the domestic market 1.1.1 Domestic RMB market review and analysis of domestic PE market prices this month, beginning of a more stable, late entered the upstream track price fluctuations within a narrow range of LDPE / HDPE, LLDPE cost support rose significantly. Spring Festival return, the business outlook have certainly expected better, but a firm offer trading performance has forced businesses disappointed, mainly due to weak demand for the performance of the euro zone debt crisis concerns and downstream products factory. This month, Greece's debt restructuring affecting the people, by late this month in Greece through a debt restructuring agreement, financial assistance, in the long run, Greece, the probability of default is still there. Slow economic recovery in Europe and America have a direct impact on China's export trade, coupled with the domestic economy, tight liquidity, the negative factors restricting the development of downstream plastics industry. 2 mid to late central bank kept quasi-down domestic liquidity to be released, but this good news in the short term is difficult to form an effective impetus to the market. The market has no shortage of good news this month, the emergence of Iran this month, the official claimed to stop oil exports to Britain and France, the continuous rise of oil prices in this factor under the influence of this month, WTI oil prices increased about 13 U.S. dollars / barrel. Rising oil prices, domestic PE petrochemical manufacturers and production costs higher, but subject to the slow digestion stocks of downstream industries, petrochemical still maintain prices basically stable, to ensure that the reasonable market price level. In February, LDPE price range at 10700-10900 yuan / ton, of LLDPE price range at 9800-9900 yuan / ton. 1.1.2 The domestic U.S. market review at a glance in contrast with the analysis of Table 1 the domestic U.S. market price product range manufacturers the beginning of the quote at the end of Price Change (+ / -) HDPE membrane material suppliers 1350-1380 1380-141030 traders 1350-13801360 - drawing supplier 139 010 1380-1420 1460-1500 80 1380-1400 1400-142020 injection traders traders 1330-1350 1300-1360 1300-1360 0 hollow traders 1340-1360 10 LDPE film material suppliers 1360-14001400 -150 070 traders 1350-1390 1360-1400 [...]

October 21 to October 28, 2011 polyolefin Change rate table

Product Name price collection to / specification grade 10 ($ / ton) of 21 October 28 ($ / ton) spread margin% of LDPE Shandong / melting means 2 11.65 thousand 11.9 thousand +250 2.15 HDPE East / membrane material 1110011700 +600 5.41 LLDPE Shandong / melt 2 9200 9800 +600 6.52 of PP homopolymer / T30S 11.4 thousand 11 300 -100 -0.88 PP copolymer Shandong / EPS30R to, 12550 12 450 -100 -0.80 PP pipe Beijing / PPB4228, 12.1 thousand 12 000 -100 -0.83 PP powder Shandong / 045 11 100 11000 -100 -0.90 EVA Xiamen / 7350M 19 000 18 300 -700 -3.68 plastic sheeting [...]

October PE Market Review and Market Outlook for November

1 this month, the PE market depth observation 1.1 the domestic market 1.1.1 Domestic RMB market review and analysis of Figure 1 domestic PE market price chart Festival PE market in October did not reach the the preganglionic expected, the traditional peak season of "gold, nine silver and 10" quietly go short, trading weak to continue to drag on the overall market trends. On the 24th market to reverse early decline, rebounded sharply, bottoming out after the turnover situation improved, the overall market trading atmosphere quickly warmed up. LLDPE / LDPE varieties of performance this month is still evident after 20, just within a few days, LLDPE compared to the high point in the month, a decrease of 800 yuan / ton, LDPE fell 400-450 yuan / ton, while the low pressure by the market supply shortage support the general price change. Finalize the solution for the debt crisis in the euro zone has become a mainstay of late this month in positive support; twice the EU summit resolution is increasingly clear, Europe and the United States stock and futures markets, and international oil prices, subject to drive also rose sharply. Good conduction, changed the tide of domestic PE spot market, a sharp rise in market prices. Petrochemical aspects of the end of plan implementation of measures to limit shipments, part of the petrochemical area gradually raised prices this good news will continue to stimulate the market strength. Traders for market confidence restored, the operation of multi-market actively, market trading atmosphere go thick. Downstream plant purchases this month enthusiasm is acceptable, agricultural film, packaging film industry needs to play a supporting role for the market price of the end. 1.1.2 of the domestic U.S. market review at a glance in contrast with the analysis of Table 1 the domestic U.S. market price product range manufacturers the beginning of the quote at the end of Price Change (+ / -) HDPE membrane material suppliers 1380-1400 1270-1330-90 traders 1350-13701300 -1320-30 the brushed suppliers 1420-1460 1320-1360-100 1380-1400 1320-1340-60 injection traders traders 1330-1350 1250-1270-80 hollow traders 1320-1350 1250-1280 -70 LDPE film materials [...]

23 to 30 September 2011 polyolefin Change rate table

Product Name price collection to / specification grade September 23, ($ / ton) September 30 ($ / ton) spread margin% of LDPE Shandong / melting means 2 12.25 thousand 12 100 -150 -1.22 HDPE East / membrane material 11,200,112,000 0.00 the LLDPE Shandong / melt / T30S 12.4 thousand 12.1 thousand -300 -2.42 of PP copolymer Shandong / EPS30R to, 12.75 thousand 12.9 thousand 150 1.18 PP pipe / B8101 13300 12 900 -400 -3.01 PP powder Shandong / 045 12200 2 10550 10100 -450 -4.27 of PP homopolymer 11.75 thousand -450 -3.69 the EVA Xiamen / 7350M 20 100 19 800 -300 -1.49 plastic sheeting [...]

September 2011 Review of the PE market

1 this month, the PE market depth observation of 1.1 domestic market 1.1.1 Domestic RMB market review and analysis of the domestic PE market price chart PE market in September smooth deadlocked less than a half months, the market as oil price shocks downstream Zoudie. Downstream demand is low, resulting shipping difficulties, the market worried about the state of mind is always coiled to go, but multiple negative factors of oil prices, stock market, futures release off the loss flawless panic in late dispersion. The most dramatic market decline after the 20th stage, while the intraday futures repeated shocks to a greater hesitation mentality of buyers and sellers. The market reaction was undoubtedly the most dramatic of LLDPE futures play a key role in which the price or even inherent 200-300 yuan / ton on 1 repeatedly. Fundamentally speaking, the reason for the role of oil prices and futures can be amplified to such a degree, largely due to the lack of downstream demand, resulting in business concerns the hands of supply stuck, and the resulting concerns about the state of mind to increase. Petrochemical series of listing and price adjustment strategy, but inventory levels continue unabated, and the market price often decreases, be able to ensure this level out in the current, it is wishful thinking. The relative surplus of imported resources still exist, funding constraints led to the letter of credit financing of imports is still difficult to curb, which is caused by one of the reasons for the large market now downward pressure. 1.1.2 of the domestic U.S. market review at a glance in contrast with the analysis of Table 1 the domestic U.S. market price product range manufacturers the beginning of the quote at the end of Price Change (+ / -) HDPE membrane material suppliers 1400-1420 1380-1400-20 traders 1390-14101350 -1370-40 the brushed suppliers 1480-1520 1420-1460-60 1380-1400 1330-1350 -50 1460-1480 1380-1400-80 injection traders traders hollow traders 1370-1400 1320-1350 -50 LDPE film material suppliers 1650-1680 1550-1580 -100 traders 1550-1620 1480-1550 [...]

August PE Market Review and Market Outlook for September

1 month depth observation of the PE market 1.1 Domestic market 1.1.1 Domestic RMB market review and analysis of Figure 1 domestic PE market price chart PE market in August a sudden reversal of July, an upward trend since early this month that no longer exist. Although the U.S. debt ceiling to be resolved within the time limit, but the market did not eliminate concerns about the U.S. debt problem. In particular, accident & P lowered its sovereign credit rating to AA + market uproar, comprehensive crash in global stock and commodity markets, the first time. Fall in oil prices the next day, still waiting to see the domestic PE market immediately follow-up of LLDPE prices to fall into the price of 9900 yuan / ton once panic, fell the same day, the market picked up 300 yuan / ton, stabilized, but never can not return to the previous week's level. Followed by worries about the economic outlook has been plagued by the global stock and commodity markets, PE market has been in a sluggish state. Although the domestic petrochemical maintenance more significant impact on the market, demand is always suppressed, but outlook worries mentality will make the maintenance impact on the supply of the very limitations. Overall the current situation, the trend is still uncertain due to crude oil, regardless of geo-political or economic factors still do not see the direction, which made the seller mentality on the PE market has become particularly cautious, for the suppression of the demand is very obvious and turnover is difficult to enlarge weakened support for the surface of the supply and demand factors, market weak performance temporarily occur is difficult to change. 1.1.2 of the domestic U.S. market review and analysis of a domestic U.S. market price comparison at a glance product range manufacturers in early offer (U.S. $ / ton) at the end of quotations (U.S. $ / ton) Change (+ / -) HDPE membrane material suppliers 1380-14201380 -14 200 traders the 1380-1400 1430-1450 -50 brushed suppliers 1400-1440 1480-1520 +80 1480-1500 1430-1450-50 injection traders traders 1430-1450 1380-1400-50 hollow traders 1420 - 1620-1650 1650-1680 +30 traders 1580-1650 1450 1370-1400 -50 LDPE film materials supplier 1550-1620-30 [...]