Oil & Gas and Petrochemicals: Singapore GRMs remain strong; Alchemy

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Singapore GRMs remain strong; marketing underrecoveries
rise further
Highlights
 For the week ending 01 April 2011, benchmark Brent crude oil prices continued to remain high
because of concerns about the Middle East, and averaged US$116.5/bbl compared to
US$115.3/bbl in the previous week.
 The spread between light and heavy crude oil remained firm, averaging US$6.9/bbl. The spread
between Brent and WTI remained high and averaged US$11/bbl.
 Singapore GRMs continued to remain high during the week and averaged US$8.6/bbl. GRMs
averaged US$6.9/bbl for the 4QFY11.
 For the week, cracks on diesel (HSD), petrol (MS) and jet fuel (ATF) averaged US$22.93/bbl
(US$23.23/bbl), US$14.67/bbl (US$14.01/bbl) and US$23.96/bbl (US$24.23/bbl), respectively.
 Refining margins have been trending upwards for the past three quarters due to strong
gasoline, HSD and SKO cracks. Since the Japan earthquake, diesel and SKO cracks have jumped
to US$23/bbl. (For product spreads movement, refer to Exhibit 1.)
 In April, under-recoveries on MS, diesel, LPG and SKO are expected to rise because of the rise
in oil prices.
Estimated margins on auto fuels:
HSD: -`14/litre (-`10.6/litre in March 2011)
MS: -`2.4/litre (-`0.27/litre in March 2011)
Estimated under-recoveries on cooking fuels:
LPG: `343/cylinder (`302/cylinder in March 2011)
SKO: `26.1/litre (`23.3/litre in March 2011)
 Ethylene prices increased during the week, leading to an increase in cracker margins. Cracker
margins, during the week, averaged US$177/tonne against US$152/tonne in the previous
week. Average cracker margins improved in 4QFY11 (US$180/tonne compared to
US$46/tonne in 3QFY11) following the rise in ethylene and propylene prices.
 The rise in ethylene prices during the week led to a decline in non-integrated PE margins. Nonintegrated
PE margins averaged US$102/tonne, compared to US$106/tonne in the previous
week.
 Integrated PE margins expanded during the week and averaged US$365/tonne compared to
US$345/tonne in the previous week. Lower ethylene cash costs and higher HDPE prices led to
margin expansion. 4QFY11’s average integrated PE margins are US$378/tonne as against
US$364/tonne in the December 2010 quarter.
 PP margins increased to US$109/tonne compared to US$99/tonne in the previous week.
4QFY11’s average PP margins are US$130/tonne as against US$149/tonne in the December
2010 quarter.
 PVC margins averaged US$349/tonne compared to US$354/tonne in the previous week.
4QFY11’s average PVC margins are US$329/tonne as against US$299/tonne in the December
2010 quarter.
 PFY and PSF margins in April 2011 averaged `19.13/kg (`20.16/kg last month) and `30.8/kg
(`29.12/kg last month), respectively.