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Ethylene Market Update � May 2012

Ethylene - the Main Ingredient in Poly Bags

The price fluctuation in the global poly market over the last several years has been anything but predictable. Dramatic volatility in polyethylene, polypropylene, and PVC has caused great uncertainty for both poly bag manufacturers and consumers alike.

These fluctuations hinge on the use of several raw materials key to poly bag production, most notably crude oil and natural gas, which not only fuels our cars and heats our homes, but are also the primary building blocks used to produce ethylene the main ingredient in poly bags.

An Uncertain Future

While the economic downturn had the effect of keeping the price of crude oil in check, instability in the oil-rich Middle East again has prices rising. Today's price of $96/barrel is up significantly from recent lows, meaning that consumers are again paying more at the pump, and poly manufacturers are confronting rapidly growing material costs.

Political uncertainty, an unstable global economy, Asian market pressures, changes in supply and demand, and global weather conditions continue to add to the volatility in crude oil prices. And the full impact of the unrest in the Middle East is difficult to predict. We will continue to monitor this situation closely, and provide updates as changes occur.