We see varied demand trends across regions through April and into Mayalthough plant outages (in both upstream and downstream) make its difficult toanalyze “true” level of demand for some products. Europe benefitted fromusual seasonal uplift and export demand with ethylene margins up 28% (overMarch) helped by the anticipated catch-up in ethylene prices. US was robustsupported by the domestic economy although supply was impacted by crackeroutages (five crackers currently offline for maintenance). Asia was mixed withimprovement in some product chains (e.g. propylene, butadiene) but weaknessin others (e.g. ethylene) due to significant outages in downstream derivatives.

　　Ethylene & propylene: In Europe, ethylene demand was strong in April(and so far in May) due to usual seasonal uplift, good demand fromderivatives units (despite some planned/unplanned derivative outages)and higher export demand. Propylene demand remained robust throughApril helped by strong demand from polypropylene and propylene oxidealthough propylene off take was impacted by unplanned derivativeoutages. However, the situation improved somewhat in May with fewerunplanned outages and consequently, slightly stronger propylene off take.

　　Western Europe ethylene margins increased 28% month-on month (to$499/ton) in April helped by the catch-up in ethylene prices. In Asia,ethylene demand weakened somewhat in April (from March) due to theweakness in downstream derivatives although supply remained tight dueto ongoing and upcoming cracker outages. However, propylene demandwas robust with supply constraints resulting in slightly higher prices (+4%month-on-month) and a more balanced market. In the US, ethylenedemand remained healthy in April (with prices up 2% month-on-month)amidst heavy cracker turnarounds (five crackers currently offline formaintenance). Propylene benefitted from healthy domestic demand andsupply constraints (cracker outages and less co-product propyleneproduction with ethane regaining favored feedstock position).

　　Butadiene: In Europe, the butadiene market was supported by gooddomestic demand and strong exports to Asia whilst supply was impactedby planned/unplanned outages. Consequently, prices in April increased18% month-on-month also supported by higher feedstock costs andincrease in synthetic/natural rubber prices. In Asia, butadiene demandwas healthy (with improving demand in tire market) amidst several plantshut-downs. In the US, domestic demand trends softened a bit in Aprilbut leading indicators (e.g. miles driven) and solid fundamentals for OEand replacement tire markets point to stronger market in coming months.

　　Benzene: In Europe, benzene demand was impacted by several derivativeturnarounds (e.g. in styrene, where 13% of the European capacity wasoffline in April, and MDI) although supply was also impacted by upstreamoutages. In Asia, benzene prices increased 2% month-on-month butdemand from styrene was impacted by plant shutdowns. In the US,benzene demand was strong in April (prices up 23% month-on-month)driven by strong export demand for styrene.