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November 2010

MELAMINE MARKETS& APPLICATIONS

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Melamine

Limitless possibilities now & in the future

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Melamine is not for human consumption

Melamine should never be added to any food product

Including pet food

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Principal characteristics make melamine chemically unique:

Stability - Highly resistant to heat and physical / chemical degradation

Structure – when added with other chemicals and chemical compounds provides surface properties like hardness, gloss and scratch resistance

Nitrogen content of 66 % allows it to be flame retardant and moisture resistant

Melamine unique qualities

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moulding powders; 8%

Others; 8%

Adhesives; 29%

LPL; 36%

HPL; 11%

Coatings; 8%World Market moulding powders; 4%

Others; 16%

Adhesives; 8%

LPL; 29%

HPL; 21%

Coatings; 22%

Americas 72% in laminates and coatings

Americas

Melamine in the………….

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ApplicationCoating Resins

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Wood Based PanelsOthers

High Pressure Laminates (HPL)Low Pressure Laminates (LPL)

Adhesives, resins for wood-based panels

42% 58%

Melamine Applications in the Americas

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Application

Laminates

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Medium-density fiberboardPaper Impregnation

More Applications

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Melamine in laminatesThe melamine molecule typically multiplies horizontally

This reaction is why melamine works so well for surfaces

High Pressure Laminates are typically surfaces

Low Pressure Laminates are typically vertical

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ApplicationMoulding

Compounds

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Excellent Durability Versatility High wear resistance Low emissions

Benefits found by producers of MF Resins

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ApplicationConcrete

Plasticizers

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ApplicationFlame

Retardants

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ApplicationFoam

Products

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Glues/Adhesives in Wood Based Panels

   Particleboard (PB) and Medium Density Fiberboard (MDF) Purpose: to reduce formaldehyde emissions Goal: achieve CARB (California Air Resources Board) Phase 2

compliant (note: Federalized in July 2010 via US Congress and signed by President Obama)

Usage: 1-2-3% in all Urea Formaldehyde (UF) resins 2011 demand: 15-20kt

Flame retardants

Foam products for bedding and furniture Purpose: reduce deaths as result of fires Goal: meet federal guidelines that vary between products Usage: added as melamine crystal to polyols 2011 demand: 1-2kt

Paints

Purpose: allow the safe exit of persons from buildings Goal: meet local requirements ie New York City Housing buildings Usage: additive in dry form to specialty paints 2011 demand: <.5kt

New and increasing applications

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Supply/Demand DynamicsChina is and will continue to be the wild card

o Antidumping case in the EU is projected to rearrange the Chinese focus from Europe to ROWo Shift in natural gas in winter from industrial to residential needso Older, less efficient plants are not projected to remain viableo In past few years China had to export ~150kt for global supply/demand to be in balance

 Japanese production is expensive vs rest of world

o Will both Nissan and Mitsui continue? Europe’s natural gas is expensive vs rest of world

o Will current capacity continueo Total cost due to raw materials (natural gas/ammonia/urea) & social systems make for

expensive product Middle East has new capacity in Qatar but majority must be exported

o Iranian production has limited outletso No new capacity announced

 Americas

o Only producer was Cytec in Louisiana, prior to MHTL coming online in recent monthso Americas has been net importer for ~10 yearso Cytec and MHTL combined will shift Americas to a net exporter

 General

o Melamine plants typically don’t run at full rates year after yearo Currency fluctuations cause shifts in geographic focus

 

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Silo to Shipping in Trinidad

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http://www.surfaceandpanel.com/Under Education Tab

In the early 1900’s the first plastic laminate material was made by impregnating kraft paper (similar to brown bag paper) with phenolic resin and compressing it under high temperatures and pressure in a process called thermosetting that irreversibly cured the resin. The resulting material was resistant to heat, water, chemicals and electrical current………. For more -

The Evolution of Sustainable, Cost-EffectiveDecorative Surface Materials

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http://video.bobvila.com/m/21321098/manufacturing-laminate-flooring.htmLaminate Flooring

http://www.youtube.com/watch?v=wW1RY7FZjFs&feature=relatedCorrugated Paperboard

http://www.youtube.com/watch?v=GBrgZihZhjs&feature=relatedChipboard Desks

http://www.youtube.com/watch?v=qitenYvpSx4&feature=relatedMDF and HDF

Videos of Manufacturing some of melamineEnd uses

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• Global demand continues to increase

• Growth rates vary in each area of the world

• Economy improves as consumer confidence increases

• Supply of melamine improves as MHTL/Qatar production

increases to full capacity

• Moderate improvement in stocks from Q2 onward

• Supply from China into Europe remains in doubt due to

antidumping claim in the EU

• Price are stable through Q1, after increases every Q of 2010

• Prices decrease slightly then stabilize after Q2

• Market welcomes MHTL’s new capacity

• MHTL’s is able to achieve market penetration/share without being disruptive

• Global Supply/Demand continues to be the major driver relative to pricing

Melamine Market Outlook 2011

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Limitless possibilities now and in the future

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And………..

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And………..

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Thank you

QUESTIONS???