Keyuan Petrochemicals Inc. and Hangzhou Zhongce Rubber Company Limited Agree to Jointly Develop Commercial Applications for SSBR

NINGBO, China, June 28, 2011 /PRNewswire-Asia-FirstCall/ -- Keyuan Petrochemicals, Inc. (Nasdaq: KEYP) ("Keyuan or the "Company"), a leading merchant manufacturer of various petrochemical products in China, today announced that KEYP and Hangzhou Zhongce Rubber Company Limited "Hangzhou Zhongce") have formally agreed to jointly develop commercial applications for Solution Polymerization Styrene Butadiene Rubber ("SSBR").

"This agreement is another example of our ongoing commitment to develop new products using our innovative technologies," began Chungfeng Tao, Chairman and Chief Executive Officer of Keyuan. "Hangzhou Zhongce is a proven leader in tire production with strong R&D capabilities. Sales of car tires worldwide were $140 billion in 2010(1), which is the largest user of SSBR today, especially for high gear radials. By engaging early in this technology, we expect to gain an advantage by developing commercial applications for SSBR in new markets and capitalizing on a significant growth opportunity."

Tires using SSBR are safer, more fuel efficient and have a lower environmental impact than existing products(2). The EU is encouraging the use of more environmentally friendly tires by enforcing stricter labeling requirements starting in November 2012(3). China is still in the early stage of applying SSBR into tire production, but the market prospect is promising.

Keyuan is working with researchers from Hangzhou Zhongce Rubber Company Limited to develop SSBR over the next several years. The Companies will share the rights to products and technologies developed from this cooperation. Upon successful development of SSBR, Keyuan will be able to produce this new product using the same facility of SBS (Styrene-Butadiene-Styrene) that is currently under construction.

About Hangzhou Zhongce

Hangzhou Zhongce Rubber Company Limited produces various tires including radial, truck, passenger car, industrial, agricultural, motor cycle, bicycle, wheel-barrrow, rubber crawler belt, and tube rubber products. The Company's current product line is offered through 14 series containing more than 2230 tire products. The Company's tire products have passed China's product quality authentication process and are authorized users granted by the US Department of Transportation (DOT), Economic Commission of Europe (ECE) and Brazil INMETRO. In 2004, the company passed ISO/TS16949 automobile quality control system authentication. For more information, please visit: http://www.chaoyang.com/english/about.asp.

About Keyuan Petrochemicals, Inc.

Keyuan Petrochemicals, Inc., established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, Co. Ltd., is located in Ningbo, China and is a leading independent manufacturer and supplier of various petrochemical products. Having commenced production in October 2009, Keyuan's operations include an annual petrochemical manufacturing design capacity of 720,000 MT for a variety of petrochemical products, with facilities for the storage and loading of raw materials and finished goods, and a technology that supports the manufacturing process with low raw material costs and high utilization and yields. In order to meet increasing market demand, Keyuan plans to expand its manufacturing capacity to include a SBS production facility, additional storage capacity, a raw material pre-treatment facility, and an asphalt production facility. For further information please visit: www.keyuanpetrochemicals.com.

Safe Harbor Statement

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. Keyuan Petrochemicals, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form S-1, as amended. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

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