ETHYLENE

Ethylene prices plummeted by fifteen dollars in Asia in the week of December 17, 2007 to US$1250/MT. Falling prices can be attributed to a sharp price dip in downstream MEG values on one hand and chances of a possible supply increase from Taiwan next month. Spot MEG prices have plummeted by over US$80 a ton over the past fortnight. Hence, ethylene prices continue to face resistance from downstream MEG producers who are reluctant to purchase ethylene cargoes at current values. Supplies are also expected to be abundant from Taiwan next month as Taiwan's Formosa plans to shut down its metathesis unit at Mailiao for a month long turnaround, rendering surplus ethylene as feedstock at the rate of 125,000 tpa.