POLYMER FEEDSTOCKS - ETHYLENE

Ethylene prices in Asia peaked to new highs, settling at US$1310/MT in the week of January 7, 2008. Spot prices have seen robust gains, rising on a combination of strong crude values on one hand and consistently firm demand on the other. South Korean suppliers have sustained selling offers above US$1,300/MT FOB Korea levels, as supply situation remains tight on account of an unplanned outage at Mitsubishi Chemical's 450,000 tpa No.2 cracker. On account of the supply paucity caused by this outage, ethylene cargoes from South Korea for January arrival, have been diverted to Japan. Similar volumes for Japan for February are expected to yield a pressure on prices. Interestingly, buying intentions from Taiwan remained bearish in anticipation of an ethylene supply glut from Iran's recently started 1 mln tpa Olefin-9 in Assaluyeh, currently running at 50% capacity.