Iran threats to stop the flow of oil from the Gulf

(Reuters) -- Iran's threat to stop the flow of oil from the Gulf supported crude prices on Wednesday and put world shares on the back foot.

Tehran said on Tuesday it would stop oil transiting through the Strait of Hormuz if sanctions were imposed on its crude exports over its nuclear ambitions, a move that could conceivably trigger military conflict with economies dependent on Gulf oil.

Brent crude oil steadied above USD 109 a barrel after climbing more than a dollar in the previous session. Prices have surged over 5 percent since December 16.

"The only way Iran would actually close Hormuz is when it is attacked and war breaks, but such a possibility appears low as no country would want to take the risk when growth worldwide was likely to slow down," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.

But he added the tensions would be a major source of volatility in 2012 along with the euro zone debt crisis. He expected Brent to trade between USD 105-110 in 2012.

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(Reuters) -- Iran's threat to stop the flow of oil from the Gulf supported crude prices on Wednesday and put world shares on the back foot, while looming Italian debt auctions hampered the euro.

Tehran said on Tuesday it would stop oil transiting through the Strait of Hormuz if sanctions were imposed on its crude exports over its nuclear ambitions, a move that could conceivably trigger military conflict with economies dependent on Gulf oil.

Brent crude oil steadied above USD 109 a barrel after climbing more than a dollar in the previous session. Prices have surged over 5 percent since December 16.

"The only way Iran would actually close Hormuz is when it is attacked and war breaks, but such a possibility appears low as no country would want to take the risk when growth worldwide was likely to slow down," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory Co.

But he added the tensions would be a major source of volatility in 2012 along with the euro zone debt crisis. Brent is expected to be traded between USD105-110 in 2012.

MRC

(commodityonline) -- The consumption of synthetic Rubber by the India's auto tyre industry declined by 5% to 24,010 tonnes in September 2011 against 25,323 tonnes same period last year, according to data provided by Rubber Board.

While, India's auto tyre industry consumed 1,54,887 tonnes in April-Sept 2011 as against 1,44,126 ton in the same period of the previous year.

India's synthetic rubber output fell by 10% to 8,421 tonnes in September 2011, while consumption declined by 3 per cent to 33,510 tonnes. While, the production was 9,320 tonnes and consumption at 34,480 tonnnes during 2010-11, reported PTI.

The Indian auto tyre industry consumed 1,54,887 tonnes in April-September 2011 as against 1,44,126 tonnes in the same period of the previous year.

Meanwhile, the total imports in April-September in this fiscal rose to 1,73,490 tonnes from 1,51,435 tonne in the same period last fiscal.

Synthetic Rubber is the raw material used to manufacture auto tyres.

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(chemmonitor) -- Europe-based companies considerably decreased capacities at their cracker plants in this quarter. For instance, the facilities operated at 70 percent rates in early-Q4, while last month capacities varied from 50 to 70 percent.

The rates cuts are attributed to the unfavorable sentiment in the market for polyolefins.

The situation in the Europe market is unlikely to improve in the first half of the following year. However, Europe is forecast to overcome the existing debt crisis by Q3, 2012.

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(ICIS) -- The solvents market in the Middle East and India is expected to be quiet in the first quarter of 2012 as players continue to monitor the impact of the Europe debt crisis on the GDP and interest rates in these regions, industry sources said.

Most players were buying on a need-to basis at the end of 2011, the importer added.
Other players were more conservative, with another Indian trader predicting flat demand in early 2012.
In the Middle East, the Europe debt crisis looks set to have a greater impact, said a distributor from the United Arab Emirates (UAE).

⌠Exports to Europe for paints and fibreglass products are affected, the distributor said. Acetone prices are likely to be stable at USD 920-970/tonne (EUR 708-747/tonne) CFR (cost & freight) Middle East in the first quarter, it added.

The outlook for isopropanol (IPA) demand in India is more optimistic and companies in the Middle East are building up their inventories.
IPA prices, which are at USD 1,170-1,230/tonne CFR India on 28 December, are expected to remain stable in January and stable-to-firm for February-March, said an Indian producer.
An Indian buyer said that prices are expected to be firmer in the first quarter, compared to the fourth quarter in 2011.

The Indian producer added that July-September may be the peak season for the pharmaceutical industry, which accounts for about 70% of the demand for IPA, which is used in the production of drugs in the industry.

Middle East prices are expected to increase in early 2012 as buyers are likely to stock up at the beginning of the year, with a distributor predicting prices to be at USD 1,200-1,220/tonne CFR Middle East.

A South Korean producer said: ⌠The base price for IPA should not go below USD1,150/tonne CFR India/Middle East in early 2012 as the acetone-based producers need the price increase to mitigate losses.

Meanwhile, the prices of ethyl acetate (etac) looks set to hold steady in 2012.
There is limited ethanol available in the market as the percentage of ethanol used to produce petrol-diesel blends have increased from 5% to 10%, said a producer in India.
Thus, ethanol prices are expected to be stable-to-firm, which will support etac prices as ethanol is a co-feedstock for etac, the producer said.

The producer added that etac prices are likely to be at USD 950-1,050 FOB Mumbai in the first quarter.
⌠Demand for etac in the first quarter looks slightly more promising as the packaging and paint industries may do some stocking up, the producer said.

The average price of ETAC in India is forecast to be at around USD 1,000/tonne CFR Mumbai in the first quarter of 2012, according to traders.
However, a source from UAE was less optimistic about the Middle East market. ⌠ETAC prices will continue to be stable at USD 980-1,020/tonne CFR Middle East, the source said.

MRC