In Europe January OX contract demonstrated a rise of EUR40/tonne

(ICIS) -- The European January orthoxylene (OX) contract has settled at EUR960/tonne (USD1,215/tonne) - a rise of EUR40/tonne from the previous month, two producers and two consumers confirmed on Monday. The settlement was agreed on a free delivered (FD) northwest Europe (NWE) basis. Buyers and sellers said the increase is being attributed to the euro-dollar exchange rate, as well as pricing trends in the US and Asia and current market conditions.

⌠The price went up based on the euro exchange rate and energy costs, a producer said.
A buyer said that in addition to the above reasons, prices had increased because producers want to reclaim some margin. The buyer also said: ⌠January demand has been fine, not a very good month, but better than December.
A lack of transparency prevails in the OX spot market. However, prices are firming on export demand, with traders notionally assessing values at USD1,330-1,400/tonne FOB (free on board) Rotterdam.

Despite weak domestic consumption because of poor macroeconomic conditions, derivative phthalic anhydride (PA) demand is also firmer than in December because of restocking. Additionally, exporters say overseas buying interest for European material is growing, and exports to the Middle East, Asia and Africa have increased sharply in January.

MRC

(ICIS) -- Shares of petrochemical companies in Asia tumbled on Monday on concerns over a worsening debt crisis in Europe after Standard & Poor's (S&P) lowered the credit ratings of nine countries in the eurozone. Asia is vulnerable to the economic woes of the industrialised West because Asia is reliant on exports for growth. Exports from Asia will be badly affected if another recession were to hit the US and the eurozone.

At 12:44 hours Singapore time (04:44 GMT), Mitsubishi Chemical was down by 0.95%, Mitsui Chemicals slipped by 2.57% and JX Holdings declined by 2.39%, with the benchmark Nikkei 225 index dipping by 132.26 points or 1.56% to 8,367.76.

In South Korea, Kumho Petrochemical declined by 5.72%, SK Innovation fell by 3.22%, LG Chem slipped by 0.87% and SK Innovation eased by 2.23% as the KOSPI composite index retreated by 27.56 points or 1.47% to 1,848.12.

In Hong Kong, Shanghai Petrochemical was down by 0.67% and PetroChina fell by 2.0% as the Hang Seng index declined by 182.57 points or 0.95% to 19,021.85.

The China Shanghai composite index decreased by 12.60 points or 0.56% to 2,231.98.
Recession risks have heightened in the eurozone after France and Austria lost their AAA investment grade sovereign rating, while Italy, Spain and Portugal received a two-notch downgrade last Friday.

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(ICIS) -- Saudi Aramco has signed a joint venture agreement with China's state-owned oil refiner, Sinopec, to build a 400,000 bbl/day refinery in Yanbu on the kingdom's Red Sea coast, the country's official news agency said over the weekend.

The project, named Yanbu Aramco Sinopec Refining (YASREF), will begin production in the second half of 2014, Saudi Press Agency (SPA) said in a report on its website. YASREF will process Arabian heavy crude oil to produce refined products for the domestic and global markets, according to a separate statement by Sinopec.

The refinery will be able to produce 90,000 bbl/day of gasoline, 263,000 bbl/day of ultra-low sulphur diesel, 6,300 tonnes/day of petcoke and 1,200 tonnes/day of sulphur, Sinopec said. State-owned Saudi Aramco will hold a 62.5% stake in the refinery and Sinopec will own the remaining 37.5%, SPA said.

The cost of the project should be within USD10bn (EUR7.9bn) including debt, Khalid al-Falih, Aramco's CEO and president, was quoted as saying by Reuters at the project's signing ceremony.
Meanwhile, Saudi Aramco is planning to invest in capacity additions abroad as well as new refineries in Al-Jubail and Jizan and the revival of a plan to expand the refinery in Ras Tanura, the report said.

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(Sabic) -- SABIC's Innovative Plastics business announced that its manufacturing facilities in Campinas, Brazil and Tortuguitas, Argentina, are now certified to produce U.S. Food and Drug Administration (FDA) - compliant and biocompatible resins for the fast-growing South American healthcare market to help slash lead times, reduce inventory costs and increase flexibility in material purchasing.

Medical markets in eight Latin and South American countries - Brazil, Mexico, Argentina, Chile, Venezuela, Peru, Colombia and Cuba - are expected to demonstrate a compound annual growth rate (CAGR) of 4.6 percent between 2008 and 2013, reaching U.S. USD9.2 billion, according to Espicom Health Intelligence.

To meet this increasing demand, SABIC is committed to providing local customers fast and easy access to high-performance materials - such as biocompatible Lexan HP polycarbonate (PC) resins - and technical resources that they need to bring the next generation of medical applications to market.

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(Arabian oil and gas) -- At the signing ceremony for a USD10 billion new 400,000 bpd refinery project at Yanbu with China's Sinopec, Al-Falih said Aramco would hit 8 million barrels capacity ⌠over the next decade, according to a Reuters report.

While international oil companies such as Chevron are shying away from further downstream investment as refining margins tumble to break-even levels, Al-Falih has committed Aramco to graduating from the world's largest oil producer to becoming the world's largest single vertically integrated energy company, as a part of a national strategy for the Kingdom to become a downstream hub for emerging south-east Asian markets.

"Let me stress that the various world-class local and international refining and petrochemical investments Saudi Aramco is making are a testament to our firm belief that the downstream remains an attractive and profitable business," Al-Falih said on Saturday, according to Reuters.

The company is already committed to expansion projects at Jubail, Jizan and Ras Tanura, which is already the world's largest refinery. Al-Falih said the downstream business of Aramco ⌠will be a USD60 billion business by the time we are done building.

MRC