Freight rates for chemical shipping to Asia are expected to hover higher

(ICIS) -- Freight rates for chemical shipping from the Middle East to Asia are expected to hover higher around USD 60/tonne (EUR 43/tonne) in April and May, mainly driven by the tight tonnage situation, industry sources said on Tuesday.

This reflects an increase of USD 5-10/tonne from January and early February, when freight rates for 10.000-15.000 tonnes of chemicals from the Middle East to northeast Asia were quoted at around USD 50-55/tonne, said two shipowners based in Dubai, United Arab Emirates.

Vessels were available at that time in the Middle East and Indian regions for prompt shipments, and were bolstered by a large number of palm oil ships arriving at the west coast of India with early-to-mid January shipments from southeast Asia.

However, stronger crude palm oil prices (CPO) in February and March led to fewer shipments of CPO from southeast Asia to the Middle East and Indian regions. This resulted in a reduction of available vessels for prompt shipments from the Middle East to Asia.

MRC

(ICIS) -- US ethylene contracts for March could rise by at least 4 cents/lb (USD 88/tonne, EUR 62/tonne), market sources said on Monday, citing higher production costs and a jump in spot prices. The 8% hike would be the second in as many months, as February ethylene settled at 49.00 cents/lb, up by 3.75 cents/lb from January. Market sources said ethane and spot ethylene were both lending support to the contract side.

Spot ethylene for March traded last week in a range of 58.500-60.625 cents/lb, rising from deals done at 50.750-52.000 cents/lb four weeks earlier.

Meanwhile, production costs rose as ethane, which accounts for more than half of US cracker feedstocks, posted a 7.6% gain in the period.

Mont Belvieu ethane ended Friday at 71 cents/gal, rising from 66 cents/gal in the week ended 4 March.

Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.

MRC

Among the companies that made the biggest investments in 2010 the following should be mentioned: Narodniy Plastik, Plafen, Veka Rus, Docke Extrusion, Polymerplast, Uralchemplast.

As we forecasted, there wasn't a quick recovery of investment activity concerning PVC conversion as well as other volume polymers. The reason for that was a ⌠stock of installed capacities in 2007-2008 when total gain in capacities of PVC conversion made 1 325 KTa whose potential remained unlocked in 2009. Taking into account that each second investment in equipment of PVC conversion was made at that period at the expense of borrowed funds (with average payback time for equipment equal to 4 years), we are forecasting mobilization of investment activity by 2012.

Detailed analysis of PVC market as well as short-term and long-term forecasts of its development are available in MRC Annual report ⌠PVC in Russia 2011.

MRC

(Azelis) -- Azelis Composites is currently looking to significantly grow its business in the Spain and Portugal regions. International Business Manager Serge Gradys explains: ⌠The name Azelis may be new to the Composites market but our presence and recognised technical competence is not. The origins, of what has become one of the fastest growing International Business Areas for Azelis, go back to the mid 1970s through Arnaud, one of the founding members of Azelis, in France and Eastern Europe and also through Tradex Colori in Italy, which also later became part of the Azelis Group. We have used our long established relationships and considerable technical knowledge to significantly grow our presence across Europe in recent years.

Azelis has more than 60 specialists working in the Composites IBA - 90% of whom have a technical background and around 50% have specialist composites expertise.

Sales have doubled into the traditional high volume composites sector over the past 3 years with the Nordic countries, UK and Benelux now well serviced by Azelis.

Azelis Composites is exhibiting at JEC Paris 29-31 March, stand no F25, building on its strong customer and supplier relationships.

MRC

(ICIS) -- Negotiations for March caprolactam (capro) in Europe will likely progress into April, with buy and sell ideas still far apart, a buyer said on the sidelines of the International Petrochemical Conference (IPC) on Sunday. ⌠The expectation is for sure below [an increase of] EUR 100/tonne. To be honest, with some [producers] we are quite far away, with others not so far, the buyer involved in the production of nylon (or polyamide) said.

Producers had earlier started with targets of an increase of EUR 150-200/tonne (USD 211-282/tonne), but have since revised these downwards in light of a sharp drop in demand for polymers following the Japan disaster. Producers' targets, though, were still at a range of plus EUR 100-170/tonne.

Despite this reduction in offtake and a rollover in the upstream March benzene contract, supply concerns allowed producers to remain bullish in their expectations for March capro agreements.

While acknowledging tightness in the market, the consumer said that margins for capro production were high and any increase in costs would need to be passed on further downstream as nylon margins had been squeezed considerably.

MRC