IKSRUSSIA

Brent crude oil, February 19, 2011

iks — Sun, 20 Feb 2011 18:46:09 GMT

Brent oil price holds at $103, crude oil supply in focus

Brent crude oil futures end the week’s trading session firm at $103 a barrel as crude oil supplies from Middle Eastern countries continues

to worry many, as uncertainty holds Brent oil at two year trading highs.

Brent Oil Futures – Closing Price

Brent crude oil futures for April 2011 delivery ended the week’s trading session at $103.06 a barrel on the ICE Futures Exchange, which is $1.65 higher than Brent’s close last week at $101.41.

Suez Canal Route Still a Concern

Brent oil futures have rallied on recent protests in the Middle East, in part due to worries about oil transport to Europe through Egypt’s Suez Canal.

Those gains, plus a supply glut at the US hub of Cushing, have reversed the typical relationship between ICE Brent and NYMEX WTI oil futures to record levels.

"Brent crude oil is likely being impacted by geopolitical tensions in the Middle East because of the potential impacts in the Mediterranean markets served by Brent.” noted Adam Sieminski of Deutsche Bank.

Analysts say the price of Brent, has been affected more than traditional benchmark WTI by events in the Middle East, because it is a reference price for oil produced in other areas, such as Africa and South America. Oil production interruptions also have helped keep Brent oil prices above $100 a barrel since the end of January.

February 19, 2011, Source: LIVE OIL PRICES

China's robust chemical market could be a bubble about to burst

iks — Sun, 27 Sep 2009 22:07:04 GMT

Separating the hard facts from the hype has never been harder in the Chinese market, which is either a huge speculative bubble, the lifeboat for the global chemical industry or anything in between

IT NEVER gets any easier trying to work out what's happening in China.

The country's economic rebound is sustainable and the global recovery is just around the corner, insist some industry sources.

Fears of an L-shaped recovery appeared to be receding as this feature went to press. The much hoped-for V-shaped bounceback was the more popular forecast.

There were plenty of pessimists still around, though, all too eager to rain on the parade.

As Winston Churchill so memorably said: "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."

This goes to the very heart of this argument - that the rebound in Chinese polymer and chemical demand might well have been mainly driven by traders who have taken their opportunities.

They, of course, don't care about prices tomorrow if they exit today.

Here is an attempt to separate the hard facts - if they really exist - from all the hype.

The Hard Facts on Polyolefins
High-density polyethylene (HDPE) imports rose by 94% in the first half of this year compared with the same period a year ago, according to China Customs.

Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments from overseas were up by 62% and 50% respectively, with polypropylene (PP) imports increasing by 50%.

Total PE imports were at 3.75m tonnes in the first half, versus 4.5m tonnes for all of 2008. Some of these extraordinary increases can be attributed to deep operating cuts by Chinese refiners and petrochemical producers in the wake of the fourth quarter (Q4) of 2008 economic collapse.

This created strong arbitrage opportunities. But a lot of polyolefins, particularly PE, might have ended up in the inventories of traders and distributors.

"While PE inventory levels up until May were low in bonded warehouses and normal at the first level of local distribution, they were very high at the second and third levels of distribution," says one major Asian producer.

"The bonded warehouses [which store imported material] I visited in southern and eastern China in mid-August were virtually empty," says a Singapore-based polyolefin trader. "But I agree that when you got down to the smaller local traders and distributors, at the second and third levels of the supply network, stocks were very high."

One overwhelming reason seems to be that the extraordinary increase in bank lending resulted in the emergence of occasional or completely new PE traders.

"Bank loans were so cheap and easy that many commodity traders and distributors used financing for speculation," the Asian producer adds.

As a senior Singapore-based investment banker puts it: "This didn't necessarily indicate a genuine recovery - just excess cash searching for a home."

We have a lot of data for PE, some for PP but far fewer for other polymers and chemicals. But it does seem logical that the impact of the credit glut will have been widespread.

The government extended $1 trillion (€685bn) of new loans in the first half of 2009 through the state-owned banking sector. This was triple the amount lent during the same period last year.

PE apparent demand averaged around 970,000 tonnes/month in 2008, says a second Asian polyolefins producer. In the first six months of this year, it reached 1.3m tonnes/month.

Overall trading activity in PP increased by more than 250%, the producer adds.

How On Earth Could This Happen?
How could apparent demand have risen in the first half when exports of finished goods suffered such steep declines?

The obvious explanation is a huge rise in domestic demand. We'll deal with this later.

First of all, here is the export picture: Overall total exports were down by 23% in July 2009 over the same month last year, according to China's National Bureau of Statistics.

Exports of PE film and sheet fell by 10.1% in the first of six months of 2009, while PP film and sheet overseas shipments declined by 37%.

Domestic demand was a lot better than anyone had expected. Government subsidies aimed at encouraging rural residents to buy electrical appliances, computers and vehicles helped. So did a nationwide government stimulus plan for autos. Sales of locally made cars rose year-on-year by 36.5% in June.

But the existence of subsidies doesn't guarantee they will be taken advantage of, especially at a time of increased anxiety over job losses.

The government has employed thousands of students to tour the country to promote the subsidies and to find out exactly how successful they have been.

Styrenics producers are concerned that inventories of finished goods could have been built up in anticipation of sales yet to happen.

Another factor behind the rebound in demand for virgin resin has been lack of availability of scrap or recycled imports.

Availability dipped during the first few months of this year because of reduced exports of finished goods to the West wrapped in plastic that were then shipped back to China.

A lot of traders in scrap plastic also went bust in China during last year's price collapse when virgin resin became cheaper than the recycled material. This has made the few who remain reluctant to resume trading.

The real estate sector has also boomed, which has been of great benefit to a wide range of polymer and chemical players.

But like so many other end-use sectors, has easy lending been the main driver in rising property prices and a pick-up in construction activity?

"Underlying domestic demand remains weak, despite policies aimed at boosting consumer spending," said the UK-based Royal Bank of Scotland (RBS) in its August World Economic Outlook Report.

As much as 30% of all the new loans issued in the first half were used to speculate on property and another 20% on equity markets, say several reports.

"It might be PE one day, real estate the next day and the stock market the day after that," adds the Singapore polyolefins trader. "In China, if lending is easy, you speculate in whatever you can get your hands on."

Dalian Exchange Impact
Before we move on to the outlook for the rest of this year, the influence of the Dalian Commodity Exchange needs to be mentioned. As liquidity rose in the first half, so did trading volumes.

Volume traded in the LLDPE futures contract totaled just over 32m tonnes in August - an increase of 309.34% over the same month last year.

"In China, if lending is easy, you speculate in whatever you can get your hands on."

Singapore polyolefins trader

But this was a big decline from April this year, the peak so far in 2009, when 77m tonnes was traded.

The contract has begun to serve as a reference point for domestic physical polyolefin markets in general.

There have even been some suggestions that local producers have set prices based on Dalian - a claim that state-operated energy and chemical giant Sinopec denied on its own behalf.

This is predominantly a paper game, as hardly any transactions conclude with physical delivery (hardly surprising when you look at the volumes involved - far in excess of even annual global demand for LLDPE).

It will be interesting to see whether the contract remains an important reference if there's a consistent drop in trading volumes.

Giving Credit Where It's Due
The prospects for the rest of this year largely hinge on whether the government will maintain high levels of economic stimulus and bank lending.

"An early withdrawal of fiscal and monetary stimuli could reveal a weaker than expected economy, and see growth fall below Beijing's target," adds RBS in the same report. "For now, the State Council is more likely to be concerned with the potential for social unrest than an over-accommodative monetary policy."

Fiscal tightening is unlikely to occur until the government becomes worried about inflation, says the bank.

The consumer price index actually fell by 1.8% year-on-year in July, according to China's Central Bank. But the index will start to rise again in Q4, adds RBS.

October 1 marks the 60th anniversary of the Cultural Revolution, a time when China will be anxious to show its best economic face, say some commentators.

But China Construction Bank, the country's second-biggest lender, has announced that it will cut its amount of new lending by 70% in the second half.

Loan growth in August was well below that of July, according to unconfirmed local media reports.

And the local and international media have been full of quotes from senior government officials of late, warning about asset price bubbles.

Officials have also told banks to be more prudent through only making loans to sound projects and not to speculators, say

"An early withdrawal of fiscal and monetary stimuli could reveal a weaker than expected economy"

RBS World Economic Outlook Report, August

the same reports.

These statements and measures were said to be behind the sharp fall in the Shanghai Composite Index (stock market) in the second half of August.

If liquidity dries up, polymer and other chemical inventories might be sold off in a hurry, creating sharp downward price spirals.

A lot of new capacity is due to be added in China and the Middle East in the second half, which could, as has been well documented, hit markets just as the Chinese economy slows down.

These two blows might be delivered at the same time as a third even bigger one - global energy prices in retreat as traders stampede for the exit.

More start-up delays likely
But if history has taught us anything, it is that more delays in petrochemical start-ups are likely, especially in the Middle East.

The scale and complexity of some of these new projects seem to have made smooth start-ups more difficult.

And it could be that there is no tightening of credit in China for many months to come.

Premature tightening in late 2007 - through an increase in bank deposit rates - contributed to China's last slowdown.

It seems unlikely that the government will want to repeat the mistake at the risk of the social unrest already highlighted by RBS.

Therefore, commodity polymer and chemicals markets might not suffer a sudden overall collapse anytime soon. We might instead see a long period of much-reduced demand as high inventories are unwound.

Shipments from the West began to decline from July as reports of weaker Chinese demand emerged. But even if this turns out be an overall war of gradual attrition, individual battles might continue to be lost.

Benzene is a recent example. China's inventories were said to be at 43,500 tonnes in July - considered by local producers to be extremely high.

"The rise in benzene was out of proportion to that of styrene, one of its main derivatives," said Paul Hodges, chairman of UK-based consultancy International eChem in August.

"Go short on benzene now, unless you think styrene is about to tighten," added John Keeley, CEO of International eChem, who used to run Shell's European aromatics business. Prices in Asia and Europe subsequently fell by more than $100/tonne. Somebody got their fingers very badly burnt, but nothing new in that, of course.

Nevertheless, getting it wrong seems easier than at any other time during the 12 years this correspondent has been reporting on the chemical industry. All you can do is to keep on trying to separate the hard facts from all the hype.

Read John Richardson's Asian Chemical Connections blog

By: John Richardson
+65 6780 4359

This week's world news from ICIS Ceimical Bussines

iks — Sun, 27 Sep 2009 20:44:32 GMT

HUNTSMAN SETTLES WITH BANKS FOR $1.73BN

US-based chemical firm Huntsman reached a $1.73bn (€1.25bn) cash and financing settlement with Deutsche Bank and Credit Suisse - the lenders in its doomed $10.6bn merger with Hexion Specialty Chemicals. Huntsman initially sought more than $4bn in damages against the lenders in a trial that began in a Texas state court. Huntsman will receive $620m in cash, $500m in senior secured term loan financing, $600m in unsecured note financing and $12m for the reimbursement of litigation costs. In its lawsuit against the lenders, Huntsman alleged that Hexion's offer was an inducement to dupe the company into rejecting an earlier acquisition offer by Netherlands-based petrochemical firm Basell.

WALL STREET PANS HUNTSMAN DEAL

Wall Street was underwhelmed by Huntsman's $1.73bn (€1.25bn) cash and financing settlement with Credit Suisse and Deutsche Bank. "In a rather disappointing turn of events, Huntsman settled its lawsuit meaningfully below the $3bn-plus recovery previously discussed," said BB&T Capital Markets analyst Frank Mitsch. "The cash settlement was less than expected, but the company also received favorable financing terms," said Jefferies & Co. analyst Laurence Alexander. Analysts had expected a cash settlement of around $1bn. Huntsman shares closed down 9 cents, to $5.92 on the settlement last Tuesday.

HUNTSMAN DOWNPLAYS WALL STREET REACTION

Huntsman chief financial officer Kimo Esplin downplayed muted Wall Street reaction to its settlement with banks Credit Suisse and Deutsche Bank. "I've spoken with about 20 of our top shareholders and they're all thrilled with the settlement. There may have been some short-term hedge fund players that were in the stock - not for the fundamentals but for [an expected] pop in the settlement," said Esplin. "They're naive to think that you're going to come out of Texas with a $4bn-5bn [€2.9bn-3.6bn] settlement," he added.

HUNTSMAN MULLS PAYING DOWN MORE DEBT

Huntsman will consider using its settlement money from Credit Suisse and Deutsche Bank to pay down debt in addition to the announced payoff of $295m (€212m) in 11.625% senior secured notes due 2010, said chief financial officer Kimo Esplin. This would include $200m in 11.5% debt due 2012. "We'll also significantly reduce or eliminate our undrawn $650m revolver [revolving credit facility]," he said. Huntsman will save considerable interest expense with the new loans from the banks on attractive terms, he added. The financing portion of the settlement consists of $500m in senior secured seven-year term loans, with an interest rate of LIBOR (London inter-bank offered rate) plus 2.25% and a $600m unsecured seven-year note at 5.5%.

SPE AIMS TO REVERSE MEMBERSHIP DROP

The Society of Plastics Engineers (SPE) is adopting a three-pronged program to reverse a membership decline; enrollment is down by 47% from an all-time peak of 30,000 in 1999, the US technical group said. To reverse the decline, the SPE has adopted a program that addresses technology, geography and younger members, said president Paul Anderson at the 2009 National Plastics Exhibition (NPE) in Chicago, Illinois, US. This will include a focus on bioplastics and nanomaterials, as well as using social media such as Facebook. More than 40,000 people registered to attend NPE.

SABIC TARGETS US FOR POLYOLEFIN EXPORTS...

Saudi Arabia's SABIC is taking its first steps towards exporting polyolefins to the US with plans to begin establishing warehouses in the country, said CEO Mohamed al-Mady. "The US will become a net importer of polymer material," said Al-Mady at NPE. "SABIC is capable of fulfilling those requirements." Part of SABIC's plan involves establishing warehouses in the US, since exporting directly from Saudi Arabia would create an unwieldy supply chain, said Khaled Al-Mana, vice president of SABIC Polymers.

...AND NEARS START UP OF RESINS PLANT

Saudi Arabia's SABIC's plastics subsidiary SABIC Innovative Plastics (IP) has nearly completed a resins plant in Spain and is ready to start expanding a resins compounding facility in China, said SABIC CEO Mohamed al-Mady at NPE. SABIC IP will open its Ultem resins plant in Cartagena, Spain, at the end of the year, while the 30% expansion of its compounding facility in Nansha, China, begins in July.

BANKRUPTCY LOOMS FOR US CUSTOM MOLDERS

Tightened credit and weak sales are likely to put 15% of the US custom molding industry, or 1,170 firms, into some form of bankruptcy, said Jeff Mengel, partner and head of the plastics team at US-based consultancy Plante & Moran, while at NPE. The US has 7,800 custom molders, with total sales of roughly $100bn (€71bn), he said. "It just has to happen," said Mengel. "There is no way we can have 7,800 companies operating at 30% capacity."

CHEMSPEC GOES PUBLIC

China-based specialty chemicals producer Chemspec International has priced its initial public offering of 8.1m American Depositary Shares (ADSs) at $9/share. The ADSs began trading on the New York Stock Exchange last Wednesday under the ticker symbol "CPC."

ACC SEES US CHEMICAL RECOVERY BY END OF Q3

The rate of the production decline in the US chemical industry has moderated in recent months, and the industry should resume growth toward the end of the third quarter, said the American Chemistry Council (ACC). "Along the supply chain, inventories-to-sales ratios for chemicals have improved over the past few months," said chief economist Kevin Swift. "It appears that the massive destocking of 2008 and into the first quarter of 2009 is dissipating."

DOW CORNING URGES US POLICIES TO BOOST SOLAR

US-headquartered silicon-based materials firm Dow Corning wants US federal lawmakers to set policies to boost the solar energy sector. "To make America a 21st century solar power, we need smart and effective government policies from Congress that will help the private sector grow, thrive and create thousands of new jobs," said Dow Corning CEO Stephanie Burns. Her firm is calling for a permanent advanced manufacturing tax credit, renewable electricity standards, federal interconnection and net metering standards, as well as renewable energy payments, known as "feed-in tariffs."

PERTAMINA PICKS DOW UNIPOL PP TECHNOLOGY

Indonesia's state energy and chemical company PT Pertamina has selected US-based Dow Chemical's UNIPOL Polypropylene (PP) Process technology for its new 250,000 tonne/year plant that is expected to be completed by 2011 at its Balongan complex in West Java, said Karen Shepard Jackson, global commercial director of Dow's Polypropylene Licensing & Catalyst group. "Pertamina chose the UNIPOL polypropylene process because it will enable it to build the most competitive and advantaged facility capable of producing a full range of products," she said.

MONSANTO Q3 PROFIT FALLS; WILL CUT 900 JOBS

US-based seeds and herbicides producer Monsanto's fiscal third-quarter net profit fell by 14% to $694m (€493m) as sales dropped by 11% to $3.16bn. The company also said that it will shed 900 jobs, or less than 4% of its regular global workforce, as part of a restructuring operation. The results reflected decreased revenues from Monsanto's Roundup and other glyphosate-based agricultural herbicides globally.

EVONIK TO EXPAND GLOBAL METHIONINE CAPACITY\

German specialty chemical major Evonik plans to further expand its global production capacity for feed additive methionine at sites in the US, Germany and Belgium. The expansion will be staged from 2011 through 2013, when Evonik's overall methionine capacity will reach 430,000 tonnes/year.

SHOWA SHELL, SAUDI ARAMCO PLAN SOLAR JV

Japan's Showa Shell Sekiyu and Saudi Aramco Oil have agreed to launch a feasibility study for a solar-power joint venture. "Amid sluggish demand for oil products such as gasoline, we, Showa Shell, aim to expand our business concerning new energy which uses solar cells," said a Showa official. Japan's fifth-largest refiner and Saudi Arabia's state-run oil company plan to spend several billion yen to set up small-scale microgrid-based solar power facilities by around 2011 in areas of Saudi Arabia that are not served by power grids, the official said.

ASHLAND TO SELL MARINE SERVICES BUSINESS

US specialty chemicals ¬producer Ashland has agreed to sell its global marine services business for $120m (€86m) to J.F. Lehman & Co. The business has revenues of about $140m/year and about 325 employees, with 28 offices and 98 stocking locations in 47 countries.

BASF SITE LEAKS 10 TONNES OF HPN INTO RHINE

BASF's main production site at Ludwigshafen, Germany, leaked 10 tonnes of hydroxypivalic acid neopentyl glycol ester (HPN) into the river Rhine. The chemical, which is used in the production of lacquers, leaked through the cold water system. HPN is irritating to the eyes but biodegradable, BASF said.

OLTCHIM TO TEMPORARILY CUT AROUND 1,000 JOBS

Romanian state-owned chemical company Oltchim will temporarily cut around 1,000 jobs for at least one month at its Ramnicu Valcea site to reduce costs. Oltchim, which employs around 3,700 people, has been operating at 40% of its normal production capacity due to feedstock supply problems.

LUKOIL BUYS DOW'S STAKE IN TOTAL REFINERY

Russia's Lukoil has bought US-based Dow Chemical's 45% stake in France-based Total's majority-owned refinery at Vlissingen, the Netherlands, for $725m (€522m). "A new downstream acquisition in western Europe organically fits in our company's strategy aimed at increasing oil refining capacities located in the immediate proximity to the markets where products with higher added value are sold," Lukoil president Vagit Alekperov said.

PKN ORLEN INTRODUCES VOLUNTARY REDUNDANCY

Polish oil, chemical and petrochemical group PKN Orlen has introduced a voluntary redundancy plan, part of an effort to trim its workforce by 19% over five years. The program offers zloty (Zl) 27,000 ($8,300, €6,000) in severance payments to those who volunteer for redundancy by the end of July, and Zl22,000 to those who apply in August.

TOTAL SACKS 900 STRIKERS AT UK REFINERY

The current employment contracts of up to 900 employees working on Total's hydrodesulfurization construction project at the Lindsey oil refinery in the UK were terminated on June 19. Contractors on the project have been on unofficial strike since June 11. The dispute has led to protests at the refinery and other industrial sites across the UK.

FLOODING EYED IN DEADLY ETHANOL DERAILMENT

A train carrying ethanol derailed near Rockford, Illinois, US, on June 19, killing one and injuring three, when 18 of the Canadian National Railway train's 114 cars jumped the tracks, causing a massive fire that burned through the night. Investigators said that they suspect heavy rains washed out the tracks.

CLARIANT TO CUT 500 MORE JOBS IN RESTRUCTURING

Clariant will cut a further 500 jobs in the second phase of its 2009 restructuring program. The company announced 1,350 cuts at the start of the year.

CF INDUSTRIES EXTENDS OFFER FOR TERRA

US fertilizer maker CF Industries extended the expiration date of its exchange offer for all of the outstanding shares of Terra Industries common stock to July 10. CF's previous offer was set to expire on 26 June.

GOODYEAR TO REDUCE PRODUCTION

Goodyear Tire and Rubber will change its operational strategy in North America on July 6, moving to a three-shift, five-day strategy instead of a continuous operating schedule. The company said weak demand was responsible for the change.

DOW AUTOMOTIVE OPENS NEW PLANT IN GERMANY

Dow Automotive, a unit of US major Dow Chemical, has opened a production plant for automotive adhesives in Schkopau, Saxon-Anhalt, Germany. The addition creates 180 jobs.

AKZO MAY CLOSE GERMAN SITE NEXT YEAR

AkzoNobel Polymer Chemicals may close its site in Emmerich near Essen in northwest Germany by the end of 2010, affecting 34 jobs. AkzoNobel produces peroxides and pastes at Emmerich.

SWISS CHEMS CALL FOR END TO STIMULUS

Switzerland's chemical and pharmaceutical producers do not want the country's government to launch a further stimulus program, the president of industry association SGCI said. Instead, the government needs to work on promoting investment in technologies and innovation for the future, Christoph Mader told members at the SGCI Chemie Pharma Schweiz general meeting.

INEOS IN "GROWTH" TALKS FOR GRANGEMOUTH

INEOS is talking to potential investors, including China's largest oil and gas company, PetroChina, in its refinery and petrochemical complex in Grangemouth, Scotland, according to a Grangemouth local government official, cited in the UK's Financial Times. INEOS would not confirm the talks but a spokesman said the company was in discussion with a number of potential partners about "growth opportunities".

PETROCHINA TO MAKE $1.2BN OFFER FOR SPC
PetroChina is due to make a mandatory Singapore dollar (S$)1.75bn ($1.21bn) general offer for the outstanding 54.49% shares of Singapore Petroleum Corp. (SPC). The state-owned oil and gas giant said in a statement released to the Shanghai Stock Exchange on Monday that it had completed the acquisition of a 45.51% stake in SPC and would buy the rest at S$6.25/share in two to three weeks.

FRANCE'S ORBEO TO ACQUIRE ONECARBON

French carbon emissions trading company Orbeo will acquire Netherlands-based OneCarbon International, for an undisclosed amount. Orbeo is a joint venture between French chemical company Rhodia and French investment bank Societe Generale.

PETROCHINA TO BUY TWO PIPELINES FROM CNPC

China's largest oil and gas producer, PetroChina, will buy two existing pipelines in western China from its parent firm, China National Petroleum Company, at yuan 9.7bn ($1.42bn). The pipelines - a crude oil pipeline and a refined oil pipeline - each 1,858km long, stretch west to east from Urumqi, northwestern province Xinjiang to Lanzhou, northwestern QGansu province.

CHINA FLOODING US WITH CHEAP TIRES - REGULATOR

The US International Trade Commission (ITC) said that the domestic market is being disrupted by a flood of tire imports from China, a finding that could affect demand for styrene butadiene rubber (SBR). The ITC said it will send its recommendations to US President Barack Obama's administration later in the month.

US NATURAL GAS RESOURCES AT RECORD HIGH

The US has enough natural gas to meet domestic consumption for the next century, the highest level of recoverable resources ever measured. The American Gas Association (AGA) cited new data from the Potential Gas Committee (PGC) indicating a total available supply of 2,074,000bn cubic feet (bcf) of natural gas. The US consumes about 22,000 bcf annually.

EVONIK CYRO TO REVAMP N AMERICA OPERATIONS
Evonik Cyro, a unit of Germany-based specialty chemical major Evonik Industries, plans to restructure it business in North America, resulting in about 56 job cuts. The producer of acrylic sheet and molding compounds cited declining demand from the automotive, construction and retail display industries. "Our business and industry are challenged by a dramatic fall in demand for our products in the automotive, construction and retail display industries," said president John Rolando.

DOW, GAZPROM PARTNER ON CO₂ REDUCTION
US major Dow Chemical and Russian energy producer Gazprom have signed a memorandum of understanding to develop projects to reduce greenhouse gas emissions worldwide. Gazprom will provide a route-to-market for emissions offsets and use its global counterparty base to bring Dow's technologies to market through projects that could cumulatively reduce CO₂ emissions by millions of tonnes, according to the two companies.

NYNAS OPENS NEW HOUSTON TERMINAL
Base oil producer Nynas Americas has opened the first phase of its new Texas bulk liquid storage terminal on the Houston Ship Channel. The terminal opened eight new storage tanks. When completed at the end of the year, the terminal will have 25 tanks with a storage capacity of 400,000 bbls for loading and unloading by truck, railcar and marine vessels.

RUSSIA LEVIES DUTY ON IMPORTED POLYETHERS
Russia has introduced an import duty on polyethers, effective until March 15 2010. From July 16, a duty of 10% - and no less than €0.35/kg ($0.49) - will be applied.

Risk and return after the crisis

iks — Sun, 30 Aug 2009 20:40:28 GMT

Luis Viceira, George E. Bates Professor of Business Administration at Harvard Business School, interviewed by Brendan Maton, financial journalist.

_____________________________________________________________________________

Is the real lesson from this crisis that liquidity was the big problem? Liquidity was not the only problem. But I think a lesson that investors have to derive from this crisis is that it is very important to be aware of what your liquidity situation or the liquidity situation of your portfolio is at any given point in time. I think some investors have learned the hard way that it is not the same thing to invest in an equity vehicle that is liquid versus an equity vehicle that is illiquid. And if you also have an illiquid portfolio and are going to have to sell it into an illiquid market, as has been the situation for many investors in the current crisis, then you yourself are going to find that you need to sell your assets at a time when you are not going to find buyers who are willing to maybe buy those assets at what you think should be the fair value of those assets. This leads to forced sales. And that leads to big losses for the investors who are forced to sell. So I think what prompted the crisis were obviously fundamental factors, and that one of the consequences is that those investors who had not properly thought through the liquidity exposures in their portfolios were among the investors who suffered the heaviest losses, or who were in the worst situation in this crisis. So yes, I think one of the big lessons from the crisis – and I think the investors are taking notes – especially for institutional investors, is how to think more carefully about whether you are long or short liquidity. And it seems like being short liquidity a little bit too much can have disastrous effects in a situation such as the one we lived through at the end of 2008 and the beginning of 2009. Yes. We have seen a lot of famous investors with fairly illiquid portfolios (real assets, but illiquid portfolios) lose a lot of money. Do you think that this type of investor, like the Yale Endowment Foundation, remain a good model or is the model in need of change? The model remains a model to think carefully about. I do not think they are going to change their model. I think essentially their model is sound, a model based on diversification across asset classes. It is a model where, as a long-term investor, you think carefully about whether you can assume some illiquidity. As I said before, liquidity is important. But you need to calibrate depending on your needs how much illiquidity you can assume. And certainly these investors have been liquidity providers in the past, and I think they are going to continue doing so, because they can afford to do so, given their long-term investment horizon. Now, what we are going to have to think more about is – what is the risk exposure that we have in these portfolios? One way in which investors are going to start thinking more carefully – maybe these are too limited or simplistic interpretations of what they do – is to think: I am going to invest a fixed proportion in certain asset classes that are going to be defined in a very rigid way, and I am going to invest 10% in this package, 5% in that package, and these will always be invested in that way. I think that is not exactly what they do in practice; that is the way it has been interpreted popularly. And that way of investing might be a little bit misleading. Because we have a lot of overlapping in the risk exposure of some of these asset classes, and when you do not think through the veil of the asset class, and go a little bit beyond that, you think more deeply about the risk exposure. That is what I think investors are going to start thinking about. And thinking about what fundamental risk is relevant to me as an investor, and then what kind of exposure do I want to have to those risks, or dealing

Weekly Europe (UK) Brent Blend Spot Price FOB (Dollars per Barrel) since 1989-2009 weekly report

iks — Sat, 09 May 2009 19:53:56 GMT

Notes: Adjustments include an adjustment for crude oil, previously referred to as "Unaccounted For Crude Oil". A negative stock change indicates a decrease in stocks and a positive number indicates an increase in stocks. Data may not add to total due to independent rounding. See Definitions, Sources, and Notes link above for more information on this table.

For more details see our file Download file, or read more here

Release Date: 4/30/2009
Next Release Date: Last Week of May 2009

Contractors tighten belts for Saudi refinery bids

iks — Thu, 16 Apr 2009 21:37:35 GMT

DUBAI (Reuters) - Contractors will have made aggressive cuts to cost estimates in bids due later this month to build a new refinery for Saudi Aramco and Total (TOTF.PA), sources at contracting companies said on Thursday.
Oil's slump to around $50 a barrel from a peak over $147 last year has forced cost cutting across the industry, and contractors that were turning down work a year ago now find themselves in a fierce competition for what is left, sources said.

"With the current economic situation, there are not many projects," one contractor planning to bid to build the refinery told Reuters. "Competition is much more severe. We need to sharpen our pencils."
Top oil exporter Aramco and French energy giant Total have said they want billions of dollars cut from the construction costs for the refinery to reflect the slump in the prices of raw materials since the global economic downturn took hold.

Reuters

HK regulator to appeal PCCW decision ByJustine Lau and Tom Mitchell in Hong Kong Published: April 6 2009 07:40

iks — Mon, 06 Apr 2009 17:46:14 GMT

A Hong Kong court on Monday cleared Richard Li’s protracted attempt to buy out PCCW, his telecommunications company, striking down calls from the market regulator to block the $2bn deal.PCCW, his telecommunications company, striking down calls from the market regulator to block the $2bn deal.
But the Securities and Futures Commission said it would appeal against the judge’s decision to allow the buy-out offer from Mr Li, PCCW chairman, and China Unicom, the second largest shareholder, because of allegations of improper share transfers. In a February meeting, minority shareholders voted in favour of a $4.50 offer. But SFC investigators moved in after the poll, seizing voting records.
In rejecting the SFC’s arguments, Justice Susan Kwan said Monday: “I am satisfied that the shareholders are treated equitably in the reduction, that the proposals for reduction were properly explained, and that the reduction is for a discernible purpose.”

The regulator had argued that some investors had distributed PCCW shares to colleagues, friends and family members in an attempt to garner additional votes for the transaction.

Justice Kwan said the splitting of shares was not banned in Hong Kong and there was no evidence that investors voted for anything other than their wish to take profits.
“It would be unfair and wrong for the SFC to ask the court to lay down, for the first time, a policy on what should or should not be followed with regard to share splitting in a scheme, and to apply the policy to the scheme on a retrospective basis. This would only lead to chaos,” she said.

The SFC asked Justice Kwan to delay the transaction as it sought to appeal but she refused. The buy-out proposal was “time sensitive and price sensitive” and should not be subject to more uncertainty, she said. The Court of Appeal later agreed to hold a hearing on April 16.

“We are concerned that important points of law regarding the splitting of shares, which are of significant public concern, have not been fully clarified,” Martin Wheatley, SFC chairman, said. “These are important points of principle for the Hong Kong market and the protection of minority shareholders.”

After the judgment was handed down, retail shareholders erupted in protest.

Monday’s judgment is a relief for Mr Li, the son of Hong Kong tycoon Li Ka-shing. He has tried to sell PCCW in part or in whole three times over the past three years.

Commodity Comparisons

iks — Thu, 19 Mar 2009 21:10:22 GMT

Get the latest prices and news with interactive charting options for key commodities.

(see more at www.ft.com>>)

Markets Data

iks — Thu, 19 Mar 2009 21:00:50 GMT

Markets Data provides the latest stock market research information, including the latest data and charts for equities, commodities, currencies, bonds and rates. Dig deeper into the news with comprehensive data, analysis and advanced tools. (see more at www.ft.com>>)

Short View: After-shock

iks — Thu, 19 Mar 2009 20:51:51 GMT

By John Authers, Investment editor

Published: March 19 2009 19:27 | Last updated: March 19 2009 19:27

The shock came on Wednesday, from the Federal Reserve. The response from almost all markets was immediate. The after-shocks on Thursday were much harder to predict.
Stocks and bonds appear to have had a one-off adjustment to the news that the Fed would try to push down long-term rates by buying Treasury bonds. Once these markets had had the chance to react to the news, they quietened down swiftly.
In currencies, however, the shocks continued on Thursday and developed their own momentum. Wednesday’s fall of 3.01 per cent for the dollar was the greatest, on a trade-weighted basis, since the signing of the Plaza accord in September 1985.
Thursday’s fall, by the end of the trading day in London, was also very severe: about 1.9 per cent, according to Bloomberg.
The dollar had rallied since last summer largely on the perverse effects of “deleveraging”, as investors paying down debts often sold assets outside the US and bought dollars. The dollar’s renewed fall suggests that traders are testing to see how far it can fall.
With the dollar suddenly cheaper, and US goods, therefore, more competitive, other central banks have a dilemma. In the eurozone, where the European Central Bank continues to face criticism that it is “behind the curve”, beleaguered exporters could do without this month’s 10 per cent rise for the euro against the dollar.
In Japan, where the Bank of Japan has already intervened in the bond market, the question is whether it must now intervene directly to weaken the yen.
The yen is some 35 per cent stronger than it was in July 2007, at the dawn of the credit crisis.
It has gained some 6.6 per cent against the dollar in recent days. With Japanese exports in free fall, speculation that the BoJ must intervene therefore seems logical.