Nippon Oil nominates July benzene ACP on par with June settlement

SINGAPORE (ICIS news)--Japanese benzene producer Nippon Oil has kept its Asia Contract Price (ACP) nomination similar to the company's June settlement price, a company source said on Thursday.

The company nominated its contract price at $845/tonne ( ┬684/tonneCFR (cost and freight) Asia, stable from the previous month's settlement, the source said.

Nippon Oil plans to settle the contract price with its customers on 30 June, the source added.

The benzene ACP is nominated and settled by Nippon Oil and its customers every month.

Some of the key benzene end-users within Japan are styrene monomer (SM) producer Asahi Kasei and phenol maker Mitsui Chemicals.

24 June 2010 13:40 [Source: ICIS news]

SHANGHAI (ICIS news)--Asian suppliers of Group II base oils are reluctant to cut their July prices for buyers in China amid strong demand in the US, producers and traders said on Thursday.

To spur sales amid cooling demand, traders in China said they sold their inventories below cost and requested base oil producers in Asia to reduce their July offer prices for the Chinese market.

Group II base oil prices were currently at $870-900/tonne (┬705-729/tonne) CFR (cost & freight) China for 150N and $980-1010/tonne (┬794-818/tonne) CFR China for 500N, as assessed by ICIS.

However, most deals in eastern China were recently done at about CNY8,200-8,400/tonne ($1,204-1,233/tonne) ex-tank for 150N and CNY9,200-9,500/tonne ($1,351-1,395/tonne) ex-tank for 500N, buyers and sellers said.

China ex-tank prices include a 6% import tax, a 17% value-added tax (VAT) and a consumption tax of around CNY1,300/tonne, indicating that domestic prices of Group II base oils were much lower than import costs.

Most market players said that Chinese domestic prices of Group II grades show no signs of recovering in July due to ample supply and continued weak demand, with the country's importers hoping that Asian refineries could reduce July offer prices by about $30-50/tonne.

As a result of tight supply in the US, Group II refineries in Asia could export their material there if Chinese buyers don't accept their July offers.

Suppliers in Taiwan and South Korea said there were more US buyers calling in to purchase any Group II grades. They added that they are not worried about sales in July and they plan to keep prices high.

ExxonMobil announced on 22 June that it will raise prices for all base oils by $50-60/tonne, with effect from 9 July, providing further support to Group II base oil prices in Asia

Some end-users said they were originally intending to build up their Group II stocks in July to prepare for tight supply in August and September, when Formosa's refinery in Taiwan shuts down, but high import costs were making them reconsider.

Major suppliers of Group II base oils to China include ExxonMobil, GS Caltex, S-Oil and Formosa.

($1 = ┬0.81/$1 = CNY6.81)

24 June 2010 12:20 [Source: ICIS news]

SINGAPORE (ICIS news)--China's imports of monoethylene glycol (MEG) is expected to fall further in June after sliding 17% month on month to 527,500 tonnes in May amid record high inventory and slow buying, traders said on Thursday.

China's port inventories have been at a record high of around 600,000 tonnes since April, after the country imported over 600,000 tonnes of the material in March and April, a trader said.

Buyers in China would be able to bring in more shipments from abroad only after they had secured storage tanks, he said.

⌠Almost all the tanks are full, he added.

Abundant supply and falling crude values had pushed down MEG prices to $710-720/tonne (┬575-583/tonne) CFR (cost and freight) China Main Port this week, a sharp decrease of $230-240/tonne, or 25%, since early April, according to ICIS data. (Please see graph below)

MEG cargoes from abroad - including those from Canada, US, Korea, and Singapore - slumped 31-44% in May, said a trader who deals with US cargoes.

China imported 42,700 tonnes less cargoes from US and Canada in May, according to a trader.

Production cutbacks in the region also had also partly reduced import volumes of MEG, said another trader.

Major producers in Korea and Singapore were reported to had either shut their plants for maintenance or reduced operating rates due to feedstock issues, he added.

23 June 2010 15:53 [Source: ICIS news]

TORONTO (ICIS news)--Germany could soon face much more industrial conflict after the country's highest labour court on Wednesday abandoned an important principle governing collective bargaining in Europe's largest economy, chemical union IG BCE and employers said.

The principle, known as 'Tarifeinheit', stipulates that there is only one collective bargaining deal per plant.

However, Germany's federal labour court in Erfurt said in a far-reaching ruling that henceforth it would no longer recognise this principle, opening the door for separate collective agreements for various groups of workers within one plant or facility.

The ruling came in a case involving competing collective agreements for doctors at a hospital, leaving it unclear which agreement should apply.

Chemical union IG BCE said having many separate collective deals for workers or professional and trade groups within one plant would create ⌠permanent conflict and jeopardise Germany's position as a competitive site for industrial production.

Union president Michael Vassiliadis demanded that lawmakers enshrine Tarifeinheit in law, joining a call by Wiesbaden-based chemical employers group BAVC and other employers groups and unions.

BAVC president Eggert Voscherau said the principle was the basis of the stable social partnership that union and employers built up over decades in Germany's chemical industry.

Under Tarifeinheit, Germany's larger unions such as IG BCE had the dominant role in collective bargaining with employers, to the disadvantage of smaller unions or professional groups.

Commentators said the court's decision would now strengthen smaller professional interest groups, such as doctors, air traffic controllers or train drivers, in their dealings with employers.

Without the principle of Tarifeinheit, Germany's collective bargaining would soon become ⌠balkanised, raising the spectre of endless strikes such as the UK experienced in the 1970s when some unions paralysed that country, they said.

The principle was at issue during the 2007-2008 strike action by German train drivers that hit chemicals shipments. The drivers were pressing their own collective agreement, separate from other rail workers.

24 June 2010 11:27 [Source: ICIS news]

LONDON (ICIS news)--Yule Catto & Co expects its pre-tax profit for the first half of 2010 to be substantially ahead of last year's, largely as a result of a strong performance by its main polymers business, the UK-based speciality chemicals producer said on Thursday.

The company's share price had spiked by nearly 8% to 195 pence at 07:36 GMT after the news was announced in a trading update ahead of the company's first-half results, which are expected on 27 August.

The polymers unit continued to enjoy "good volumes" throughout the second quarter and was expected to produce a first-half operating profit well ahead of the prior year, Yule Catto said.

The group's impact chemicals business, William Blythe, also saw improved volumes and, as expected, trading was strongly ahead of fiscal 2009, it added.

While the pharma chemicals division's operating profit in the first six months was below last year's level, the unit currently had a very strong order book and should see an improved product mix in the second half, the company said.

The group would use the ?11m ($16.4m; ┬13.4m) it received from the sale of its downstream adhesives business in June to help cut its net debt, which stood at ?88m at the beginning of the year, it added.

On 24 August 2009, Yule Catto reported a first-half net profit of ?19.9m

At 0915 GMT, the company's shares were trading at 185 pence, up 2% or 4 pence from the previous day's close of 181 pence.

($1 = ┬0.81, ┬1 = ?0.82)