UpdateEgypt unrest hits chemical producers, unsettles markets

01 February 2011 17:27  [Source: ICIS news]

(releads and updates throughout)

By Franco Capaldo

LONDON (ICIS)--Political unrest in Egypt, which has affected some chemicals operations in the region and helped push the price of oil over $100/bbl, intensified on Tuesday as demonstrators stepped up their protests against the current regime. 

Tens of thousands of people have held huge rallies in the centre of Cairo and other Egyptian cities in their efforts to force President Hosni Mubarak to step down from power. Organisers have been hoping to bring 1m people onto the streets of the capital.

The unrest has destabilised Middle East markets, with shares plunging in many countries in the region. The uprising also pushed up oil prices over $100/bbl on Monday for the first time in more than two years, while shares in Asian petrochemical companies mostly fell, in line with regional bourses.

Caustic soda prices were set to rise in North Africa as Egypt, predominantly an export market, stopped supplying the material as the demonstrations, the biggest seen so far, continued into their eighth day.

A number of chemical plants in Egypt have been forced to shut down and stop operations altogether.

Producer TCI Sanmar closed its 200,000 tonne/year caustic soda plant at Port Said on 29 January because riots in the local area had made it impossible to operate, while EPC’s 120,000 tonne/year caustic soda plant in Alexandria was also thought to have shut down.

Meanwhile, methanol producer Methanex temporarily closed its office in Cairo and decided to evacuate international staff and their families until further notice, prompted by safety and security concerns.

Methanex CEO Bruce Aitken said commissioning activities at the company’s new 1.3m tonne/year joint venture EMethanex methanol plant at Damietta had been curtailed and the site was currently staffed at "minimal levels".

There was also growing concern about disruption to the Suez Canal, a major shipping route for global petrochemical companies, particularly following an announcement on Monday from the Egyptian army - currently guarding the banks of the canal - that it would not use force against protestors.

However, according to shipping agents, the 192km-long canal has not yet been affected and has been operating as usual. Nevertheless, sources added that there could be delays in shipping activities in the port of Damietta with regards to cargo operations.

A fuel exporter said that offices at the port of Alexandria on Egypt’s Mediterranean coast were closed, although shipping operations continued normally. The exporter added that jetties were still functioning but ongoing civil unrest in the city of Alexandria had made the situation uncertain.

Violence between government forces and protestors has left at least 125 people dead since the beginning of rallies on 25 January.

In related news, King Abdullah of Jordan replaced his prime minister, Samir Rifai, with Marouf Bakhit, following protests inspired by Egypt’s mass demonstrations and earlier unrest in Tunisia.

Additional reporting by Stefan Baumgarten, Nurluqman Suratman, James Mills, Mark Victory, Mike Nash and Pearl Bantillo.

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By: Franco Capaldo
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