Shipper sees doubling of Middle East petrochems

14 August 2008 18:31  [Source: ICIS news]

HOUSTON (ICIS news)--Petrochemical exports out of the Middle East will double in the next three years, the Norwegian-based shipping firm Eitzen Chemical said on Thursday.

In its quarterly earnings report, Eitzen said petrochemical shipments from the Middle East and also the Far East would offset "the slowdown in the growth in the world economy," though Eitzen provided no data on the slowdown or its effect on the company.

But Eitzen said growth in Middle Eastern exports could have a positive effect on its shipping business.

"The fact that four production areas in the world are emerging (US, EU, [Asia] and the Middle East) could lead to increased arbitrage of chemicals between the regions in the years to come, a factor that would be favorable to shipping," the company said.

"A strong demand for vegetable oils and biofuels is still forecasted and will also be positive for the chemical trade," the firm added.

However, Eitzen said signs of a further slowdown in world GDP growth "need to be monitored closely."

Eitzen's earnings have slowed considerably in the past year. The company on Thursday reported second-quarter net profit of $2.5m (€1.68m), compared with $16.2m (€10.8m) in the same quarter a year ago.

In the first quarter of this year, Eitzen reported a loss of $12.6m. Much of the Q1 loss came from options on leased vessels, the company said.

Eitzen's fleet of 83 vessels consists of various types and sizes of chemical tankers that operate out of Denmark, France, Spain, US and Singapore.

Eitzen ships carry cargoes of mixed xylene, methanol, sulfuric acid, caustic soda, clean and dirty petroleum products as well as vegetable oils, lube oils and even wine, according to the company.

($1 = €0.67)

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