26 September 2004 19:24 [Source: ICIS news]
MONTE CARLO, Monaco (CNI)--US orthoxylene consumers are likely to be jockeying for position on the world market in the next few months, in advance of the anticipated closure of Lyondell’s 110 000 tonne/year OX plant in Houston, Texas, CNI learned here Sunday.
The competition for product was outlined by Richard Wehman, director of international purchasing for Stepan Company.
He said Lyondell's Houston plant was expected to shut permanently at the end of 2005. This has yet to be confirmed by Lyondell.
Wehman was talking on the sidelines of the European Petrochemical Association (EPCA) conference* where he is looking for global suppliers to cover a possible shortfall in 2006. Stepan is the largest OX buyer in the US, purchasing 110 000 tonne/year.
“The US market is perfectly in balance,” said Wehman. “The shutdown of the Lyondell plant will therefore leave a big hole to fill. Some consumers will be able to get the additional product they will need after the closure, but others will be left scrambling."
Current OX prices are poised to increase in both the US and Europe, despite lower prices for mixed xylenes in both regions.
Producers in Europe are asking for increases of Euro100/tonne for the fourth quarter contract price, according to Kevin Liu, manager of Atmosa Petrochemie, an OX consumer in Austria. Liu said the price will go up, but he sees an increase of Euro40-60/tonne as more reasonable. Liu does not see the Reliance outage at Jamnagar, India as significant for the European market. Liu pointed out that there are shutdowns at three European phthalic anhydride (PA) units in the fourth quarter, which he says will add length to the OX market in Europe.
In the US, Wehman said OX prices might not go down for October, along with xylenes, but producers will not get the increases of 2.5-3.5 cents per pound that they are seeking. Production problems associated with Hurricane Ivan mean that the US market is sold out in the short term, according to Wehman.
*The 38th annual EPCA conference runs through Tuesday (29th September).
CNI's EPCA newsroom: Suite Naiades C, Grand Hotel; Tel: + 377-9315-1070/71
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