US gasoline change causes instability for aromatics

12 May 2006 18:59  [Source: ICIS news]

HOUSTON (ICIS news)--The combination of high hydrocarbon prices and the phase-out of methyl tertiary butyl ether (MTBE) has made it difficult for aromatics retailers to sell their products, a distributor said on Friday.

“The current situation is very confusing and difficult. The prices of some products change before they reach their customers,” the distributor said, adding it had temporarily discontinued the practice of notifying customers of price hikes. “The prices had risen before the ink was dry.”

As refiners move away from the use of MTBE as an octane booster, demand for additives such as toluene and other aromatic solvents has increased, leading to several price hikes and volatility in aromatics. Climbing hydrocarbon prices have exacerbated the volatility, the distributor said.

During an 8-week period between early March and the end of April, Gulf Coast spot barge prices for n-toluene rose 8.5 cents/pound, from an average of 32.69 cents/pound on 4 March to 41.19 cents/pound on 29 April, for an increase of 26%, according to information from global chemical market intelligence service ICIS pricing.

More price increases for aromatic solvents could be on the way. The US Energy Department has predicted the likelihood of higher crude oil and gasoline prices over the next few weeks if demand grows with the approach of summer.

Easy solutions are hard to come by, the Midwest distributor said. “It’s not a simple problem to solve. The volatility could continue until we have $50/barrel crude oil again.”

North American aromatic solvents producers include Citgo, ExxonMobil, Flint Hills Resources, Sun and Tauber.

North American aromatic solvents distributors include Ashland, Brennan, Conchemco, Hydrite, and Superior Solvents.

By: Gene Lockard
1 713 525 2653

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