Aromatics makers to switch to LPG – consultants

28 June 2007 06:52 [Source: ICIS news]

SINGAPORE (ICIS news)--A shortage of feedstock naphtha until 2010 is likely to force Asian aromatics producers to switch to alternatives like LPG, Kok Keng Koh, a consultant with Wood Mackenzie, said on Thursday.

A deficit of naphtha supply is seen for the Asia Pacific and China until 2010, as refiners within Asia divert volumes for blending due to growing gasoline demand, he said at the two-day 3^rd Aromatics & Derivatives Conference organised by ICIS and International eChem, which ends on Friday.

In this scenario, producers with integrated units would enjoy competitive advantage, said Paul Hodges, chairman, International eChem, at the same conference.

Feedstock naphtha prices globally were expected to be affected due to crude, refining imbalances and seasonality of US gasoline.

Upstream crude and naphtha markets were likely to have a greater impact on benzene, toluene and mixed xylenes (BTX) values than downstream factors, he added.

High crude prices and volatility in naphtha markets had a ripple effect in the BTX chain. The spread between benzene and naphtha values widened to $370/tonne in 2003-2007, from the $104/tonne difference seen in 1996-2002.

Greater volatility was also seen in the xylenes markets in the same period with the spread widening to $251/tonne from the $121/tonne spread seen from 1996-2002, he added.

The reason for this increased volatility was attributed to the US summer driving season.

But aromatics markets were likely to be supported by gasoline values although high crude prices have squeezed margins in the downstream, he said.

By: Mahua Chakravarty
+65 6780 4359

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