11 July 2007 08:35 [Source: ICIS news]
By Mahua Mitra and Nurul Darni
SINGAPORE (ICIS news)--Several northeast Asian aromatics producers and cracker operators have maintained usage of low-cost butane as alternative feedstock in response to soaring naphtha costs, a trend that is set to persist if naphtha prices remain high, industry sources said on Wednesday. ?xml:namespace>
Asia’s open-spec naphtha prices have risen to more than $700/tonne CFR (cost and freight) ?xml:namespace>
“Cracker operators and BTX producers are always on a lookout for lower-cost alternative feedstocks, in the face of rising naphtha and in order to keep their plants running,” a naphtha trader from
South Korean aromatics producer LG Petrochemical and Japan-based Maruzen Petrochemical were among those which used some portions of butane feedstock, company sources said. The switch had resulted in a drop in production volume of benzene, toluene and mixed xylenes (BTX), they added.
Maruzen was losing about 2-3% per month of the volume produced at its
“We’ve raised our butane feedstock to slightly over 10% this year, from 5-7% last year. I think this trend will continue with other Japanese petrochemical companies as well this year, if naphtha prices continue to inch up,” a trading manager at Idemitsu said.
Supporting this view, the source with LG said that the company had switched from naphtha cracking to butane earlier this year and planned to use butane as its feedstock until September or October.
“If naphtha prices remain at late $600/tonne or $700/tonne, then we could continue using butane,” he said.
Increased use of heavy naphtha for gasoline production was likely to create a deficit until 2010 for cracker-based aromatics producers who could switch to alternatives like liquefied petroleum gas (LPG), said a Singapore-based consultant.
Earlier ICIS news reported that a deficit of heavy naphtha supply was seen for the Asia-Pacific region and China until 2010 as refiners within Asia could divert volumes for blending due to growing gasoline demand, according to Kok Keng Koh, a consultant with Wood Mackenzie, at a conference in June.
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