Tight benzene-toluene squeezes TDP/HDA margins

11 December 2007 09:02  [Source: ICIS news]

SINGAPORE (ICIS news)--A narrow $35-$40/tonne (€24-€27/tonne) spread between benzene and toluene could force toluene disproportionation (TDP) and hydro-dealkylation (HDA) producers to lower operating rates or shutdown units, said traders and producers on Tuesday.

 

Production margins at TDP/HDA plants have become squeezed in the past weeks, as the gap between benzene and toluene values narrowed, they said.

 

“TDP makers could shutdown plants in December, I think,” said a trader.

 

Korean aromatics major, GS Caltex has shutdown its TDP unit from early November due to poor economics, said a source close to the company.

 

No further confirmation was forthcoming.

 

But the estimated loss of production for isomer grade xylene was about 250 tonnes/day, said the source.

 

Among other Korean producers, SK Energy also could have shutdown or reduced operating rates at a TDP unit, said traders.

 

The company refused to comment regarding this.

 

Benzene values were notionally assessed at $945-$955/tonne FOB (free on board) Korea, which was only $35-$40/tonne higher than current toluene values, according to global chemical market intelligence service ICIS pricing.

 

A spread of about $150/tonne between benzene and toluene values is estimated as the break-even point for TDP/HDA producers.

By: Mahua Chakravarty
+65 6780 4359

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