26 June 2009 13:50 [Source: ICIS news]
MADRID (ICIS news)--BASF will be starting up its hydrodealkylation (HDA) unit at Ludwigshafen, Germany, in July, a company source said on Friday.
The unit has a capacity of 160,000 tonnes/year, according to the ICIS plants and projects database.
"This may help stop the benzene market from lengthening," the source said on the sidelines of the European Petrochemical Luncheon (EPL). "It may also impact overall market sentiment for a variety of other reasons."
The news followed market reports that another European producer was planning to switch on its HDA unit in order to produce benzene from toluene, as the majority of players felt that benzene prices would remain at high levels between $800-900/tonne.
HDA units, which produce benzene from toluene, are run when toluene prices are low and benzene prices high enough to make it commercially sensible.The start-up of these HDA capacities may spur an increase in demand for toluene in European market, which has been primarily driven by gasoline price trends since the beginning of 2009.
However, one toluene producer questioned how stable margins for HDA production would be if benzene prices started to come off.
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