US toluene supply expected to grow in 2010

24 March 2010 23:08  [Source: ICIS news]

HOUSTON (ICIS news)--Despite production cuts, US toluene availability will rise in 2010 on long gasoline supply and impending changes to US gasoline regulations, an industry consultant said on Wednesday.

Lingering winter gasoline supply in the US is forcing blenders to combine it with ethanol and reformate products to make a fuel more suitable for summer driving, said Edgar Acosta of consulting firm Dewitt at the 35th Annual World Petrochemical Conference in Houston, Texas.

The seasonal demand boost for aromatic gasoline feedstocks such as toluene, which traditionally accompanies the summer gasoline blending season, has been delayed until May, he said.

Acosta added that US gasoline blenders may eventually use more toluene as Mobile Source Air Toxics (MSAT II) regulations, which the US Environmental Protection Agency (EPA) plans to use to limit benzene levels in gasoline, take effect for large refiners in January 2011.

The MSAT II specifications could boost current ethanol levels in gasoline by 5%, triggering a need for more octane boosters such as toluene.

The degree to which gasoline makers will demand toluene is yet unclear, as unwanted benzene supply can also be hydrogenised into another good blending component, cyclohexane.

But softer benzene economics will surely mean weaker incentives for toluene-to-benzene conversion, already beleaguered by the influx of benzene from Asia that routinely follows each broadening of toluene/benzene price spreads.

These factors should result in longer US toluene supply in the immediate term, Acosta said.

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By: Landon Feller
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