16 August 2010 06:17 [Source: ICIS news]
By Mahua Chakravarty
Effective 1 January 2011, major US refiners would only be allowed to have a 0.62% annual average of benzene content in their system wide gasoline pool under the Mobile Source Air Toxics (MSAT) II regulations set by the US Environmental Protection Agency (EPA).
Smaller refiners were given a longer time to meet the MSAT requirement on 1 January 2015.
The new regulation represents almost a 50% cut in the current 1.3% benzene content of reformulated gasoline (RFG), or what is commonly known as E-10 – a motor fuel with 10% ethanol content, market sources said.
“I think this will have a bearish influence on the Asian market next year,” said a Korean producer and exporter to the
Asia is a key exporter of benzene to the
“There will be some impact [on Asian exports], but nobody knows the extent of this as it depends on the operating rate of the
Traders and producers in
US-based refineries would have an excess of about 300,000-500,000 tonnes/year of benzene, according to some market players.
Another cause for concern is additional supply next year from
S-Oil is currently building an aromatics plant in Onsan that would produce 280,000 tonnes/year of benzene and was expected to come on stream in the second quarter of 2011.
But some market players downplayed the potential impact of the new gasoline regulations since the excess benzene volumes in the US would be lower than initially expected and regional plants could easily tweak production rates.
“We had thought three years back that the excess benzene in the US would be about 700,000 tonnes/year, but now it seems that the surplus would be about half of this volume,” said a second Korean producer.
“The Asian market is forever in long supply [of benzene], so Asian producers are usually ready to cut back [on output],” he added.Joe Kamalick contributed to this story
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